James Dahle, MD is the founder of the White Coat Investor LLC where he authors a blog and published a book. I recently had an opportunity to read Dr. Dahleâ€™s book, appropriately titled, The White Coat Investor: A Doctorâ€™s Guide to Personal Finance and Investing, and it may be one of the most important books Iâ€™ve read to date. Hereâ€™s why:
â€œIf you compared the earnings/savings race between the physician and his college roommate to a 400-yard dash, the physician might be the faster runner, but he has to start fifty yards behind the starting line (student loans), he has to give his roommate a 15-second head start (lost earning years), and he has to run with a parachute tied to his waist (higher tax burden). It turns out the doctor has to be REALLY FAST (high earner with a very high savings rate) to still win.â€
As a recent graduate of dental school, Iâ€™ve found the debt load to be overwhelming at times. Formulating a financial plan to pay off my student loans while saving enough for retirement at a reasonable age is a challenging task. Furthermore, healthcare professionals learn little to nothing about finance during the decades we spend in formal education. Then, once graduated, we are told to buy this, sell that, and invest in these by people who are typically offering advice with only their commissions in mind.
In his book, Dr. Dahle tries to offer some unbiased financial advice to doctors using concise and easy to understand language.
Here is what I took away for this book and why I think you should read it.
- You will learn that it is very hard to live like a millionaire and also be a millionaire.
- You will learn why you need disability insurance, how much to purchase, and which riders to select.
- You will learn about term life insurance and umbrella insurance policies and why you may need them.
- You will learn why you may not want to live in California in Manhattan as a physician.
- You will learn that it is very difficult for an active mutual fund manager to outperform an index fund by more than the additional expenses.
- You will learn about 5 investing factors within your control.
- You will learn some guidelines for buying a home.
- You will learn how to choose an adviser.
- You will learn how to lower your tax bill.
- You will learn that retirement is possible if your wealth is managed correctly.
This book will not prepare you to swim with hedge fund managers on Wall Street, but it will lay a solid foundation for you to begin building your financial plan. You can purchase the White Coat Investor from amazon.com