Many years ago, I worked with a scribe who asked me for some financial advice. Happy to oblige, I told her that I would give her the best financial advice she would ever get. I prefaced it with the admonition that she should never forget what I was about to say.
Turns out that she was about to come into a significant amount of money and was eager to hear my sage advice. The disappointment in her face could not be hidden as I said, “Live on less money than you make.”
Our shift was over and she was less than impressed. I decided not to give her my second best piece of investment advice, “Educate yourself on the subject of investing”. As she was getting ready to go, she said with a twinge of contempt in her voice, “That might be easy for you rich doctors, but we poor scribes can’t do that.” Out the door she went wearing her $300 pair of pants accessorized with her several hundred dollar Gucci bag.
Turns out several months later, her infusion of cash funded a nice sports car and breast augmentation. I haven’t seen her in several years, but I hope she’s in medical school living her dream of becoming a doctor. It will be a rude awakening for her when she finds out that having a high income does not necessarily correlate with wealth accumulation and a high net worth.
Her story is a cautionary tale that far too many health care workers are not immune to. After years of expensive medical education and residency, it is not uncommon to see physicians saddled with the financial burdens of large homes, luxury vehicles, private schooling for their children, and multiple other expensive toys. In fact, many medical professionals do not follow the number one rule for investing. They don’t live on less than they make.
Enter stage right is Jim Dahle. Jim is an emergency medicine physician and the owner of the popular website The White Coat Investor. Jim teaches about retirement and finances on his website. In his own words he is, “Helping those who wear the white coat get a fair shake on wall street.” Jim has recently authored a book entitled, “The White Coat Investor : A Doctor’s Guide to Personal Finance and Investing.” I was asked to review it for my community here at NestEggRx.
Let me start by being effusive with my praise. Jim has made it his mission to increase the financial literacy of all health care workers. He’s not some financial “guru” doing infomercials at night living an extravagant lifestyle while telling the rest of us to pinch pennies. As an active emergency medicine physician, he is one of us. He lives his advice and has become an invaluable financial resource for so many health care providers.
His book succeeds in many ways. It reads like a how to book and covers a broad range of topics including savings, retirement, insurance, finance, asset protection, estate planning, business structures, taxes, and investing. These topics are covered expertly and are well worth the read.
I would be negligent if I did not mention the one area of the book in which I have concerns. Jim is a staunch advocate for index mutual funds. He believes strongly that long-term holding of index mutual funds with regular scheduled rebalancing should be the core component of one’s portfolio. While this advice has been sound historically, I worry that going forward it might not be right.
Having said that, if I was going to invest in mutual funds (I do not) I would do so as Jim advises. Other than this concern, I highly recommend this book. It is packed with sound financial advice. Jim is a credit to his profession and a fountain of knowledge. For those of you who have not had the opportunity to peruse his website, I highly recommend you do so. You can also pick up his book at the following links:
P.S. Whether you are just starting out in your career or having trouble getting ahead financially, you should consider picking up a copy of “The White Coat Investor -A Doctor’s Guide to Personal Finance and Investing.”
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