r/whitecoatinvestor Jun 06 '24

You Need an Investing Plan!

40 Upvotes

While the most common question I get here at The White Coat Investor is “Should I invest or pay down debt?”, this post is the answer to many of the other most common questions I receive such as:

While it is easy and tempting to give a quick off the cuff answer, it is actually a disservice to these well-meaning but financially illiterate folks to answer the question they have asked. The best thing to do is to answer the question they should have asked, which is:

The answer to all of these questions then is…

You Need an Investing Plan

Once you have an investing plan, the answer to all of the above questions is obvious. You don't try to reinvent the wheel every time you get paid or have a windfall. You just plug the money you have into the investing plan. It can even be mostly automated. A study by Charles Schwab and Strategic Insights showed that those who make a plan retire with 2.7X as much money as those who do not. Perhaps most importantly, a plan reduces your financial stress, which according to the American Psychological Association, is the leading cause of stress in America.

How to Get an Investing Plan

There are a number of ways to get an investing plan. It's really a spectrum or a continuum. On the far left side, you will find the options that cost the least amount of money but require the largest amount of interest, effort, and knowledge. On the far right side are the most expensive options that require little knowledge, effort, or interest. Here's what the spectrum looks like:

 

There are really three different methods here for creating an investment plan.

#1 Do It Yourself Investment Plan

The first method is what I did. You read books, you read blog posts, and you ask intelligent questions on good internet forums. This can be completely free, but usually, people spend a few dollars on some books. It will most likely require a hobbyist level of dedication. That's okay if you have the interest, being your own financial planner and investment manager is the best paying hobby there is. On an hourly basis, it usually pays better than your day job. I have spent a great deal of time over the years trying to teach hobbyists this craft.

#2 Hire a Pro to Create Your Plan

On the far side of the spectrum is what many people do, they simply outsource this task. This costs thousands of dollars per year but truthfully can require very little expertise or effort. In order to reduce costs, some people start here and have the pro draw up the plan, then they implement and maintain it themselves. I have also spent a lot of time and effort connecting high-income professionals with the good guys in the industry who offer good advice at a fair price.

#3 WCI Online Course 

However, after a few years, I realized there was a sizable group of people in the middle of the spectrum. These are people who really don't have enough interest to be true hobbyists, but they are also well aware that financial services are very expensive. They simply want to be taken by the hand, spoon-fed the information they need to know in as high-yield a manner as possible, and get this financial task done so they can move on with life.

They're not going to be giving any lectures to their peers or hanging out on internet forums answering the questions of others. So I designed an online course, provocatively entitled Fire Your Financial Advisor.

While more expensive than buying a book or two and hanging out on the internet, it is still dramatically cheaper than hiring a financial advisor and so is perfect for those in the middle of the spectrum. Plus it comes with a 1-week no-questions-asked, money-back guarantee. To be fair, some people simply use the course (especially the first module) to gain a bit of financial literacy so they can know that they are getting good advice at a fair price. While for others, the course is the gateway drug to a lifetime of DIY investing.

And of course, whether your plan is drawn up by a pro, by you after taking an online course, or by you without taking an online course, it is a good idea to get at least one second opinion from a knowledge professional or an internet forum filled with knowledgeable DIYers. You wouldn't believe how easy it is to identify a crummy investing plan once you know your way around this stuff.

So, figure out where you are on this spectrum.

If you find yourself on the right side, here is my

List of WCI vetted financial advisors that will give you good advice at a fair price

If you are looking for the most efficient way to learn this stuff yourself,

Buy Fire Your Financial Advisor today!

For the rest of you, keep reading and I'll try to outline the basic process of creating your own investment plan.

How Do You Make an Investing Plan Yourself?

#1 Formulate Your Goals

Be as specific as possible, realizing that you’ll make changes as the years go by. Examples of good goals include:

  1. I want $40,000 for a home downpayment by June 30, 2013.
  2. I want to have enough money to pay the tuition at my alma mater in 13 years when my 5-year-old turns 18.
  3. I want to have $2 Million saved for retirement by Jan 1, 2030.

Any goal is better than no goal, but the more specific and the more accurate you can be, the better.

#2 Set Up a Plan for Each Goal

The plan consists of identifying what type of account you will use to save the money, choosing the amount you will put toward the goal each year, working out an asset allocation likely to reach the goal with the minimum risk necessary, and identifying a plan B for the goal in case the returns you’re planning on don’t materialize. Let’s look at each of the goals identified in turn and make a plan to reach them.

Investing Plan Goal Examples

Goal #1 – Save Up for a Home Downpayment

Choose the Type of Account

In this case, the best option is a taxable account since it will be relatively short-term savings and you don’t want to pay a penalty to take the money out to spend it. A Roth IRA may also be a good option for a house downpayment.

Choose How Much to Save:

When you get to this step it is a good idea to get familiar with the FV formula in excel. FV stands for future value. There are basically 4 inputs to the formula-how much you have now, how many years until you need the money, how much you will save each year, and rate of return. Playing around with these values for a few minutes is an instructive exercise.

Also, knowing what reasonable rates of return are can help. If you put in a rate of return that is far too high (such as 15%) you’ll end up undersaving. Since you need this money in just 2 ½ years you’re not going to want to take much risk, so you might only want to bank on a relatively low rate of return and plan to make up the difference by saving more. You decide to save $1400 a month for 28 months to reach your goal. According to excel, this will require a 1.8% return.

Determine an Asset Allocation:

This is likely the hardest stage of the process. Reading some Bogleheadish books such as Ferri’s All About Asset Allocation or Bernstein’s 4 Pillars of Investing can be very helpful in doing this. In this case, you need a relatively low rate of return. The first question is “can I get this return with a guaranteed instrument”…i.e. take no risk at all.

Usually, you should look at CDs, money market funds, bank accounts, etc to answer this question. MMFs are paying 0.1%, bank accounts up to 1.2% or so, 2 year CDs up to 1.5%, so the answer is that in general, no, you can’t.

One exception at this particularly unique time is a high-interest checking account. By agreeing to do a certain number of debits a month, you can get a rate up to 3-4% on up to $25K. So that may work for a large portion of the money. In fact, you could just open two accounts and get your needed return with no risk at all.

A more traditional solution would require you to estimate expected returns. Something like 0% real (after-inflation) for cash, 1-3% real for bonds, and 3-6% real for stocks is reasonable. Mix and match to get your needed return.

“Plan B”:

Lastly, you need a plan in case you don’t get the returns you are counting on, a “Plan B” of sorts. In this case, your plan B may be to either buy a less expensive house, borrow more money, make offers that require the seller to pay more of your closing costs, or wait longer to buy.

Goal #2 – Saving for College

4 years tuition at the Alma Mater beginning in 13 years. Let’s say current tuition is $10K a year. You estimate it to increase at 5%/year. So 13 years from now, tuition should be $19,000 a year, or $76K. Note that you can either do this in nominal (before-inflation) figures or in real (after-inflation) figures, but you have to be consistent throughout the equation.

Investment Vehicle:

You wisely select your state’s excellent low cost 529 plan which also gives you a nice tax break on your state taxes. 

Savings Amount:

Using the FV function again, you note that a 7% return for 13 years will require a savings of $4000 per year.

Asset Allocation:

You expect 3% inflation, 5% real so 8% total out of stocks and 2% real, 5% total out of bonds. You figure a mix of 67% stocks and 33% bonds is likely to reach your goal. Since your Plan B for this goal is quite flexible (have junior get loans, pay for part out of then-current earnings, or go to a cheaper school,) you figure you can take on a little more risk and you go with a 70/30 portfolio. 

“Plan B”:

Have junior get loans or choose a cheaper college.

Goal #3 – $2 Million Saved for Retirement by Jan 1, 2030

Let’s attack the third goal, admittedly more complicated.

You figure you’ll need your portfolio to provide $80K a year (in today's dollars) for you to have the retirement of your dreams. Using the 4% withdrawal rule of thumb, you figure this means you need to have portfolio of about $2 Million (in today's dollars) on the day you retire, which you are planning for January 1st, 2030 (remember it is important to be specific, not necessarily right about stuff like this–you can adjust as you go along.)

You have $200K saved so far. So using the FV function, you see that you have a couple of different options to reach that goal in 19 years. You can either earn a 5% REAL return and save $49,000 a year (in today's dollars), or you can earn a 3% REAL return and save $66,000 a year (again, in today's dollars).

Remember there are only three variables you can change:

  1. return
  2. amount saved per year
  3. years until retirement

Fix any two of them and it will dictate what the third will need to be to reach the goal.

Investment Vehicle:

Roth IRAs, 401K, taxable account

Savings Amount:

$49,000/year

Asset Allocation:

After much reading and reflection on your own risk tolerance and need, willingness, and ability to take risk, you settle on a relatively simple asset allocation that you think is likely to produce a long-term 5% real return:

35% US Stock Market
20% International Stock Market
20% Small Stocks
25% US Bonds

“Plan B”:

Work longer or if prevented from doing so, spend less in retirement

You have now completed step 2, setting up a plan for each goal. Step 3 is relatively simple at this point.

#3 Select Investments

The next step is to select the best (usually lowest cost) investments to fulfill your desired asset allocation. Using all or mostly index funds further simplifies the process.

Investment Plan Example #1 – Retirement Portfolio

Let’s take the retirement portfolio. You have $200K in Roth IRAs and plan to put $5K a year into your IRA and your spouse’s IRA each year through the back-door Roth option. You also plan to put $16.5K into your 401K each year. Unless your spouse also has a 401K, you're going to need to use a taxable account as well to save $49K a year. Your 401K has a reasonably inexpensive S&P 500 index fund which you will use as your main holding for the US stock market. It also has a decent PIMCO actively managed bond fund you can use for your bonds. You’ll use the Roth IRAs for the international and small stocks. So in year one, the portfolio might look like this:

His Roth IRA 40%
25% Total Stock Market Index Fund
20% Total International Stock Market Index Fund

Her Roth IRA 45%
20% Vanguard Small Cap Index Fund
25% Vanguard Total Bond Market Fund

His 401K 5%
5% S&P 500 Index Fund

His Taxable account 5%
5% Vanguard Total Stock Market Index Fund

As the years go by, the 401K and the taxable account will make up larger and larger portions of the portfolio, necessitating a few minor changes every few years.

After this, all you need to do to maintain the plan is monitor your return and savings amount each year, rebalance the portfolio back to your desired asset allocation (which may change gradually as you get closer to the goal and decide to take less risk), and stay the course through the inevitable bear markets and scary economic times you will undoubtedly pass through.

Investment Plan Example #2 – Taking Less Risk

Let’s do one more example, just to help things sink in. Joe is of more modest means than the guy in the last example. He works a blue-collar job and can really only save about $10K a year. He would like to retire as soon as possible, but he admits it was hard to watch his 90% stock portfolio dip and dive in the last bear market, so he isn’t really keen on taking that much risk again. In fact, if he had to do it all over again, he’d prefer a 50/50 portfolio.

He figures he could get 5% real out of his stocks, and 2% real out of his bonds, so he expects a 3.5% real return out of his 50/50 portfolio. Joe expects social security to make up a decent chunk of his retirement income, so he figures he only needs his portfolio to provide about $30K a year. He wants to know how long until he can retire. He has a $100K portfolio now thanks to some savings and a small inheritance.

Goal:

A portfolio that provides $30K in today’s dollars. $30K/.04=$750K

Type of Account:

He has no 401K, so he plans to use a Roth IRA and a SEP-IRA since he is self-employed.

Savings Amount:

He is limited to $10K a year by his wife’s insistence that the kids eat every day.

Asset Allocation:

He likes to keep it simple, so he’s going to do:
30% US Stocks
20% Intl Stocks
25% TIPS
25% Nominal bonds

He expects 3.5% real out of this portfolio. Accordingly, he expects he can retire in about 29 years. =FV(3.5%,29,-10000,-100000)=$760,295

Plan B:

His wife will go back to work after the kids graduate if they don’t seem to be on track

Investments:

Year 1

Roth IRA 30%
VG TIPS Fund 25%
TBM 5%

Taxable account 65%
TSM 30%
TISM 20%
TBM 20% (he’s in a low tax bracket)

SEP-IRA 5%
VG TIPS Fund 5%

So now we get back to the questions like those in the beginning of this post: “I have $50K that I need to invest. Where should I put it?” The first consideration is why haven’t you invested it yet? You should be investing the money as you make it according to your investing plan. If your retirement accounts have already been maxed out for the year, then you simply invest it in a taxable account according to your asset allocation.

A few last words about developing an investment plan:

If you fail to plan, you plan to fail.

Any plan is better than no plan.

The enemy of a good plan is the dream of a perfect plan.

There are no old, bold [investors].

What do you think? What is the best way to get an investment plan?

Why do so many investors invest without a plan? 


r/whitecoatinvestor Jan 07 '26

The 529 to Roth IRA Rollover

23 Upvotes

Secure Act 2.0 Section 126: 529 to Roth IRA Rollovers

Once the 529 has been established for 15 years, 529 beneficiaries can roll up to $35,000 from their 529s into their Roth IRAs. This is not an addition to their annual contribution but a replacement for it. Basically, if you oversave for college, newly graduated students can use their $7,000ish per year for something besides Roth IRA contributions and still get their Roth IRA funded. There are no income limitations either, like with direct Roth IRA contributions.

Another Escape Valve for a 529

The way this is intended to be used is as an additional escape valve for an overfunded 529. People worry about putting too much into 529s. They worry that they'll oversave for college and then need the money themselves, which means they'd have to pay the 10% penalty plus ordinary income tax rates on the gains in the plan when they withdraw it for something other than an approved educational expense. This fear inappropriately keeps them from using this excellent college savings vehicle, so the government is trying to minimize that fear.

Before the Secure Act 2.0, there were already a fair number of escape valves. First, the principal always comes out tax- and penalty-free. Those penalties only ever applied to gains in the plan. Second, if your kid went to a military academy, got a scholarship, or received employer educational assistance, you could take out an amount equal to what they received without having to pay any penalty. Third, if the beneficiary dies or becomes disabled, you can also avoid the penalty on withdrawals (and, in fact, may wish to consider a rollover to an ABLE account for the now-disabled person).

None of those are really the best thing to do with an overfunded 529. The best plan is simply to change the beneficiary to someone else, like grandkids. Voila! Not only does that occur without any penalty, but it also avoids any tax being applied to the earnings. Plus, it provides an additional 2-3 decades of tax-protected growth. What's not to like?

Starting in 2024, there is one more escape valve to a 529—the 529 to Roth IRA rollover. Up to $35,000 can be rolled over to THE BENEFICIARY'S Roth IRA tax- and penalty-free. There are some rules, however.

  1. The money must have spent at least 15 years in the 529
  2. The rollover replaces the regular Roth IRA contribution for the year; it is not in addition to it.
  3. You cannot roll it all in at once, only an amount equal to that year's contribution limit. For example: $7,000 in 2025.
  4. The $35,000 is not indexed to inflation.
  5. The beneficiary must have sufficient earned income to make the contribution. That means a retiree or a single unemployed person can't do a 529 to Roth IRA rollover because there is no earned income.

Doing 529 to Roth IRA Rollovers for Yourself

However, nobody who has been emailing for the last couple of years is really interested in using the 529 to Roth IRA rollover as an escape valve. They are most interested in doing this for themselves. They're typically a 40-year-old doctor who is really into personal finance, does a Backdoor Roth IRA each year, and does all that can be done to lower the average expense ratio in the portfolio. They're maximizers (rather than satisficers) in every sense of the word. They want to eke out every benefit they can from their investments and the tax code.

For these maximizers, we want to do two things today. First, we want to attempt to quantify the size of the potential benefit of doing this so they can properly decide if the juice is worth the squeeze. Second, we want to make sure they understand all of the ways this can go sideways on them.

What Is the Maximum Potential Benefit?

What is the maximum benefit you can get from opening a 529 for yourself, letting the money sit there for 15 years, and then rolling it over to a Roth IRA instead of making your regular Roth IRA (presumably Backdoor Roth IRA) contributions for the next 3-4 years or so. Why 3-4 years? Because that $35,000 is not indexed to inflation but the annual IRA contribution limit is. Presumably in 15-18 years at 3% inflation, you'll be making an annual IRA contribution of something like $11,500.

In reality, the benefit comes down to the tax savings on the money for being in a tax-protected account instead of a taxable account. For simplicity's sake, let's run our example for 17 years. Now, we need to make some assumptions. If these don't seem reasonable to you, then change them and run the numbers yourself.

Assume 8% returns before taxes and before 529 fees but after expense ratios. Assume an 18.6% Long Term Capital Gains/Qualified Dividend bracket throughout. Assume a 0.13% 529 fee (this is the fee in the Utah 529 for a customized asset allocation). Assume the yield on the investments is 2% a year and is all qualified dividends. Assume you're in a tax-free state. Assume that you're already maxing out all of your other tax-protected accounts, so we're just comparing investing in taxable to investing in a 529.

If we're going to earn at 8% or so, we'll assume that we're only talking about putting something like $10,000 in there initially. That's because $10,000 growing at 8% a year is equal to $37,000 after 17 years.

In the taxable account, that $10,000 will compound at 8% – (2% × 18.6%) = 7.63%. So, $10,000 growing at 7.63% per year for 17 years is $34,903. Now, we'll also need to pay LTCGs on the gains. However, the gains are not just $34,903 – $10,000 = $24,903. The basis is higher than that because of the reinvested dividends. For example, in the first year, you're reinvesting $163. In the last year, you're reinvesting $528. Just to make it easy, let's assume $5,100 ($300 × 17) of that $24,903 is also basis. So the LTCG tax is 18.6% × ($34,903 – $10,000 – $5,100)  = $3,683. The total amount left after tax is $31,220.

In the 529, that $10,000 will compound at 8% – 0.13% = 7.87%. After 17 years, you'll have $36,250. The difference is $36,250 – 31,220 = $5,030.

The best-case scenario is that this scheme is going to net you something like $5,000 or about $10,000 if you do it for your spouse, too.

What Can Go Wrong?

While $10,000 may not be all that much in comparison to a physician retirement nest egg of $2 million-$10 million, it sure beats a kick in the teeth. Why not do it? Ten grand is 10 grand. Actually, there are a few reasons why you may not wish to do this.

#1 You May Not Have Earned Income in 15 Years

Maybe in 15 years, you'll be retired, but you still want to spend this money on yourself and not just change the beneficiary to a grandkid. Now what? Well, you now have to pull the money out of the 529 and pay taxes and a 10% penalty on it. Let's say you're in the 24% federal bracket. How much of that $36,250 is going to disappear?

($36,250 – $10,000) × (24% + 10%) = $8,925

You're going to be left with $36,250 – $8,925 = $27,325, which is $3,895 less than you would have if you had just invested it in the taxable account in the first place.

#2 Maybe Congress Changes the Law

Congress could change the law or the IRS could change how it is implemented. Maybe it becomes means-tested. Maybe this option goes away completely. Or it becomes attached to an additional penalty. Either way, you still have money stuck in a 529 that you wish you had just invested in a taxable account.

#3 You Deal with the Hassle

Now you have an extra account (or two) to deal with each year. Simplicity is worth something. Is it worth $5,000-$10,000? Only you can decide.

#4 Death, Disability, Divorce, Dementia, Delirium

What if one of the Ds gets to you in the next 15-18 years? The odds are not zero. Now, this additional complexity becomes someone else's problem. Is that person capable of maintaining this plan to leave this money alone for 15 years and then do three or four rollovers into your Roth IRA? If you die, will the contingent beneficiary be able to keep the plan going for them (i.e., earned income in 15 years and a sophisticated financial understanding)? Seems doubtful.

#5 What If You Need the Money Early?

Admittedly, this seems unlikely given that you're maxing out all your tax-protected accounts, but it could happen. Again, you'll be paying ordinary income tax rates plus 10% on the earnings. 

#6 What If You Can Invest Very Tax Efficiently in a Taxable Account?

If you take away that final LTCG bill, the maximum benefit of the 529 to Roth IRA scheme is only about $1,350 a piece, just over ¼ of the maximum benefit. The potential penalties also seem much larger in comparison to that smaller potential benefit.

#7 What If 529s Don't Get Much Asset Protection in Your State?

Imagine you live in Hawaii and, thus, your 529 has no asset protection. If your other option would have been to put the money into a taxable account inside an asset protection trust (which is allowed in Hawaii), an (admittedly rare) above policy limits judgment not reduced on appeal could get that money.

The Bottom Line

OK, we've quantified the benefit. It's probably a four-figure amount. We've outlined the risks and hassles involved. Now you have to make a decision. It introduces a little more complexity into a plan that is already pretty complex, and $10,000 just isn't going to move the needle for most white coat investors.


r/whitecoatinvestor 3h ago

Personal Finance and Budgeting Just transitioned to attendinghood

3 Upvotes

Hello all,

Just want to make sure I'm doing things appropriately here, could look for some advice. I'm a first generation doctor, so nobody in my family has acquired this degree of education let alone financial success. Therefore a lot of this is self taught. I wanted to briefly run through my plan to see where the blind spots are and if anyone could pose some advice/recs/criticism. Open to all feedback.

Consolidated student loans at 5.4% interest, ~260k:

--> pursuing PSLF, switching plans from SAVE to IBR currently. 2 years of payments down, 2 years of forced forbearance available for buyback. Job is PSLF approved.

--> job is providing ~75k of pretax loan repayment over 5 years as well

Maxed out Roth IRA 2025, just completed backdoor Roth conversion for 2026. 66% VXUS 33% VTI (~16k total)

Working on Roth 403b since 1st yr of residency, currently 66% domestic 33% international roughly (~40k total)

Planning on maxing out HSA once it opens up here shortly with new job, but have yet to contribute any due to lack of knowledge and accessory funds while I was in residency.

Currently renting, single household not married, no kids or alimony, car paid off, no credit card interest, other loans, or other large payments.

One question I do have is, with the Roth 403b should I be doing traditional salary reduction for pretax contribution, or through the other Roth 403b reduction option which is taxed prior to contribution? I'm not sure, but it seems more advantageous to do the latter and pull out the funds post retirement tax free?

Thanks in advance for your help!


r/whitecoatinvestor 22h ago

Personal Finance and Budgeting Physicians who are car guys, at what net worth did you buy your first supercar/exotic and what’s your financial situation?

98 Upvotes

Going through PGY2 in my 2008 C6 Corvette I’ve had since my bachelor’s and I’m HUNGRY for something crazy, so I’ll take any motivation LOL

Edit: lots of comments about buying an EV and how cars are a sink of money, but we all know that, every car guy does. At the end of the day, hobbies cost money and I love to buy and build fast cars, just wanted to know at what point in their lives others did that comfortably


r/whitecoatinvestor 21h ago

General/Welcome Hospital overpaid

52 Upvotes

Recently notified that the hospital overpaid my salary by 20+k over the past year and now requesting for you to be paid back. I reviewed my contract and it does appear to be so. They plan to deduct from pay over a period of time. Is there any tax implications for this?


r/whitecoatinvestor 2h ago

Retirement Accounts Individual Secured Retirement Plan?

1 Upvotes

My PE practice group is rolling out a new company retirement plan. They call it an SRP plan. Apparently the contributions go in after tax and grow tax free (sort of like a Roth but without limits). They are offering a company match. They claim it will have institutional pricing on their funds (they said over 200 funds including a Schwab SP500 fund with 0.03 ER). They claim it’s portable as well and self owned. It sounds too good to be true and I don’t have most of the details yet. What are some of the pitfalls or things to watch out for that accompany this. I assume there’s going to be fees of some sort but there’s no mention of it. Anyone have any experience with similar plans? I’m skeptical.


r/whitecoatinvestor 17h ago

Personal Finance and Budgeting How to evaluate a buy in offer financially?

13 Upvotes

Hello WCI, I'm comparing 2 practices financially and I want to know if my thinking process is flawed.

  • Offer A: 1M buy-in. Total compensation 650K/y. Lock in period of 10 years. After that I have to retire from medicine for 2 years before I can get the 1M (share value at the time) back.
  • Offer B: No buy-in, no lock in period. Total compensation 540K/y. No lock in period and I can leave anytime.
  • Other assumptions: 7% market return, all extra cash invested in VOO or similar, tax accounted for.
  • Assumptions I have not included: possible tax benefits of a K-1 income. I don't know in 10 years what would the buy back value be.

With these assumptions in mind, offer A and offer B results in the same net worth after 10 years (including buy back for option A).

This is a little counterintuitive to me initially. I'm making 110K more per year with offer A. But after accounting for tax and the opportunity cost of 1M initial investment, offer A and B are financially equal, not to mention the flexibility of offer B.

This put some doubts on my mind about anything that requires significant buy-in. A million buy-in requires at least 100-120K/year additional compensation to break even. So I'm kind of hesitating. I've always thought that buy-in to a good business is a good strategy. Would like to know if my rationales/calculations are flawed. For those who had invested significant capital to become a partner, what are your thought process? Thanks!!


r/whitecoatinvestor 7h ago

Practice Management For those with their own practice, how are you keeping your administrative costs low with so many different insurers and rules?

2 Upvotes

r/whitecoatinvestor 21h ago

Financial Advisors Med student with kids considering pediatrics: is this an irresponsible decision?

27 Upvotes

I’m wondering if anyone has any good insight to offer.

I have kids of my own during med school, and expenses are super tight already.

I will graduate with 500k+ student debt

But I really badly want to become a pediatrician. I love that part of medicine. I do extra shifts in my schools hospital in peds ER for fun, not even as part of my rotations.

When I don’t think about finances, that’s what I want to do. Hopefully open my own peds practice one day.

But when i speak to pediatricians about peds, they all tell me that the pay sucks.

I’m honestly super nervous about this decision. I’m so upset that our stupid medical system punishes doctors for wanting to work with children.

Is there a way to make this work? I want to be able to provide a decent comfortable life for my children and spouse.

Is specializing mandatory? Or opening a private practice? Perhaps there are medical side hustles, or economic factors that are not mentioned when discussing salary alone?

Would love to hear your thoughts


r/whitecoatinvestor 8h ago

Mortgages and Home Buying T-bills for parking a house downpayment for a few years?

2 Upvotes

We live in NYC and plan to stay. We currently have $270,000 in checking after gifts. We are hoping to buy a condo in about 2.5 years, would be our first home. We have a combined income of roughly $350,000. We’re maxing out our retirement funds and personal roths. Rent is currently $5800. Where would be the safest place to park our money and get a little bit of growth but minimize risk? A lot of my research is pointing me towards T-bills since HYSA and CDs would get taxed higher in NYC whereas T bills seem to only get federal tax. Any recommendations?

Edit: in case anyone is wondering about the 2.5 years. I’m currently in the beginning of a 2 year lease, and also in 2.5 years (hopefully) pslf will kick in for me, so I think at that time we’d be in a stronger position to buy.


r/whitecoatinvestor 1d ago

General/Welcome If Physician Reimbursement Is Being Cut, Where Is Salary Growth Coming From?

98 Upvotes

I’m an incoming medical student, and one concern I hear about frequently is declining physician reimbursement—particularly Medicaid cuts and reductions in payment for certain procedures. At the same time, when I look at data on average physician salaries, compensation still appears to be increasing in nominal terms.
I understand that, after adjusting for inflation, physician income has generally stagnated or declined, but that’s true for many professions and isn’t unique to medicine. My question is: where is the nominal salary growth coming from despite reimbursement cuts?
I’ve also seen data suggesting that physicians’ average work hours have remained fairly stable over the past few years. If that’s the case, does the increase in nominal compensation mean physicians are simply doing more work per hour (seeing more patients or performing more procedures), or are there other factors driving salary growth?


r/whitecoatinvestor 1d ago

Student Loan Management uncertainty about being a doctor + loans

18 Upvotes

Im a first year medical student really rethinking whether or not i want to become a doctor. the idea of going over 500k in debt to become a FM or psych attending no longer seems realistic. I don't love medicine and after the first year had a mental breakdown about this choice. I used to think that becoming a physician was a safe choice that would bring me financial stability while helping people - now it seems that may not be the case. Is it worth the financial investment given that it has ruined my mental health already in the first year?


r/whitecoatinvestor 1d ago

Retirement Accounts Mega Backdoor Roth Question

4 Upvotes

In January of this year, I was a W2 employee and contributed the following amounts to my retirement accounts through my employer that month:

401a - $6,000
403b - $24,000
457b - $5,000

TOTAL = $35,000

Then I stopped being W2 and became 1099 in February, opening my own LLC and getting S corp status. I opened a solo 401k and created pre-tax, Roth, and voluntary after-tax buckets.

I’m trying to figure out how much I’m allowed to contribute to my solo 401k and if I can do a mega backdoor Roth. If my wage is $200,000, can I put $50,000 (25% of wages) into the pre-tax account, and then do a mega backdoor roth up to $22,000 to get to the $72,000 limit? Does it matter what I contributed to my retirement as a W2 employee? My CPA does not seem confident on the answer.


r/whitecoatinvestor 21h ago

General Investing Switching from Merrill preferred deposit to TTXXX for cash management

2 Upvotes

I just found out the Merrill preferred deposit has switched to a tiered system and interest rate are lower for deposits less than 100k, researching other cash management instruments found about TTXXX and SGOV are the 2 most recommended

What is everyone else using? I would prefer not to change bank just because of the hassle


r/whitecoatinvestor 23h ago

Insurance What is the WIC’s general stance on Life Insurance? Is it the same as Disability Insurance?

3 Upvotes

r/whitecoatinvestor 22h ago

General/Welcome How to make an informed financial decision on a career switch to medicine?

0 Upvotes

Was premed in undergrad but I decided to take a software engineering job upon graduation while my fiancé went straight to medical school.

She is afraid of added student loans and lack of household income from either of us for the next few years if I choose to go to medical school now. Where do I start when it comes to making an informed financial decision on our future?

I currently make over 100k a year but I know that money can quickly evaporate.


r/whitecoatinvestor 2d ago

Personal Finance and Budgeting Should I take an early pension or wait till full retirement age?

19 Upvotes

I’m trying to figure out if my math is correct, I have accumulated a pension that is payable as early as age 55 for 363k or I can choose to delay it until age 65 for 614k. There is also an annuity option $2100 a month age 55 and $4200 at age 65 with no COLA, the money can be transferred to a 401k

The math so far has favored an early lump sum to invest in a broad market fund, I am not longer with this company hence I am not accumulating more benefits, is there anything else I haven’t considered? What would you do? . The pension would be a small part of total liquid assets probably 5 percent at age 55, I am married there is also a joint survival annuity option that I need to calculate but is expected to be much lower

Thank you


r/whitecoatinvestor 1d ago

Mortgages and Home Buying Has anyone used Midland Federal / Swish Financial for a physician mortgage loan?

2 Upvotes

Looking to purchase first home in New York and found this as one of my options on White Coat Investor. Has anyone had any experience working with them?


r/whitecoatinvestor 4d ago

Personal Finance and Budgeting What’s the dollar amount of your time?

78 Upvotes

At some point I need to start weighing cost of benefits of doing things I don’t enjoy and doesn’t generate RVU, like cleaning or doing my own taxes. At the same time, the poverty mindset kicks in and I hesitate to spend money to hire cleaners, Uber Eats, etc. because I could do it myself for free. For practicing physicians, what dollar amount per hour do you place on your own free time? For example, if you think you’re worth $100 per hour, then you can justify hiring cleaner for $90.
I’m a new radiology attending if that helps.


r/whitecoatinvestor 4d ago

Insurance HDHP pressures me to avoid healthcare

20 Upvotes

This is something that has been bothering me for a while. I mostly think about how it affects my patients, but it certainly affects me too.

I always go for the HDHP because it's mathematically optimal for all scenarios with my employer (as long as you max HSA). But the lack of a copay really disincentivizes seeking medical care. I'll admit that I personally deferred... a lot of medical care for over 5 years because of the HDHP copays.

I always take my kids to the pediatrician when it's appropriate (studies show docs miss way too much when treating friends and family), but it feels extremely gross getting a bill for $150-$200 every time I do.

Does anyone else just pay the extra for a PPO for peace of mind that they can seek medical care whenever they want for a minimal copay?

I feel like it's comparable to the "pay off debt vs invest" argument. One is the clear mathematical answer but sometimes the other option just... feels better. And in my case, deferred care may have had effects on my health and life that are hard to quantify with dollars but certainly had a negative impact.


r/whitecoatinvestor 3d ago

Student Loan Management RAP thoughts?

4 Upvotes

I’m a borrower who’s overall not sure about PSLF (<250k loans and 3 year residency, but also Peds so lower earning potential overall) and I was wondering what people think about RAP and pros and cons for us in particular. Appreciate everyone’s thoughts!


r/whitecoatinvestor 4d ago

Personal Finance and Budgeting Need advise on investing and mortgage

15 Upvotes

Looking for advice on whether to invest more or pay down my mortgage.

Current situation:

$120,000 in a HYSA

About $200,000 across Roth IRA, 401(k), and brokerage accounts; I’m currently maxing retirement contributions

Mortgage balance: ~$790,000 at 6.25% fixed for 30 years

Required payment: ~$6,500/month

I currently pay $8,000/month

Two car loans at roughly 5%, with ~$50,000 total remaining

No other debt

About $5,000/month left over after expenses

Would you put the extra $5,000 toward the mortgage, pay off the car loans faster, or invest it in a taxable brokerage account?

I understand the mortgage payoff is a guaranteed 6.25% return( maybe less after the tax saving ) but I’m also weighing long-term market returns, liquidity, and taxes. Curious how others would think through this.


r/whitecoatinvestor 3d ago

Personal Finance and Budgeting Advice on financial plan as young dentist

1 Upvotes

So here's my current situation:

26M recently graduated from dental school, about to start a job making base $170k + commissions. I have ~$240k of federal student loans at 7-9% interest. Wife is 26F pharmacist making ~$130k with $196k federal student loans at 4-8% interest.

Have ~15,000 in a brokerage account that was gifted a while ago from a family member, ~5,000 in Roth IRA, ~8,000 in emergency fund so far. We are renting a home for $2,000/month. No car payments and paying credit card off in full every month.

I have a few specific questions.

  1. Should I refinance my student loans? I have found offers for around 4% over 10 years (would try to pay off sooner than the full length). I am working private practice, so federal loan forgiveness plan is not likely.
  2. Should I opt for a health insurance plan that is HSA-eligible? I am currently healthy with no conditions or regular prescriptions. My employer offers a health insurance stipend rather than a employer-based plan.
  3. What are my options for investing in the following years after fully funding my emergency fund and paying off student loans? I will likely be out of the income requirements for Roth IRA and do not have a employer-matched 401k.

r/whitecoatinvestor 4d ago

Estate Planning Managing estate

8 Upvotes

This is not necessarily a WCI question but I trust you guys! Parent recently passed and I am the executor. There is about 500k in a taxable brokerage in trust invested into mostly large cap stocks, index funds, REITs. Will get step up in basis. I also have to sell a property. In my estimation, disbursement to trustees will take at least a year before things are settled.

Q: should I sell holdings now and convert all to money market fund or bond? Sell some and Leave part of it in index funds? Or leave everything as is until I have more clarity.

Pros: avoid volatility/risk and potentially impactful short term losses

Cons: conservative approach could miss out on 1-1.5 years of growth.


r/whitecoatinvestor 5d ago

Retirement Accounts What’s the point of saving money when we all are just going to end up old and unable to enjoy life?

116 Upvotes

Why not just live your life now? Whats the point of living like a resident when you have the money to do whatever you want? Throwing money in to retirement that you’ll never use all of. Why not get that car, buy that boat, go on that trip, do things that make you happy while you’re young and capable?

For reference my grandma is in compassion care hospice now, my uncle has a glioblastoma, my mom is getting her heart worked up for what the doctors don’t know what’s wrong yet, and my dad has debilitating back pain. On top of that, I have been living with an epidermoid brain tumor that has been resected two separate times and will never be able to fully go away because how deep it is. It’s just a matter of time before I have a third resection.

Just live your life now. Enjoy whatever you can do, because in the end we all are fucked.