The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing, published 10th February 2014, is a book written by a James Dahle, an active practicing Emergency Room physician in Utah. The book’s targeted audience is high-income professionals like physicians, dentists, and other highly educated professionals who often have spent many years training to do what they do, but, for a variety of reasons, have not paid much attention to their own financial matters. While Dr. Dahle has offered bloggers a copy of the book to review, presumably for free, my own review is based on a copy I bought shortly after the book was published. In essence, my opinion has not been influenced by any sense of gratitude by being offered a free book.
The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing
Physicians, and other busy professionals, usually want the bottom line – here it is. This book is an easy to read, high-yield book with much practical knowledge that medical students, resident doctors, physicians in fellowship training, and junior faculty and attending physicians will find very useful. Currently offered on Amazon.com for less than $20, it will be the best $20 you ever spend.
Chapter 1: The Big Squeeze
How increasing tuition, decreasing reimbursement, and regulatory hassle are trying to ruin your life
Chapter 2: Millionaire by 40
How to have a seven-figure net worth five to ten years out of residency
Chapter 3: If I Had a Million Dollars
How to convert income to wealth and vice versa
Chapter 4: Medical School and Your Wealth
How picking the right school and specialty can affect your bottom line
Chapter 5: Residency and Your Wealth
Which financial chores you must do as a resident
Chapter 6: The Secret to Becoming a Rich Doctor
How to get out of debt, buy your dream house, and hatch a nest egg within five years of residency graduation
Chapter 7: The Retirement Number You Control
Why your savings rate matters more than your investment return
Chapter 8: The Motorway to Dublin
How to quit throwing your money away on stupid investments
Chapter 9: Getting Off the Motorway
What you need to know about investing in real estate, whole life insurance, private investments, and your own house
Chapter 10: Paying the Help
How to get good advice for a fair price
Chapter 11: The Basics of Asset Protection
How to protect your hard-earned money from lawsuits
Chapter 12: Estate Planning Made Simple
How to avoid estate taxes, protect your heirs, and avoid probate
Chapter 13: Income Taxes and the Physician
Why you pay too much in taxes and what to do about it
Chapter 14: Choosing a Business Structure
Why incorporating will not protect you from malpractice suits or save you much in taxes
Chapter 15: Enjoying the Good Life
How to quit worrying about your finances
Chapter 16: The Mission of The White Coat Investor
How to help doctors quit getting ripped off
What The White Coat Investor Book will Teach You
James Dahle, MD has walked the walk and faced the same challenges that medical students, residents, physicians, dentists, and other high-income professionals face, and offers some very practical insights on how such professionals can prevent the financial problems that most assume are inevitable. For example, on the ‘secret to becoming a rich doctor’ he suggests ‘live like a resident’ when first making the jump to an attending physicians and getting a big paycheck. While this may seem unconventional advice, (after all, hasn’t that young physician been waiting years to earn the big paycheck?), it is based on very sound mathematical principles – namely, it puts the power of compounding to work, as dollars saved early have more time to work and work more powerfully towards one’s financial freedom than dollars saved later in life. Another suggestion he has is ‘try not to buy a house’, and gives ‘six reasons why residents should not buy a house’. While talking about retirement, he focuses on the practical ‘the retirement number you control’ rather than what cannot be controlled. Many of his suggestions might seem like common sense, however, physicians and other ‘white coat’ professionals receive little to no training in business, personal finance, investing, insurance, taxes, estate planning, and asset protection, and his common sense manual covers many vital topics.
This book will teach medical students how to graduate from medical school with as little debt as possible, and minimize and pay off student loans quickly after residency. It will teach residents how to acquire the right types of insurance (that are least expensive earlier), and how to decide when to buy a house. And, for young attending physicians, it will help them learn about the different types of investments and how they may become a millionaire within five to ten years of residency. In addition, it has many tips on a variety of topics such as how to minimize the effects of taxes, and how to find and choose a financial advisor.
What The White Coat Investor Book will NOT Teach You
Despite its many great attributes, the White Coat Investor Book is not an in-depth manual, and those hoping that the book will be the only investment book they will ever need will be sorely disappointed. However, to his credit, Dr. Dahle provides many references at the end of each chapter that interested readers can puruse at their leisure. Although, in discussing the investing, he discusses types of risk, diversification and investment expenses, it is not an in-depth discussion. Furthermore, he does not discuss specifically how to pick investments or which funds to pick; rather he gives general comments on why chasing specific mutual funds or fund advisors is not a good idea. Readers interested in a greater discussion of the effects of expenses on fund performance or how to choose which type of fund might be interested in reading The Lies about Money by Ric Edelman. In ‘Getting off the Motorway’, he discussing different types of investments, however it is a brief survey of the common types, and not in any depth at all. Readers interested in taking their financial future in their own hands, and delving into investing in the stock market would be well served to learn about options trading and how combining stock options with investing in stocks can make their stock market investments safer. For more on this topic, read Who Should Trade and Who Should Trade elsewhere on this website.
In conclusion, the White Coat Investor: A Doctor’s Guide to Personal Finance and Investing has many great financial basics that all ‘white coat’ professionals need to know early in their training, and I highly recommend it to all busy ‘future’ high-income professionals as essential reading.
