Getting to Know Jim: His Past, Present, and Future Relationship with Money

Transcription – WCI – 419

INTRODUCTION

This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.

Tyler Scott:
Hello, everyone. Welcome to episode 419 of the White Coat Investor podcast – An interview with Dr. Jim Dahle.

My name is Tyler Scott. I am a friend of WCI and here today to try something a little different with the podcast. Most of you, like me, I think really look up to Jim, admire him, appreciate his worldview, perspective, and contributions, both to our financial literacy and to our broader medical and financial world at large.

I've been a fan of his for 15 years and looked up to him as a blogger and podcaster. Then I've had this opportunity the last three years as Megan, my wife, has become the podcast producer. I transitioned from dentistry to financial planning, where I've got to know Jim on a personal level.

It's been awesome for me to get to hear his stories and hear his motivations and reasonings and how he has come to form his opinions and these contributions he makes, where they started.

My hope with today's podcast was to get some of those stories and perspectives out and documented. Some of the things I've got to hear as we've been hiking or at the conference together and with the help of Carl Richards, a previous podcast guest, who put together a list of great questions to evoke deeper conversation about finance.

I'm going to see if we can learn something about Jim, get to know him better. It's my hope that we will get to see him for more than just the tactical backdoor Roth enthusiast and expert that he is.

Thanks for joining us today for something that's a little different. Let us know what you think. If it's not something you enjoy, please blame me. If it is something you like, let us know and we can try to do more of that in the future.

Today's episode is brought to us by SoFi, the folks who help you get your money right. Paying off student debt quickly and getting your finances back on track isn't easy. That's where SoFi can help. They have exclusive low rates designed to help medical residents refinance student loans. That could end up saving you thousands of dollars, helping you get out of student debt sooner.

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QUOTE OF THE DAY

Tyler Scott:
Today's quote of the day is from the great Morgan Housel. “No one is impressed with your possessions as much as you are.” I think you'll hear in the interview we do with Jim today, some indication about how experiences are the things that matter most and relationships. And it is rarely the things that we own or possess or buy that bring us the most joy. Certainly they rarely impress people. Great quote by Morgan Housel.

Thanks as always to all of you for what you've done today, whether you're in the hospital, at the dental clinic, you're at the middle school, in the engineering lab, all the myriad contributions you make to the society we live in. We see you. We appreciate you. We know the hard work it takes to do what you do, the sacrifices you've made to get there. And we're very grateful for what you're doing. And so, if no one has told you today already, thank you. Thank you for making our world a better place to live. Thank you for being here with us today.

We have a new survey partner here at the White Coat Investor. Their business is Enos. And you can find more about them at whitecoatinvestor.com/enos. And this is for those of you who are interested in making a little money on the side, doing surveys.

We've talked about that on the blog and podcast, how you can earn meaningful amounts of money in some cases, or it can just be a way to set up a solo 401(k) because you now have your own side business. And that can give you a place to roll over old 401(k)s so that you can control the fees and investments or a way for you to ditch old pre-tax IRAs that are getting in the way of your backdoor Roth. So it's great to have a good relationship with someone who provides paid surveys.

What's cool about Enos is that panel members are paid instantly via Venmo, PayPal, or you can choose a paper check. There's no delays. No redemption thresholds, no red tape. And unlike similar companies, Enos always pays for your time. Even if you're ineligible for a survey after completing screener questions, they'll still send you $5. So, go check out more about Enos at whitecoatinvestor.com/enos.

We have an event coming up on May 20th. This is for the FEW, the Financially Empowered Women. And you can join them with guest Alexis Gallati, founder and tax strategist at Cerebral Tax Advisors. This women-only event will be where Alexis shares her top strategies to reduce tax burden, whether you're W-2, an employee, a business owner, a side gigger. And so, come join us on May 20th at 06:00 P.M. Mountain Time. You can sign up at whitecoatinvestor.com/few.

Wonderful. Now that we've got all those things out of the way, we'll bring Jim in and I hope you enjoy this interview as we get to know maybe a deeper, different side of Dr. Dahle.

INTERVIEW WITH DR. DAHLE

Tyler Scott:
Awesome. Well, thanks, Jim, for joining me for a different kind of podcast episode today. I appreciate you doing this. And as someone who's looked up to you from afar for over 10 years as a new dentist and now someone who's got to know you a little more personally over the last three years, as we've moved to Salt Lake and Megan works here and I've started my financial planning journey, I'm making a big but optimistic assumption in doing this that other listeners who, like me, admire you, appreciate your perspectives, really appreciate your contributions that you make to us in medicine and the world at large, that others will find this conversation valuable as we learn a little more about you and your stories and how you formed your relationships with money and finances.

And so, in hopes of doing that, I've adapted some questions from Carl Richards, previous podcast guest, and they're meant to evoke a type of conversation about money that transcends the typical tactical questions that we often tackle here. And the hope is to take us to a deeper place of how you formed your hopes, fears, relationships with money at large.

And so, if it's a flop, I take full responsibility. I acknowledge here that this is not your idea. This is not Megan's idea. So if anyone has emails to send, direct them to me and please spare Megan and Jim those critiques. But I am optimistic that at least a few White Coat Investors will find this conversation meaningful.

Dr. Jim Dahle:
Yeah. One thing people ought to be aware of out there in podcast land is most guests that I bring on here get at least a little bit of a heads-up of what we're going to talk about on the episode, in the interview, some sample questions, that sort of thing. I'm operating without any of that. So this may go very deep. I don't really know where it's going to go. So I hope this is enjoyable for you as hopefully it will be for us.

JIM’S THOUGHTS AROUND MONEY DURING HIS UPBRINGING

Tyler Scott:
Yeah. Let's get started. Wonderful. I'm curious, what is an early memory of money that stands out to you early in your life?

Dr. Jim Dahle:
I never felt like I was from a very wealthy family when I was growing up. Now, my father was an engineer. My mom was a stay-at-home mom. We went to the nicest high school in town. It covered the hillside in Anchorage. Those of you who know Alaska, I went to service high school in Alaska. And at that point the wealthiest neighborhoods in town went to this high school. But I was at the very edge of the boundary. I was at the bottom of the hill is where we live.

And so, a lot of my peers definitely had more money than I did in high school. And I knew that what things cost mattered in my family. I can distinctly remember not asking to play competitive or travel hockey because it was expensive. And I did get to play on the cheapest team a couple of years in high school. And I remember really appreciating that.

But I do remember being jealous that my younger sisters were able to play comp soccer. Now, soccer was cheaper than hockey, for sure. But they got to play a number of years of comp soccer. And I'm like, “Well, maybe I should have asked for that.” And I didn't because I knew there wasn't money coming out of our ears as kids.

Now, we weren't going hungry or anything and there's a roof over our head. And what is interesting, a lot of people don't realize this, but I've never had my own room, at least not since the time I turned five, and my younger brother was born. My entire life, whether it was at home, whether it was at college, whether it was as a missionary, after obviously, after I got married, I've always had a roommate. I've never slept in a room by myself, really, for any lengthy period of time.

I look at my kids, they've all only had their own room, basically their entire life, other than the very youngest years. And it's just a very different life for my kids than me growing up. And I think there's some good with that. And I think there's some bad with that. And it's a little hard, maybe just sort out where to draw the balance sometimes.

Tyler Scott:
How old do you think you were, roughly, when you kind of discerned whether you were one of the rich kids or one of the poor kids? And how did you know it? What were you reading that you could tell you were in that demographic?

Dr. Jim Dahle:
Oh, I think it was probably high school before I ever thought anything about that. And it was what people drove, probably. It's probably what people drove. No, I can remember a younger time than that, when I found out there were kids going skiing in this ski period from school. I didn't take up skiing until I was 12 years old. And even then we went to the cheap places and I had crappy old gear and I remember it was expensive when it was $20 a day. Now it's $300 a day if you walk up to the window at Park City, but expensive was $20 a day. We went to the $10 a day place when I was growing up.

But I remember finding out there was an afterschool or even left school early a little bit to go skiing in this program. And I knew some kids went and did that. And I figured that wasn't something my family was going to do because we didn't have the money. So that, that was well before high school. That might've even been grade school.

It was pretty clear. We weren't poor by any means. My father was a bush pilot. We did have a plane most of the time I was growing up and the plane had to pay for itself with some extra jobs he did. But we weren't poor by any means. But I drove a Chevette in high school. Those of you who may not even know what a Chevette is. It's a hatchback five person car. Getting this thing to 65 miles an hour was no small feat. But I can remember my dad was driving this car once we were going out to the airport. It had just snowed. And so they plowed the lanes, but there was a little six inch berm of snow between the lanes.

My dad changed lanes and got a lap full of snow, when he changed lanes. The floor had completely rusted out in this car. There was a hole in the floor under the driver's feet. So when we got home, what did he do? Did we get a new car? No. Did we take it to a mechanic? No. He put a board down and we had a plywood floor in that car. And it subsequently became the car I drove when I first turned 16 was literally a Flintstone car. That was kind of my upbringing. If it gives you a sense of what money was like in my home.

Tyler Scott:
Simple solutions to simple problems. That's fantastic. What was your parents relationship like with money growing up for you? When you were young, what was your understanding of your parents' relationship with money? What messages do you remember hearing from them or your family about money?

Dr. Jim Dahle:
I don't know that I remember any messages. There was certainly no teaching about money happening. No one was teaching you about investing or anything. My parents weren't investing anything. My dad, by that point, was working for the state. He had a pension coming, but they didn't start saving for retirement until he retired from the state. He was 58 or 59 or something like that at that point. And then he did some similar work as a contractor and put some money away for retirement after that point. But there wasn't a saving happening. There wasn't investing happening.

I can remember at one point, one of his, one of his friends or work acquaintance or something and talked him into buying options.

Tyler Scott:
Oh no.

Dr. Jim Dahle:
And those of you from Alaska you know about the permanent fund dividend where every resident of Alaska gets some money from the government, essentially every year from the oil money is where it comes from originally, and then it was reinvested. And that might be $500. I think it topped out at something like $1,800 or something for every man, woman, and child in the state. And so, we get that. Sometimes it got put away for us and sometimes it was spent by my parents.

But I remember one year, my first investment was literally options.

Tyler Scott:
Oh no.

Dr. Jim Dahle:
I put $500 into some option. I didn't really understand how it worked. And my dad clearly didn't really understand how it worked. The options expired worthless and I lost my entire $500 investment. That was the investing education happening in my home. But I don't know that I remember my parents talking about money in front of us. I don't know that they really did, but we certainly knew that the price of things mattered.

Tyler Scott:
What was your first source of income? Did you have an allowance? Did you have chores where you could earn extra money? Did you go flip burgers? When did you start bringing in your own money?

Dr. Jim Dahle:
Well, keep in mind, Tyler, we're talking about 40 years ago. It's been a little while. I think we did have some allowances at some point. I think we might've done some chores and gotten a little bit of extra money. My first job, I think I was 15 or something. Certainly by the time I was 16, I was working in the summers. I think I worked at TCBY, schlepping yogurt. And then I had a summer job at the batting cages. It was interesting. They just leave a 16 year old out there. You ran the batting cage all day by yourself. There's nobody else around. And so, my swing got a lot better that summer. I remember that. But those are the sorts of summer jobs I had until I finished high school.

Tyler Scott:
Did you have a number in mind for how much annual income you would need to be rich when you're in middle school or high school?

Dr. Jim Dahle:
No idea whatsoever. I had no idea what my father made. These were not discussions we ever had. In fact, I would bet that I didn't really start thinking about that stuff at least until medical school and possibly afterward. When I talk about my financial awakening happening in residency, it really happened in residency and not a moment before.

Was I interested in money? Yes. Did I know you needed to spend less than you earned and those sorts of general principles, maybe debt is kind of bad and those sorts of things? Yes. I knew that. I was always kind of interested in learning more about it, but I don't know that I had any idea how to do that.

And it wasn't until I started actually making money as a resident, money that wasn't going to be spent in the next few months, going to school or whatever that I started actually paying attention to.

I started reading financial books and I read a lot of financial books relatively early in residency. And my process of becoming financially literate was relatively rapid. It was not spread out over many years.

I have a nephew right now who's reading books off my shelf. He's super interested in finance. He was over here the other day. I sent him home with six books and he's reading them. That was not me in high school. I had no interest in personal finance or investing or business. As an undergrad during medical school, I can remember a few of my classmates must've had some money or something because they were day trading during medical school.

I started med school in 1999. It was right before the big bubble burst. And so that first year I can remember people down there on the computers in the student lounge day trading. And obviously we all know how that kind of ended. But it wasn't me. I didn't have any extra money. At that point I was getting a little stipend from the military, but it was all being spent.

Tyler Scott:
Options is your first investment and day trading with your medical, not that you were doing it, but those are two…

Dr. Jim Dahle:
I probably would have tried it if I'd had any money to do it. I had no idea how to open a brokerage account.

Tyler Scott:
Well, that leads me to one of my questions, which was that any of these messages about money and these perceptions you had growing up, did that at all influence your choice to go into medicine?

Dr. Jim Dahle:
I think like most of us, we always knew we'd make good money in medicine. When I looked around and I knew parents of friends or people that we associated with the church or whatever, I knew that the doctors had a little more money than some of the other people. That part was obvious.

But when you're a kid, you think about just a handful of careers. You can be a teacher or a cop or a firefighter or a doctor. That's really it. Nobody sits there in high school and goes, I'm going to become an insurance agent. Nobody says that. Nobody says, “I'm going to be a supply chain manager.

When I thought about those things, I think I said, “Well, the doctors make the most and I'm reasonably smart. I think maybe that seems interesting. I like science.” And obviously when I got into college and became more educated about what I was getting into, that couldn't be the primary driver and it wasn't. You never really know though until you become financially independent. You never really know how much of it you're doing for the money. And I guess at this point, I'm working 0.4 FTEs. I guess 0.4 of it, I was doing not for the money and 0.6 I was doing for the money.

Tyler Scott:
40% pure, I want to take care of people. That's a good metric to gauge that perhaps.

Dr. Jim Dahle:
I don't know how else to gauge it. How much would you do if you weren't getting paid for it or if the money didn't matter? We all wrote in our application essays that I want to help people and I love science. They're all the same. I read them. I was on an admissions committee for a year as a fourth year medical student. And it really is true deep down inside. That really is what drives people into medicine. I think those who are happy in medicine feel at least part of it as a calling.

JIM’S FINANCIAL AWAKENING

Tyler Scott:
I think we've seen that with burnout is that the money, while good, of course, we have first world problems, many of us, but the money is not enough to keep us going. Here I am, I've left dentistry and found something I'm much more passionate about. And so, yeah, that's an interesting way to gauge it. Once you reach financial independence, how much do you keep doing? As a kid, what do you think your perspective was of someone who had a million bucks?

Dr. Jim Dahle:
Oh, that was money coming out of your ears. A million bucks was you're a millionaire. Are you kidding me? That's a lot of money. That's like the guy on Monopoly board. A millionaire always meant a lot of money. I certainly never had a million dollars. I was pretty sure my parents didn't have a million dollars. And I don't know that I ever thought I'd have a million dollars. So it was a huge amount in my mindset as a kid growing up and probably well in medical school.

Tyler Scott:
Yeah, that leads me, when did that change? When did you come to think reframe a million dollars? Was it during the reading those books?

Dr. Jim Dahle:
Yeah, it had to be at some point during residency when I reframe things. And of course, inflation had taken its toll over 20 or 30 years. A million dollars isn't what it was 30 years ago. But certainly the ability to have a realistic view of what $100,000 can do or what $1 million can do. That process didn't even start until I was nearly 30 years old.

Tyler Scott:
Yeah. With the benefit now of hindsight, 20, 30, 40 years of looking back, all this that we've talked about so far with your childhood, what do you make of that now? With the benefit of time and experience, what do you wish you would have known then? How do you think those messages around money benefited or hurt you over time?

Dr. Jim Dahle:
Well, I think the main way I look at it is I just try to take what I've learned over the last 20 or 25 years and incorporate that into my family and how I raise kids. My kids are far more financially literate than I was. Even at 10, 12 years old, they're far more financially literate than I was when I left home.

I think that's probably the main way I've made changes, trying to change your family tree as Dave Ramsey likes to say, and making it so money is not only okay to talk about, but expected to talk about and to put it in its proper position in your life.

Now, obviously, my kids are going to be dealing with a much different financial situation than I was dealing with leaving home. But I guess that's the main way. I certainly don't begrudge my parents for not teaching me that stuff. They did the best they could. And I think they're like most people out there. Most people are not particularly financially literate.

If you have the combination of financial literacy and financial discipline in our world, it's like having a superpower. You look around, you're like, “Oh, nobody else gets this. Nobody else has heated vision, can fly through the air. It's pretty cool when you really understand this stuff and see the power and what you can do with not only your life, but blessing the lives of others with it.

Tyler Scott:
What does that look like for you and Katie with the kids and the way you talk about money? Is it dollars and cents? Do you reveal what things cost? Is it investment education about looking at index funds and their Roth IRAs and seeing how much has grown? How have you applied that desire to move, change the family tree with more literacy for the kids?

Dr. Jim Dahle:
It's all of the above. And the tricky part is getting it right at the right ages. That's the hard part. Because obviously you want to just brain dump everything onto them when they're seven years old and that's obviously not the right approach. And so, you got to start slow for sure.

One of the approaches we take is as we drive around town, we point out businesses, particularly publicly traded businesses, like “Here's Home Depot. You own that. There's McDonald's. You own that. There's Wendy's. You own that. – What do you mean? How does that work? Dad? What do you mean I own it? – McDonald's makes money. The stockholders get some of it and you own that stock and your 529 being index fund.”

You can get into a lot of details. And sometimes it's just talking about interest. “You want to pay interest or do you want to be paid interest?” And you repeat those lessons long enough. They figure them out. They figure them out.

But it's interesting. Every kid's different. I have spendthrift kids and I have cheapskate kids. And it's very fascinating to see them develop despite growing up in the same kind of situation, having the same opportunities available to them. Some people are just wired differently.

WHAT DOES ‘ENOUGH’ LOOK LIKE AND HOW DO YOU KNOW?

Tyler Scott:
What does enough look like to you now? Do you have enough? And if you do, when did you know it?

Dr. Jim Dahle:
We're long past enough. Enough was at least six or seven years ago. Now, the first thing you do when you hit your enough number and as you become financially literate, you learn how to set that something like 25 times what you spend. The first thing you do is you start spending more money. When you're like, “Geez, I'm 45 years old, and I've already got enough. And I'm not really done working. Well, what else can I spend money on that would actually make me happier?”

I think that's pretty natural when you get financially independent relatively early in your life. You increase your spending. We started saying, “Well, it really is a lot more comfortable to be in first class on a flight, particularly overseas on some red eye flight than it is to be back in economy”, especially if you're relatively tall like I am, and don't sleep well on planes like I don't. Those sorts of issues come up and you start finding ways to spend more money.

Enough definitely grew a little bit in those first few years of financial independence. But even with that growth, we've still exceeded that. And so, then the big questions start, “What are you going to do with the rest? How much are you willing to leave to your kids? How much is too much to leave your kids? How should it be left to them? When should it be left to them?”

You start hitting those big questions. You start reading different books, and you become financially independent. I talked about this at WCICON last year. You stop reading books about how to get rich, you start trying to find books about how to be rich. And it's not as easy as it looks. It's clearly a first world problem, don't get me wrong. But it's not as easy as it looks to get all that stuff right. And figure out how much you leave in the charity, how much do you just want to give away to charity now? I was reading a book not long ago that talks about it not really being all that generous to leave money when you're dead, because it's not your money at that point.

Tyler Scott:
How hard is it to give away?

Dr. Jim Dahle:
You can spend it. So, how generous is that really? And really, the generous people are the ones giving away long before they die.

Tyler Scott:
How did you arrive at that sensation of enough? Was it a calculation? Was it where you leaned into the studies?

Dr. Jim Dahle:
I'm obviously totally into personal finance and investing. I know how to run the numbers. I know what enough is. This is what we spend 25 times that. Okay, that's enough. Give yourself a little factor for the fact that you're in your 40s or whatever. And it's good enough.

When we first drafted a financial plan in 2004-ish, we put a number in. I think the original number was $2.7 million. That was enough. And with inflation, that's $4 million or something now. And then, of course, we bumped it up a little bit. But it really is a math calculation. Enough is a number. Retirement is not an age, it's a number.

Tyler Scott:
Well, I certainly agree with that. And there is tremendous value in doing that calculation and feeling the benefit of getting there, though, for many people, it's hard to name it and own that they're there and adapt. It's cool to see that.

Dr. Jim Dahle:
Well, I think it's hard to change your habits. To get to being a multi-millionaire takes certain habits. Thrift, some financial literacy, some hard work. And I think this is very hard for retirees to start spending their money. It's very challenging. I understand now why it's so hard.

But I think the solution is to start spending before you get to retirement and start developing those habits of being able to spend money on things that you actually do value or that might make your life a little bit better or to give money away. I think doing that before you get to the stage where you've totally stopped earning is really helpful to making that transition better.

FINANCIAL LESSONS LEARNED LATER IN LIFE

Tyler Scott:
That's a great point. What's an important lesson you've had to learn about money and how does that shape your perspectives now? Maybe it was a mistake or a regret or just a lesson that you learned along the way that impacted you going forward?

Dr. Jim Dahle:
If you can see the end from the beginning and you know how wealthy you're going to be later, you'd probably live a little bit differently earlier. I got out of the military and we had one car that we took across the country to Virginia. Katie was driving that until it got wrecked while I was driving it. But I needed another car to commute with.

And so, within the first few months of becoming an attendant, I got another car. We bought it at auction. We thought that was a pretty smart way to buy it. It was a Mazda 626. It was a 1997. This would have been like 2006, bought a 1997 – 626. It turned out the AC didn't work. I didn't catch that in the 15 minutes I was looking at it before we bid on it.

Tyler Scott:
Buyer beware part at the auction.

Dr. Jim Dahle:
The buyer beware part, for sure. It cost $1,850 though. And I commuted in it and it was just fine. I'm an emergency doc. Only some of my commuting was at 02:00 o'clock in the afternoon. So most of the time it was fine.

But we sold it four years later, and all the money I put into it, I put some used tires on it. I bought some new windshield wipers and I had to replace the battery one morning. That was it. We sold it four years later before leaving Virginia and I could have gotten what I paid for out of it. Katie forbid me from selling it for that price because we were selling it to a friend. So, I got $1,500 out of it. Basically it cost me $350 plus used tires and a battery and windshield wipers to drive this car for four years.

Now, did I need to drive a $2,000 car for four years as an attending physician in retrospect? No. That was not why I became financially successful. That mindset probably helped, but was that necessary? No. Could I put some AC in it? Yes, I could have put AC in the car. So you start thinking about some of those things you cheaped out on and going, “Maybe that wasn't the right decision.”

The author Bill Perkins of “Die With Zero” talks a lot about this. If you're 80 years old and you had a time machine, would you go back in time and give $10,000 or $100,000 to 45-year-old you or 35 or 25-year-old you if you were a deca-millionaire? And the answer, of course, is yes. Well, that's your opportunity to spend some of your money now is to realize that it's basically a loan from future you. And it's okay to do that. You're not going to live forever. And I think a lot of us that really get into this personal finance stuff, we don't always remember that fact. And I think it's an important lesson.

Tyler Scott:
How, if at all, did your accident in the Tetons last year impact any of this? Has that changed your worldview on spending more, on sitting in first class, on advancing those charitable givings? We're coming up on a year here. What reflections from the Tetons do you feel are true for you in this relationship?

Dr. Jim Dahle:
Well, I think the most important thing is you got to realize that you in your 50s is not the same as you in your 30s. The biggest change I feel is a physical change. I feel like I moved from youth to middle age in the last year. And part of that was I got really out of shape sitting around recovering from my injuries and took a long time to get back into shape.

I'm actually very proud. I did 13 pull-ups yesterday without having to let go of the bar. And it's good now that I can hold onto the bar long enough that it's my other muscles getting fatigued that stops me from doing them. Because before I'd do two pull-ups and I'd fall off the bar because I couldn't hold onto the bar long enough.

I'm getting back into shape, but that's the biggest change is that I've moved into middle age. And so, it's a reminder of your mortality. And it's true that what even I can do in my 50s, I'm probably not going to be able to do in my 70s. So, it's given me a lot of thought about, “Well, how do I want to spend my 50s? What do I want to accomplish in my 50s? What adventures do I want to have? And what trips do I want to go on?” Those sorts of things.

I think I'm a little more free with spending now than I was a year ago. Now that's been a trend probably since 2015. Every year, I'm a little more free to spend more money. I have more money to spend and I'm getting better at spending. Obviously I told you the story about the $1,850 car. I was not always very good at spending. I'm much better at spending now, but that's what I have to work on. I'm pretty good at giving, pretty good at earning, pretty good at investing and saving, but spending is definitely my weak point of the money activities.

Tyler Scott:
Like your left wrist, we want that fifth muscle, the spending muscle to get stronger here.

Dr. Jim Dahle:
That's right.

IS HOW MUCH YOU MAKE AN INDICATION OF YOUR WORTH?

Tyler Scott:
I'm going to make a statement and I just want you to reply to it. How much I earn as an individual is an indication of my value.

Dr. Jim Dahle:
There is some truth to that. Obviously, we're all equal in a lot of ways. The world does not necessarily view you all equally. It is not going to reimburse you, to use the word used so often in medicine. It's not going to reimburse you equally. It reimburses some things, some skills, some abilities, some uses of your time better than others. And I think the sooner you realize that, the more you can adapt your life to the fact that that's the way the world works.

I think in high school, there's these guidance counselors. And they tell you to go wherever you want and study what you love and do what you like. And some of that's good advice, but the truth is if you go and borrow $200,000 for student loans and you come out with an art history degree, that's not going to pay off very well.

And so, I think it's important to recognize that there is some truth to the world, the economy, valuing certain things differently. If you are a particularly good three-point shooter, the world puts a lot of value on that, much more than if you're a particularly good kindergarten teacher. And it's important to recognize that and adapt your life accordingly to a certain point.

But at the end of the day, it's not all about money. None of it's going with you. Your hearse will not have a trailer hitch. And you can't do it all for the money. At the end of the day, money should be a tool, not a master. And hopefully you get to the point in your life where money is in its proper place. Nobody on their deathbed says, “I wish I had more money.” Nobody says that.

Tyler Scott:
It's not in Jordan Gromit's hospice list. That's not where people are thinking. Let's just imagine there's an archeology dig a hundred years from now, and they find your last 10 years of credit card receipts. What might these archeologists surmise about Jim Dahle?

Dr. Jim Dahle:
I think you're getting to the point where what you spend money on is what you value. And there's some truth to that. A lot of our spending goes toward travel. So apparently we value travel a lot. Now, it's interesting because Katie travels or loves to travel way more than I do. If she could go on five or six international trips a year, she'd be all for it. I get past about two and I'm like, “Eh, I'd rather stay home a little bit.” But we definitely spend quite a bit of money on travel.

These days we're busier. I've got two jobs. Neither one of them is really full time, but I've got two jobs. Katie's got two jobs. We spend a lot more money, I think, like dual dock couples do. We're paying somebody to come in and clean the house. We're eating out a lot more. We're spending money on things that are ways for us to buy time a lot more than maybe we used to. I think those are some of the things they'd notice.

Tyler Scott:
Credit card statements certainly don't tell the whole story about someone. What if there was a financial planner in this archeology dig and they dug up your written investment plan, the most updated version? What do you hope or assume they would surmise about you from your broader written financial plan?

Dr. Jim Dahle:
I think they'd probably just say this was a person who was living their financial life very intentionally. I think that's probably the main thing they'd surmise. Okay, this person had a plan, this person had goals, this person reached them. You say the most updated version of the plan. This plan has not had very many updates. It's basically the same plan we wrote up as when I was in residency in 2004. There's been a couple of tiny tweaks on the asset allocation. And obviously we've done a lot more estate planning more recently, but it's basically the same plan.

People asked the other day, I saw on a forum online and they talked about, “Well, when you have enough money or more than enough money, do you dial back the risk in your investments because you don't need to take that risk or do you actually dial it up because now you can take that risk and maybe have some great legacy for kids or charities or whatever.”

I could never decide between those two things. So we just kept the same asset allocation after financial independence and we're still plugging along. I just can't decide. I thought it was an interesting question to ask, but I don't know what the right answer is.

WHAT DO YOU WANT YOUR KIDS RELATIONSHIP WITH MONEY TO BE?

Tyler Scott:
It's a great answer. If I'm still doing this job as a financial planner 20 years from now, and if one of your kids comes to me as a client, what would you hope that they say when I ask them about their relationship with money?

Dr. Jim Dahle:
I think I would just hope that they would have a healthy relationship with money. Know how to save, know how to invest, know how to talk about money and put money in its appropriate place and have it be a tool in their lives, but also not have it be the driving force of their lives.

If nothing else, the fact that we can give them a dramatically better start than either of us have, you would hope that that would allow them to focus less on money than we have during our lives and be able to really use it to boost their lives.

For example, Whitney just came back from a trip to China. She went to China and a couple other countries with a professor as part of a little bit of a study abroad thing. And then she's later this summer, she's going on a big, long trip. I don't know, she's visiting 12 or 15 countries on this study abroad international business thing. She's going to get a minor or a certificate or something all in one semester, basically.

But she's thrilled to do it. She loves to travel. She's like her mother that way. And to be able to afford to pay for something like that is a pretty good feeling. When you view part of your life as being the provider for this family and realizing I'm providing a pretty cool thing. That's a nice pat on the back for yourself when you see those sorts of moments. And especially when they appreciate it or recognize where that comes from.

Tyler Scott:
It's very cool. Just one last question before we go to our bonus lightning round at the end, which will have a different tone to it. What else is on your mind? In the spirit of this conversation, is there anything you wish you'd got to say or anything we missed?

Dr. Jim Dahle:
This could go so many directions. Who knows where it's going to go? But I think back, I'm working a lot with my son right now. He's in a bunch of tryouts for competitive hockey teams. What he's been doing this last month, he wants to play on some travel teams.

I think back to a lot of the lessons I've learned about life in high school. I wanted to play on the high school varsity hockey team. That was a big deal to me. And I realized when I got to high school and I was the worst player trying out in ninth grade, that I had a ways to go. Despite the fact that I started playing when I was six, I was the worst player at those tryouts as a freshman.

And so, I started working. It's 10 below, I'm at an outdoor rink skating around. And I can still remember when I found out that we'd started bombing Iraq in the Gulf War. I was at that rink. Someone come to pick me up and I was out there skating around at minus 10, trying to become a better hockey player.

But I emphasized to him a lot that the lessons I learned doing stuff like that, to be able to self-motivate myself to work toward a goal, is the same thing that made me successful in my career. It makes us successful in business. It's made us successful with money. And some of those lessons are even more important, I think, than learning about how an index fund works.

Tyler Scott:
And as a fourth liner in your senior year of high school, do you want to share with us a brief?

Dr. Jim Dahle:
My moment of glory. Yeah, we were sitting around at WCICON, I told Tyler this story. But I did eventually make the varsity high school team as a senior. It wasn't until I was a senior, and I don't know if they just felt bad that I'd been in the program for four years and put me on the varsity team, but I was on the fourth line. In hockey, basically the first three lines play. You've seen them. They change people on the ice every 45 seconds or 60 seconds. Well, there's usually three lines that go out there. And the fourth line is basically backup players.

I was a benchwarmer, is what I was at the beginning of my senior year. My two line mates were freshmen. They were in there to develop them for future years, really. And I played most of the year that way. I went in the game when we were up by 10. It was when I'd go into the game. And thankfully we had a pretty good team.

And so, that happened not infrequently, but by the time we get to the end of the season, we go to the regional tournament, I hadn't played that much. I hadn't scored that many goals. And one of my friends got hurt. He was a senior. He was on the third line. He later, like many of the players on that team, played on a college division one team. He went and played at Army, I believe. And he got hurt. So I was put up into his slot and I was on the third line.

Well, now I was playing. I'm in the regular rotation. I'm going out there all the time. And the other guys on my line were seniors. None of us were particularly talented, but we were bigger than the other lines because we were seniors. So we were kind of the checking line. We work our way through regionals well enough to go to the state championship. And we win the first game in the state championship. We get to the semifinals. Wasn't a big state. It's Alaska. There's not that many high schools.

We're in the semifinals after winning one game. And it goes to overtime. It's five to five. It goes to overtime. And our coach decides he's not going to shorten the bench. He's not just going to play the first two lines. He's going to keep rolling all three lines as he has been through the tournament. And we go out there finally, the first two lines play, and then we go out and play. And it's a big scuffle in front of the net. There's like eight people are on the ice in front of me. And somehow the puck ends up on my stick. And I put it in the upper corner, score the game-winning goal in the state semifinal game. And I'm on TV. I'm on the local TV. I'm in the paper. They describe me as an unknown low-scoring senior.

Tyler Scott:
The backhanded compliment of the year. Amazing.

Dr. Jim Dahle:
The next night we won the state championship. I did not score any goals in the state championship game, but that was my moment of fame in high school hockey. It was interesting though. I went away to play in college. I didn't play division one. I played club. And in Utah hockey's not what it is in Alaska or Minnesota or Michigan or anything. I was the leading scorer at least one year on that team. I went from being the worst player on the team to the best player on the team. And it's interesting how unique it can be in different parts of the country.

Tyler Scott:
Awesome. Great story. Hockey's coming around here in Utah. As we record this on May 8th, yesterday, May 7th, the Utah Hockey Club is no more. We are now the Utah Mammoth.

Dr. Jim Dahle:
Yeah, it's pretty exciting.

Tyler Scott:
Yeah, we're going to get there.

Dr. Jim Dahle:
The fun part about it is youth hockey is going nuts around here. Now there's twice as many people playing youth hockey now as there was a year ago. So it's definitely having an effect.

Tyler Scott:
And at least one 41-year-old financial planner trying to get started after his hero inspired him at the conference to try.

Dr. Jim Dahle:
I'm trying to get Tyler into hockey. I took him down to the hockey store, got him some skates and some gear, and we're going to see him on the ice here shortly, I think.

Tyler Scott:
I played two-on-two yesterday for the first time. It was a disaster. And I loved it. It was fun.

LIGHTNING ROUND OF QUESTIONS TO GET TO KNOW JIM

Tyler Scott:
Okay, bonus lightning round here at the end. Different tone, different tenor. We stole from Carl Richards earlier. Now we're going to steal from Stephen Colbert and the Colbert questionnaire. So, Dr. Jim Dahle, a piercing, critical, deep question everyone wants to know about you. What is the best sandwich?

Dr. Jim Dahle:
The best sandwich. Let's go with the Philly cheesesteak.

Tyler Scott:
Oh, strong option. What is your favorite smell?

Dr. Jim Dahle:
My favorite smell. Well, it's not in an emergency department, I can tell you that. What is my favorite smell? I think there is a smell, I don't even know what it comes from. I think it's a weed that grows in Little Cottonwood Canyon that you notice when you're climbing, you can smell. Typically in the springtime. I don't know what it belongs to, but it reminds me of climbing when I smell. I wish I could tell you what the plant was, what the flower was. I cannot. I am not that wise when it comes to plants, but it's one of my favorite smells for sure.

Tyler Scott:
That's beautiful. Let's find out. That's awesome. Okay, back to the ER. Least favorite smell?

Dr. Jim Dahle:
Homeless feet, for sure. It's way worse than butt pus. It's way worse than anything else. Homeless feet. If you have not changed your socks in 10 days, and they've been inside boots for those 10 days, it's amazing how badly that smells. It's way worse than pus, or vomit, or diarrhea, or code brown down the hall. Homeless feet is by far the worst smell in the emergency department.

Tyler Scott:
I am going to take your word for it.

Dr. Jim Dahle:
To the point where I once rotated in a department that had a washer and a dryer in the department, and while they had the patient in a gown, they'd take all their clothes and put them in the washer and dryer, and by the time they were discharged, they had clean clothes. It was one of the best services that ER offered, not only to the patient, but to the staff.

Tyler Scott:
When I worked at the public health clinic in Oregon all those years, and we would go out on a mobile dental unit to take out teeth for the homeless and the migrant workers.

Dr. Jim Dahle:
You should be so happy their teeth are not on their feet.

Tyler Scott:
Yeah, yeah. It'd be interesting to get you in the mouth with me on one of those real abscess we could compare. But we would give them a pair of socks when they'd leave, and sometimes they'd cry. It was one of the most impactful things we did at the dental visit was give them socks. Have you ever asked anyone for their autograph, and did you get it?

Dr. Jim Dahle:
Wow. I can't remember ever asking anybody for an autograph. It's entirely possible I have. I've certainly had some books signed and things like that, but I don't really remember a particular instance.

Tyler Scott:
What was your first concert?

Dr. Jim Dahle:
That's a good question. I don't know what my first concert was. I'm not a big concert guy. I can tell you what the best concert I've been to was.

Tyler Scott:
We'll take that.

Dr. Jim Dahle:
It's put on by a particularly talented showman. And whether you like the music or not, if you watch his concert, you recognize that there's a lot of talent. And that's Garth Brooks. I wouldn't say I saw him in a stadium here in Salt Lake, and he's got 20 people out on the stage for most of the show. And for his first encore, he brought his wife, Tricia Yearwood, out and did some of her songs.

And then for a second encore, he just came out with his guitar and took requests from the audience. His songs, other people's songs, didn't matter. He'd sing and play the first verse and whatever the audience came up with. And it was impressive. And that was when I realized, “Okay, this is somebody with a lot of talent” when you can just do that in front of 25,000 people. I was pretty impressed. So if you get a chance to see him, I think it's pretty good.

I've also heard Metallica puts on a pretty good concert. Blows up their stereos and lights the roadies on fire. I'd like to see one of those one of these days.

Tyler Scott:
Well, that's how I feel about you at the conference. When you take live questions from the audience and after, I was like, “Man, for him to stand up there and just take whatever and speak off the cuff, you're doing it right now.” It's very cool. Okay, a couple more. What's the scariest animal?

Dr. Jim Dahle:
Scariest animal? It's almost surely in Australia. I gave a talk in residency about the 10 most poisonous animals in the world. I think eight of them were from Australia. So whatever it is, I'm sure it's down there.

Tyler Scott:
Beautiful and terrifying place. If you had to listen to one song for the rest of your life, what would it be? It's not that this song plays continuously, but when you go to listen to music, this is the song that's on.

Dr. Jim Dahle:
That's a good question. I don't even know that I can tell you the name of the artist right now, but there's a country song called Remember When. And I've been listening to quite a bit lately. And I'm embarrassed, I can't remember the artist's name right now. I'm going to blame that on the head injury. Alan Jackson, it's Alan Jackson. And I don't know that I listened to a lot of Alan Jackson's music, but I like that piece particularly.

Tyler Scott:
Awesome. Last one. Describe the rest of your life in five words.

Dr. Jim Dahle:
Dedicated to the service of others. Is that five or six?

Tyler Scott:
We'll take it, whatever it was. Thank you, Jim. Thanks for doing this. It's an honor to know you. We're grateful for what you do here. You're changing lives. You've certainly changed mine. And the sincerity with which you and Katie operate this business and your intentions with doing it are admirable and credible and profound. And to have this chance to get to know you a little more has been really meaningful to me. Hope it's meaningful to our listeners. Thank you.

Dr. Jim Dahle:
Well, thank you for your kind words and also for doing the work for a full episode here. There's no better gift than some work I don't have to do. So thank you very much.

Tyler Scott:
You bet. Thanks, Jim.

Wonderful. Well, I enjoyed that. I hope that was interesting or meaningful to you in some way. Thanks for taking a chance on us with something different on the podcast today.

SPONSOR

Tyler Scott:
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DISCLAIMER

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.

INTRODUCTION

This is the White Coat Investor podcast Milestones to Millionaire – Celebrating stories of success along the journey to financial freedom.

Dr. Jim Dahle:
This is Milestones to Millionaire podcast number 222 – Engineer and medical student hit half a million dollar net worth.

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I've often said that the entry drug to the White Coat Investor world is my first book, White Coat Investor, Physician's Guide to Personal Finance and Investing. You can order that book or other books, our student book, even our asset protection book, or the bootcamp book. You can order them both.

Many physicians give these as gifts to their trainees or to colleagues. And if you order 25 plus of these, we'll give you a discount. If you order 100 plus them, we'll give you an even bigger discount. You can email your order to [email protected].

We get a lot of great reviews on this book. Here's a couple of them. It says “He takes the complicated and nuanced topic of asset protection, gives you a plain English analysis of the topic. This is the book you need to help you sleep at night if you're a high net worth individual or on your way. Straightforward and simple advice with no agenda whatsoever. If your situation is complex, no problem. You have all the breadcrumbs you need to meet with an asset planning attorney and ask the right questions. But for the 99.9% of folks with a net worth below 5 million, this is all you need.”

Great review. That one's for the asset protection book. We have lots and lots of reviews on Amazon for all of these books. And they're good. They help people. I wrote the book that I wish I could read.

If these books had existed, I wouldn't have bothered writing them. But they didn't exist. So I wrote them. And I hope they're as helpful to you as the process of writing them was helpful to me. They helped lots of other White Coat Investors. If you'd like to pass them forward to others, bulk orders, email [email protected]. If you just want to buy a copy of the books, you can do that as well. You can find the links at whitecoatinvestor.com to do that.

You can buy them from our store. The address for that is shop.whitecoatinvestor.com. Or you can just go to Amazon. They're all available on Amazon as well. We might give you a little better price at our shop. But since Amazon's price is always changing, sometimes that might be a better deal too. So it doesn't hurt to look in both places.

INTERVIEW

All right. We have a great interview today. It's kind of a unique interview. But stick around afterward. We're going to talk a little bit about some of the different methods of paying for school along with the pluses and minuses.

Our guest today on the Milestones to Millionaire podcast is Lauren. Lauren, welcome to the podcast.
Lauren:
Hi, thank you.

Tell us what you do for a living and what part of the country you're in and how far you are out of school.

Lauren:
I'm an engineer and my husband is a medical student. He's in his third year at Uniformed Services University. He's active duty military. I'm about six years out of school from undergrad and so is he. But he's currently still, I guess, in his school for med school. And we are in Metro Washington, D.C. We're in Maryland.

Dr. Jim Dahle:
Yeah. Relatively high cost of living area.

Lauren:
Yes, yes.

Dr. Jim Dahle:
Yeah. Okay. Well, you've accomplished a net worth milestone that you should be very proud of. Tell us what it is.

Lauren:
Yes. My husband and I reached $500,000 net worth.

Dr. Jim Dahle:
Very cool. And it's particularly cool while he's still in med school. Now, granted, being at USU, he doesn't have student loans, I presume. That does help with that net worth calculation for sure. But a lot of this is just brute force savings. You guys earned money and didn't spend it.

Lauren:
Yeah, pretty much.

Dr. Jim Dahle:
Yeah.

Lauren:
He had about $18,000 of student debt from a post-baccalaureate. He decided to go to med school a little bit after we graduated undergrad. He had that to pay off. But no med school debt, and that's already gone.

Dr. Jim Dahle:
Pretty cool. How long did you say you're out of school?

Lauren:
Six years.

Dr. Jim Dahle:
Six years. Okay. Tell us what a structural engineer makes these days.

Lauren:
I make about $120,000 a year right now. I started off out of school about $70,000.

Dr. Jim Dahle:
Okay. And the USU salary is basically second lieutenant pay for a military officer. What is that these days, including any BAH and BAS?

Lauren:
Right. With the stipends, if you adjust it to what a normal salary would be, so if you increased by about 25%, it's close to $100,000 a year for our area. We make more because we're in a high cost of living area for him. He makes probably $95,000 to $100,000.

Dr. Jim Dahle:
Yeah, that's significantly better than those who are in the HPSP program. You get a much smaller stipend. You're not getting paid BAH and BAS and those tax-free allowances. So, it's a particularly high paying way to go to medical school, maybe the highest paying way to go to medical school. Of course, it comes with a little bit longer commitment. He's got what, a seven-year commitment when he gets out?

Lauren:
Yeah, seven years. And then I think there may be some sort of reserve component as well, but I'm not exactly sure.

Dr. Jim Dahle:
Yeah, I think that's the individual ready reserve. And I think it's mostly over after seven years. Does he know what he wants to do with his career already? Is he sure he's going to stay in for 20 or plus? Or does he think seven years and out or just isn't sure yet?

Lauren:
Probably seven years and out, but he's not sure. He's going to decide soon, but he's deciding between medicine, anesthesiology and internal medicine. It kind of depends, different residency links, because if he does internal medicine, he'll probably do a fellowship. The residency portion doesn't count towards payback. So, the seven years starts once he's in attending.

Dr. Jim Dahle:
All right, you guys have a substantial income, but are in a high cost of living area, but you've already accumulated quite a bit as far as investments and cash goes in just a few years. Tell us a little bit about how you did that.

Lauren:
We started off both right out of college with no student loans. That helped us a lot. Our parents helped pay for our living expenses during undergrad. And then we both went to in-state school in Georgia. And Georgia has a program called the Hope Scholarship, where if you make a certain GPA in high school, you get free in-state tuition. We both came out of undergrad starting at basically zero net worth. That was helpful.

I've been in personal finance for a long time. And my dad helped me a lot. He taught me from a young age and helped me open up a custodial Roth account in high school. And kind of got me set up with Vanguard early out of college. So that helped a lot. And then my husband was just my boyfriend at the time. But we got on the same page before marriage with finance and savings and investments. He's been excited to also see our net worth grow and enjoys it as well.

Dr. Jim Dahle:
Yeah, it's thrilling not even out of school and already not only back to broke, but half a million dollars toward the positive, which is pretty awesome. But I like what you said about your dad helping you start from the beginning in a successful way. You had a custodial Roth account for the money you made as a teenager or whatever. He made sure you weren't investing with some crappy financial advisor. You were at Vanguard.

This sounds like it was part of your upbringing that you were taught finance from an early age and taught how to not throw your money away. What lesson is there compared to most of, many White Coat Investors whose parents didn't know that much about money and they really had to learn this all on their own?

Lauren:
Yeah, I would say my parents are the everyday millionaire type of people. My dad's a teacher and then my mom worked in publishing for sales, that kind of thing. They didn't have extravagant jobs by any means and they never really had high incomes. They were always less than six figure income. They just really were good at saving and investing and they did a bit of real estate investing on the side. They flipped foreclosed houses and that actually funded my little sister's adoption. They were kind of creative and scrappy, I guess, with making money. But yeah, they taught me a lot about saving and investing.

Dr. Jim Dahle:
Give us a sense for what your spending looks like. What do you spend on rent, cars, et cetera?

Lauren:
We spend about $75,000 a year. Our rent is $2,800 with utilities. We own both of our cars. But actually last year, the calendar year was my husband's clerkship year and I work remotely. We moved out. We put all of our stuff in storage for the entire year and we didn't have any rent payments. And we traveled TDY basically across the country to different military hospitals and stayed in hotels. With that year, we spent probably $30,000 less because we didn't have any rent expenses and we saved that up. And then at the end of the year, we bought a car cash because we were only one car household. Last year we spent about probably $50,000.

Dr. Jim Dahle:
Yeah, very cool. I've been TDY. I've stayed in hotels. It's often the military hotel on base. It's not an awesome place to stay for a year straight, especially with the spouse, especially with the spouse trying to work out of that hotel room every day. Tell us what that experience was like.

Lauren:
Yeah, it was definitely unique. I actually got pregnant last year too and we just had our first baby.

Dr. Jim Dahle:
Congratulations.

Lauren:
Well, thank you. Traveling while pregnant and living out of a hotel. And we definitely don't want to eat another hotel continental breakfast anytime soon, but it was worth it. I think it was a fun experience. We actually got to spend 10 weeks at Tripler Hospital in Hawaii. That made the whole year more than worth it.

Dr. Jim Dahle:
Yeah, that was the highlight, I bet. Okay, tell us, you just had a baby, maternity leave, career changes. What are your thoughts now that you guys are parents?

Lauren:
Yes, I'm taking 12 weeks. I'm currently in that. And I'll be going back to work in May and 10 weeks of that was paid by my job. And then I'm just taking two weeks paid time off. And then my husband, since he's in his fourth year, he's going to be able to take eight weeks off. So that'll be great. And that's all paid. He could take up to 12 with the military, but he's taking eight.

Dr. Jim Dahle:
Wow, they let him take it even as a student, interesting.

Lauren:
Yeah, I think he has a certain number of electives in his fourth year. And so he just basically doesn't take those electives and takes them as parental leave.

Dr. Jim Dahle:
Now your ability to work remotely is a pretty awesome compliment to a medical career, particularly a military medical career. Presumably he may be stationed in Germany or Japan or who knows, and you may still be able to keep the exact same job and continue with your career in that respect. Did any of that go into the decision about how to finance his medical school?

Lauren:
A little bit. I started working remotely as he was applying to jobs. Before that I worked in person in Colorado and then it lined up with COVID to where remote work started to be an option for my company. Before that, it was never really an option. I don't know how long my remote work abilities will last. It seems like it might be specific to the project that I'm working on now. And then as I switch projects, it might change. But I've been remote for about two and a half years. That was helpful in terms of med school because I got the remote position before he had been accepted to med school. We could kind of go wherever with him. And then hopefully that will continue for at least a little bit longer.

Dr. Jim Dahle:
Yeah. What advice do you have out there for two professional families finding balance, particularly early in the career?

Lauren:
Yeah, I would say the main thing is getting on the same page as your spouse. And so, looking at what are our expenses and what can we cut. And then also just seeing, okay, once we kind of know roughly what our expenses are, let's see how much we can save and kind of try to maximize that savings rate.

And I would just say for people early on, not to overcomplicate it in the beginning. What's most important is your savings rate and getting that money invested early. It doesn't necessarily have to be perfect. And I think sometimes, especially your podcast goes pretty in depth on certain topics. And maybe some of that isn't the most applicable to people just starting out. It's more important just to get in the market and ride it out. And then you can deal with those complexities as your income increases and as you get older.

Dr. Jim Dahle:
Yeah, absolutely. Good advice. Well, Lauren, congratulations on your success. You guys are doing fantastic and should be very proud of yourselves. Thank you so much for being willing to come on the podcast and inspire others to do the same.

Lauren:
Yes, thank you so much for your time.

FINANCE 101: DIFFERENT WAYS TO PAY FOR MEDICAL SCHOOL

Dr. Jim Dahle:
All right, I hope you enjoyed that interview. It's always fun to get the non-physician spouse on here and talk to them about their career, what they're doing, I think. This is interesting because there's lots of different ways to pay for medical school. Obviously, the best way is to have your parents write you a check. Nothing better. You come out, owe nothing. You don't have any student loans. You don't owe anybody any time. You haven't signed any contracts. You can do whatever you want. That's a great way to pay for school.

If you are wealthy and you have a child that's going to dental school or medical school or whatever, that is an incredible gift you can give to them. And if you've taken care of your more important financial goals, you're well on track for your own retirement, et cetera, you're in your long-term home, you've got a plan to take care of that mortgage, et cetera. Putting a little bit extra money into 529s or wherever to help your kid pay for graduate or professional school is sure a nice thing to do.

Those of us who graduated, and I don't include myself, but those of you who've graduated, which is about 27% these days who graduate debt-free from medical school, it's not uncommon at all.

The next most common method, of course, is just borrow the money. This has worked out very well in the last few years for a lot of people that only took out federal student loans. We're always having people on here that receive public service loan forgiveness. They get three to six years of payments while they're in residency and fellowship. And then they make a couple of years of payments before their payments really catch up to their income and just make like a couple of years of full attending level payments on that. And the rest gets forgiven totally tax-free.

All you have to do is stick around, be a faculty member at your residency program or find some other 501(c)(3) to pay for it. It works out very well. But even if you're not getting public service loan forgiveness, or heaven forbid something happens to that program, it's not like paying these loans back is impossible, particularly on a physician salary.

For the most part, people are getting out of med school owing $200,000, $300,000, maybe $400,000. More than that is actually a pretty small percentage these days. There are a few people out there, but mostly $400,000 or less. You can pay that off. The average physician income these days is something like $373,000. Actually, I think that's a 2023 number. So, it's probably a little bit higher than that.

Basically a one-to-one ratio, which means if you put 20% of your income toward that loan for five years, it's gone. If you live like a resident, you might be able to put even more than 20% toward those loans. We have people on here all the time that pay them off in a year or two years.

That is a totally viable way to pay for medical school. It's still a good deal to go to medical school. You can pay off those student loans and that high income over the decades more than makes up for the cost, both in time and dollars of acquiring that education.

Another way is to sign a contract. And there's all kinds of different contracts you can use to pay for medical school. For example, the spouse of our guest today, he's paying for his medical school by attending uniformed services medical school. Essentially, he is getting paid as a second lieutenant. Apparently this is close to $100,000 he's getting paid to go to school. Now he's not paying tuition, he's getting paid $100,000. And he'll have a seven-year commitment when he gets out.

Now, as you start having those longer commitments, you got to start thinking about military pensions and sticking it out for a career. But even after seven years, he's probably coming out looking pretty darn good, even though he'll probably make less money than he would outside the military while he is an attending physician in the military.

The other option that is widely used with the military is the HPSP program, the Health Professions Scholarship Program. I hate that it's called the scholarship. It should be the Health Professions Contract Program. This is not a scholarship. A scholarship is free money. This is a contract.

They pay for four years of med school and give you a stipend. I think the stipend is $2,300 or something a month these days. And then of course, it'll be a few months that you're on active duty during med school that you get paid a little bit more. And then you owe four years afterward.

Yeah, you're technically on the inactive ready reserve after that, but people basically don't get called off that. And I think the time you spend in residency counts toward that. So it's not as much money upfront, but the commitment is much less as well.

One of the big downsides of going through any sort of military program is you also have to go through the military match. And that may or may not make you happy. Military residents do get paid more than a typical civilian resident, but that might not be a program you want to train in. Maybe you want sicker patients and you can find a military hospital. I don't know. It's very specialty dependent. But keep in mind that is maybe the most significant downside of paying for medical school with a military contract.

There are other contracts out there. You can get a contract with Indian Health Services, the National Health Service Corps, an MD PhD program operates in a similar way. You're going to spend a few years doing a PhD in return for not paying tuition as you go through the program.

A lot of states have forgiveness programs. Sometimes a future employer will pay for some of your medical school, or at least agree to pay back your student loans for you. There's lots of different ways to pay for medical school. They all work for the right people.

As a general rule of caution, I would give you when it comes to contract programs is don't enter a contract program primarily to pay for medical school. If you don't want to be a military doc, don't go to USU. Don't sign up with the HPSP program. If you don't want to work in an underserved area, don't sign up with the NHSC just to pay for medical school. If you don't want to get a PhD, don't sign up to get an MD PhD just to pay for medical school.

It's okay to borrow the money. If you can get into a US MD or DO school, you're going to be able to pay the money back by just living like a resident for a few years and sending five figure checks every month to your lender. They're going to go away very quickly and you can get rid of those student loans pretty early in your career and still have an awesome financial life.

SPONSOR

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Locums works a little bit like this couple that we interviewed today's experience in his third year of med school, where he went around, they lived all over the place, including Hawaii for 10 weeks, and basically had all their expenses paid while they were there. You can really have a very low cost of living while doing locums and you often get paid more.

This is really a way that you can experience in different practice situations and really get started on the right foot financially at the beginning of your career. It's not crazy to come right out of residency and start doing locums and really design the career that you want.

In fact, I think maybe combining that with building a short-term rental empire might be the fastest route to financial independence for a physician, but obviously that's got to require you being interested in doing locums, number one, and building a short-term rental empire, number two. You certainly don't have to do those sorts of things to be financially successful as a physician.

All right, our time is up. Thanks for listening to this podcast. Thanks for being a White Coat Investor. Thanks for what you're doing during your daily life. It does matter. You are changing lives and improving them for those around you. You really are that person you said you were on your school entrance essays. And I thank you for it.

Keep your head up, shoulders back. We'll see you next time on the podcast.

DISCLAIMER

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.