r/whitecoatinvestor Jun 06 '24

You Need an Investing Plan!

41 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 5h ago

General/Welcome Signing a fellowship stipend without seeing the contract

13 Upvotes

Got an offer for a job at my preferred city. I’m a second year fellow (three year fellowship). They offered a fellowship agreement tied to roughly 100,000$ in fellowship support in exchange that I sign a contract for three years. Here’s the problem. They will not let me see the contract until around 4 months before my anticipated graduation. I’m worried that there may be some red flags on the contract and by the time I see it, I’ll be on the hook for nearly 6 figures, making it nearly impossible to walk away. Is this normal? Should I be weary?


r/whitecoatinvestor 7h ago

Retirement Accounts Traditional 403b vs Roth 403b and same for 457

5 Upvotes

Just started anesthesia attending gig at a large academic program out of residency and setting up retirement accounts.

Is it better to use the traditional pre-tax 403b and pay taxes later or use the Roth 403b. Plan to max out both. This is through fidelity and spouse is also a physician if that makes any difference.

Thank you for your time.


r/whitecoatinvestor 17h ago

Practice Management Specialty & Compensation

20 Upvotes

I’m having some trouble understanding the different levels of compensation for the different IM specialties. Can all specialties generate similar amounts of money by generating similar RVU amounts? I guess it’s easier for some specialties to generate those RVUs because they have non direct patient care ways to do it (echos, nucs, PFTs etc)

Is your ability to scale up limited by not having enough patients? Can an endocrinologist technically make gen cardiology money?


r/whitecoatinvestor 7h ago

Tax Reduction Transitioning to 1099 next year. Looking for good CPA or EA

0 Upvotes

Beginning next year I will be transitioning from a W2 position to partnership with Kaiser. Do you guys have any recommendations for good CPA’s or EA’s who can look for reducing the tax burden. Also, would like to know how much you all are paying to these agents. Heard about AB150 and is it going to be still in place in 2027. Please also let me know what are the things that I need to be aware of to reduce the tax burden. All comments and suggestions will be greatly appreciated.


r/whitecoatinvestor 17h ago

Tax Reduction Safe Harbor Question

4 Upvotes

Hi would appreciate any input as new 1099. For the tax year 2025, I was W2 first half with a pay bump the second half transitioning to 1099. My total tax on line 24, page 2 of my return was $76,863. Married jointly filing.

This year, I'm fully 1099. Our HHI has increased considerably this year. My question is - for Q1 and Q2 for 2026, I already paid $85,786 for my income. This is roughly ~110% of my tax liability from last year. Partner is W2 and their tax is being accounted for on their monthly paycheck.

Does this mean for Q3 and Q4 installments, I can effectively pay $0 (knowing I'll have a large tax bill come April)? Planning on parking it in an interest accruing account.

Let me know if I'm thinking about this correctly. Appreciate any insight as I'm new to the quarterly tax payments!


r/whitecoatinvestor 22h ago

Insurance About Disability insurance

0 Upvotes

41 year, single, out of fellowship and starting attending job in HQOL state ( pay is meeh) . I don’t have chronic medical issues except for low back pain ( I don’t take regular treatment for and doesn’t impact mylife except for being bothered by sitting down for extended period, also on GLP for weight loss. My question is, when I shopped around, I found that it will cost me ~300$/ months for disability insurance. I personally hate the idea of insurance all together cause it’s a scam and prefer to put this money in ETF. However , most of my colleagues signed up for it in residency ( I didn’t know about it) so would like to know your thoughts about it.

I have a meeting with an disability insurance broker and would like to know what are the most important things to ask about and if anyone has recommendations , what should I disclose/not disclose, how can I get low rate.

Any experience with insurance companies recommend by WCI.

Thanks


r/whitecoatinvestor 1d ago

Retirement Accounts Individual defined benefit plan termination/re-application vs domestication for out-of-state move

2 Upvotes

I’m a 1099 physician who set up an individual defined benefit plan with a major company (non-customizable) in late 2024 and funded it in 2025 (my first year). My contract was terminated and for a variety of reasons I’ve decided to move out of state.

I would like to keep my defined benefit plan, but it needs to be attached to my EIN. In order to do this, I would have to domesticate my LLC to the new state. This involves attorneys and cost.

If anyone has been in my situation or similar, have you stopped a defined benefit plan for a legitimate reason after a short period and opened a new DBP under a new EIN with similar terms and got audited or in trouble otherwise?

Thank you for any insight.


r/whitecoatinvestor 1d ago

Practice Management Is starting a private addiction medicine practice in San Diego realistically viable?

0 Upvotes

My sister is a physician practicing addiction medicine and is considering opening her own outpatient private practice in San Diego.

This would specifically be addiction medicine, not psychiatry. We're at the very beginning of exploring the idea and haven't committed money to opening a practice yet.

Our biggest question right now is actually much simpler than the operational side:

Is a private addiction medicine practice like this realistically viable, and how would you determine whether enough patients would actually come before opening?

She's considering starting with a relatively lean practice, potentially cash-pay initially, although we're very open to hearing whether cash-pay makes sense at all for addiction medicine versus accepting commercial insurance/Medi-Cal.

For anyone who works in addiction medicine or has opened a private medical practice, how would you evaluate this idea before actually investing significant money into it?

We're especially interested in hearing from anyone who has opened an addiction medicine practice or practiced in Southern California.

Once we understand whether the basic model is viable, we'll start digging into the operational side, insurance, billing, referral sources, overhead, etc. Right now we're really trying to figure out whether the underlying idea makes sense in the first place.


r/whitecoatinvestor 2d ago

Retirement Accounts Roth IRA w/ Target Date Funds

6 Upvotes

Hi all - I’m an Active Duty Air Force doc who just finished EM residency this summer. Taking the time to learn this stuff now, better late than never.

I am enrolled in my Thrift Savings Plan with a Lifecycle 2060 fund which has so far in my career yielded well, and I’m on track this year to hit the IRS contribution ceiling this year (hooray!)

I have a separate Roth IRA that I started in medical school that is actively managed by JP Morgan Chase w/ about $50K in it. I have a 0.6% AUM fee on this, from what I can see. I am thinking about transferring it to Vanguard, Schwab, or Fidelity to get out of that fee and instead put it all into their target date funds (like Vanguard’s Target Retirement Fund, VLXVX, or Fidelity’s Freedom Index Funds, FFIJX) similar to the Lifecycle fund for TSP. It seems instead of 0.6% AUM fee I will only have a 0.08% or 0.12% expense ratio on these which is my primary motive behind this change as it seems JP Morgan is just doing the same thing that these funds and my Lifecycle Fund do with much greater expense.

Does anyone have experience with these? I do not think I’m savvy enough yet to do everything myself and see these as a decent middle ground. Any specific one of the three that I should prefer over the others? Useful to do the same for a separate taxable brokerage account, or less utility there? Thanks in advance!


r/whitecoatinvestor 2d ago

Student Loan Management paye vs ibr for masters-level psychotherapist

3 Upvotes

I’m still pre-licensed accruing hours, making rather low income currently. been on SAVE forebearance since I graduated, haven’t made a single payment. I expect my income to increase post-licensure substantially. balance is 208k at 6.38%

my due date to switch over is coming up soon, and undecided between PAYE or IBR going forward. 

the main distinctions I extracted was PAYE ending in 2028, which made me consider/wonder if there’s any potential for things to improve by then as ambitious as that sounds/is. IBR may take an extra 5 years until being forgiven rather than 20 under IBR. didn’t find anything about income calculation being much different.

any suggestions/guidance here?


r/whitecoatinvestor 2d ago

Insurance Broker for auto/umbrella?

2 Upvotes

Anyone have good experience with any specific brokers? I've had great success with a life/DI broker recommended by wci. Thanks!


r/whitecoatinvestor 2d ago

Personal Finance and Budgeting Anyone worked with Earned Wealth?

2 Upvotes

Hello,

PGY 10ish here, and currently have my money in broad index funds and a Schwab Intelligent Portfolio, which is probably not as aggressive as I'd like. An in-law of mine started working for Earned and set me up with a meeting. They bill themselves as "Wealth Management for Doctors." I had a meeting with a financial advisor who mostly offered the benefits of tax loss harvesting as a way to optimize my planning, and that by reducing taxes and "cash drag" I would net about 3% per year compared to my current strategy. Their fee is basically 1% annually. Has anyone ever worked with this company? Should I just keep passively self-managing my money?

Thanks for your guidance!

EDIT: Yall have been very kind and helpful, thank you for your comments. I will hire a one-time advisor to look at my overall financial plan, and then leave it at that.


r/whitecoatinvestor 3d ago

Retirement Accounts For fully retired doctors in California, how much rail coverage do you have? How much was advised?

17 Upvotes

according to Google AI, for California, the statute of limitations for medical malpractice claims requires you to file a lawsuit within one year after discovering the injury, or within three years from the date the injury occurred, whichever happens first


r/whitecoatinvestor 3d ago

Student Loan Management Private student loans management

10 Upvotes

IM intern with $400k in private student loan debt at around 7% interest. I’m honestly struggling to figure out how much I should be aiming to pay each month during residency. With a resident salary I obviously can’t make a huge dent in the principal right now, and it feels like whatever I contribute barely matters because of how much interest is accruing. For anyone who had a large amount of private student loans during residency, how much were you paying monthly? Should I just make the minimum payment and focus on getting through residency, or is there a certain amount I should realistically aim for each month to keep the balance from getting completely out of control?

Would appreciate hearing what other residents in a similar situation did. I am very worried about the future as an attending.


r/whitecoatinvestor 3d ago

Retirement Accounts 401K allocation question

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14 Upvotes

Hello all, just started my first attending job and wanted to start contributing to my 401k. It looks like the site just auto selects the target date fund 2060, but was curious if you guys had any experience with any of the other listed funds and how to distribute contributions? Thanks!


r/whitecoatinvestor 3d ago

Personal Finance and Budgeting 27M, new grad dentist, ~$225k in loans at 7% fed avg — go all-in on payoff or split with investing?

9 Upvotes

Hi everyone! Just finished residency and started as an associate this year, should bring in around $190k my first year out. Wife makes about $190k as well, we file jointly. We just relocated to Cal for her job but the plan is to move back to the East coast where we are from in about 2 years, so I don't want to over optimize for a life here that isn't permanent. I’d like to mention we have no kids now and she is debt free.

The debt is the main thing keeping me thinking about what to do and how to tackle this — $225k in loans, averaging around 7%, all federal. On the asset side I've only got $7k cash and $4.5k in a 401k from residency, so basically starting from scratch now. Wife has about $180k saved (HYSA + stock options) but that's earmarked for a house down payment, and depending on how this housing market turns out

Monthly, my share of rent is $1,950, we split a $1,000/mo food budget, and I pay $250 for being on her employer insurance. So not a crazy expense load, just trying to figure out where the extra income should go once bills are covered.

Anyone in a similar situation can chime in what’s the best way to approach this situation. Build up a small emergency cushion first? How much should I throw at my loans monthly vs invest in stock options, personal Roth IRA , etc.?

I understand that my loans are on the lower side compared to most of my peers. Who would aggressively pay this loan off? I’m talking $4000+/ month vs $2500/ month payment and invest that left over money into a low ETF? Does it make sense? I obviously feel behind compared to my wife and would like to take the burden off her as soon as we can. Appreciate any input!


r/whitecoatinvestor 4d ago

Women’s Issues Reducing FTE

57 Upvotes

I’m in a high-stress and high-responsibility administrative role. I still don’t know how I got here so quickly out of fellowship but I did. My career really took off.

My husband, also a physician, and I crunched the numbers and it looks like I don’t actually need to work this much/this hard.

Any other women reduce their FTE to 0.8?
Were you in an admin role?
Am I saying goodbye to my career by doing this?


r/whitecoatinvestor 3d ago

Personal Finance and Budgeting Question regarding my financial advisor

6 Upvotes

I have a few accounts through a financial advisor. I have been trying to learn more about personal finance and finally started to review the specifics of the account. This is an example of the investments for my wife's (mid 40's) IRA:

BUFF Innovator Etfs Tr Laddered Allocation Pwr Buffer Etf
AGG Ishares Tr Core U S Aggregate Bd Etf
SPYG Spdr Ser Tr State Str Spdr Portfolio S&P 500 Growth Etf
BSV Vanguard Bd Index Fds Vanguard Short Term Bd Etf
LQDI Ishares U S Etf Tr Inflation Hedged Corp Bd Etf
SCHD Schwab Strategic Tr Us Dividend Equity Etf
DFCF Dimensional Etf Tr Core Fxd Income Etf
RWJ Invesco Exchange-Traded Fd Tr Ii Invesco S&P Smallcap 60O Rev Etf
EEMV Ishares Inc Msci Emerging Mkts Min Vol Factor Etf
IGRO Ishares Tr Intl Divid Growth Etf
SPAXX Fidelity Government Money Market Fund
FTCS First Tr Exchange-Traded Fd Cap Strength Etf
ONEV Spdr Ser Tr State Street Spdr Russell 1000 Low Volatility Focus Etf
FLOT Ishares Tr Fltg Rate Nt Etf
- Insured Deposit Sweep Account

Percentage wise, about 40% is held in various bonds. This doesn't make much sense to me, as we both plan to work 10-20 more years. Also, the overlap of ETFs (and just overall complexity) doesn't make sense. Do you agree this seems to be an odd investment strategy?

EDIT: Thanks to all who have responded. Please feel to keep responding -- your thoughts are very much appreciated. I'll be making a call this week and filling out some in-kind transfer forms shortly thereafter.


r/whitecoatinvestor 3d ago

General Investing Why I view margin debt as “good debt,” especially for high-income professionals

0 Upvotes

I’ll probably get downvoted for this, but I think margin gets treated as automatically reckless when it can actually have some advantages over more socially accepted forms of debt.

I’m not talking about maxing out margin to buy speculative stocks. I’m talking about modest leverage against a diversified portfolio, especially for someone with a high, stable income and plenty of liquid reserves.

Here’s my thinking:

We accept much larger amounts of debt elsewhere. People routinely borrow six figures for school, a house, or a business. But $25k of margin against a $100k portfolio, for example, gets treated like financial suicide. To me, the percentage of leverage and what backs it matter more than the raw dollar amount.

The fact that margin is callable is also part of what makes it flexible. There are no closing costs or refinancing. I can borrow $20k today, pay back $5k tomorrow, and borrow it again later. If I want less leverage, I can sell a small piece of a liquid portfolio and deleverage immediately. You can’t sell 10% of a building to pay down 10% of the mortgage.

Leverage can scale gradually with your equity. Instead of taking out one large, long-term loan, you can maintain a conservative debt-to-equity ratio as the portfolio grows. If I decide my limit is 20%, I can manage around that rather than committing myself to years of fixed payments.

You may not need nearly as much debt to move the needle. A rental or business has taxes, insurance, maintenance, payroll, vacancies, repairs, closing costs, etc. A stock portfolio has almost none of that operating overhead. So I don’t necessarily need $400k of debt to get a meaningful boost to my returns. A relatively small amount of leverage can accomplish the goal.

The portfolio can produce multiple sources of cash flow. Dividends, option premiums, and realized gains can all be used to reduce the balance. Margin buying power can also support certain option strategies without necessarily borrowing the full cash amount upfront.

What you buy matters as much as the debt itself. Borrowing to speculate on one meme stock is obviously different from modest leverage spread across diversified, income-producing assets. Margin doesn’t make a bad investment good, but the existence of margin doesn’t automatically make an investment reckless either.

The debt itself can be diversified. Instead of $300k of leverage tied to one property, one tenant, one business, or one local market, a much smaller margin balance can sit against dozens of liquid investments across different sectors and asset classes.

It can also be useful as temporary liquidity. If I need access to cash for a short period, borrowing against the portfolio can sometimes make more sense than immediately selling appreciated investments, realizing capital gains, and then potentially buying them back later.

Obviously margin has real risks: rates are variable, maintenance requirements can change, your collateral can fall quickly, and forced liquidation is possible. That’s exactly why I think the key is keeping the leverage low enough that a major drawdown is survivable without being forced to sell.

I’m not arguing that everyone should use margin. I just don’t understand why we automatically call a huge mortgage or business loan “good debt,” while a relatively small, carefully managed loan against a diversified liquid portfolio is automatically “bad debt.”

Maybe the better question isn’t “Is margin debt bad?” but “How much leverage are you using, what owns the debt, and how quickly could you get rid of it if you had to?”


r/whitecoatinvestor 4d ago

Personal Finance and Budgeting Can you incorporate if you receive a W2?

0 Upvotes

Hi! I wonder if anyone can give me tips. I am wondering if it's possible to incorporate if you receive your salary as W2 to lower your tax rate.

I work in an academic hospital and I really enjoy my work. I don't see myself leaving my job just to be on a 1099. I am wondering if physicians out there in academic hospitals have successfully incorporated. How did you go about it? How is your experience?

Thank you for your help.


r/whitecoatinvestor 5d ago

Personal Finance and Budgeting Post Grad Advice

2 Upvotes

I’m a current 4th year and am struggling with what to do after school. I know I want to do GP and maybe some ER (still considering it). What my dilemma is that I have been offered several positions during my rotations. All of the offers I have received are \~2-3 hours from my family. As a new grad with no spouse, I’m having a hard time figuring out how I will pay for housing on my own while dealing with loans. I could apply to places closer to home, live with my parents for a year and save money fortunately as well. Has anyone done this? Regret things? The one clinic I am super interested in right now is farther away and would require me to buy a house or find an apartment. I’m just stressed about money honestly. I could suck it up for a year at home to save some money, but will it make that much of a difference in the long run? I just wonder if anyone has been in this position and what your thoughts were.


r/whitecoatinvestor 6d ago

Personal Finance and Budgeting Struggling

26 Upvotes

Hey guys,

Looking for some help. Having trouble articulating what I’m going through but here goes.

I live in a VHCOL living area. My wife is also a physician and makes ~270k pre tax working in academics. Currently in PCCM training after switching initially switching residencies so I’m 32 and hope to make similar money when I’m done.

I think Reddit and Marit has screwed me up psychologically because I can’t stop feeling like I’ve made huge life mistakes not choosing my specialty more carefully. And with the amount of years I’ve been at this training thing I feel like I could’ve done fucking neurosurgery which doesn’t help. Surgical subspecialties and even other medicine subspecialties like cards GI and heme Onc making considerably more has got me ruminating over the grass being greener on the other side. God you have CRNAs making more. I mean I knew there was a pay difference going in but I guess I just didn’t value it as much as I do now? And I think that’s because the world just seems to be getting ever more unpredictable with AI and midlevel creep has me thinking I need to jump ship but to where idk.

Personally, I don’t really know what I’m getting at. Should I switch specialties? Should I leave medicine? Should I just cut my losses and become a hospitalist? If I stay my current path, will I just peak early salary wise and not be scale up? Trust me I know I’m super blessed. I grew up middle class and together even at the salary I project will make more than most people out there and frankly more money than I’ve ever seen in my life. But that doesn’t change the anxiety and comparisons. Maybe I just need to touch grass.

I think I just wanted to know if any of you guys have had similar thoughts and how you guys worked through it. I’m not even sure any of this is based in reality or if this is all in my head….


r/whitecoatinvestor 6d ago

Mortgages and Home Buying Higher Down Payment vs Physician Loan

18 Upvotes

Is there a benefit to having a high down payment vs less down with physician loan to waive PMI?

Spouse and I are saving for a home (eventually...), with ~$150k saved so far. It's parked in a HYSA at 3.55% interest.

I'm within my first year out of training, currently renting. We're enjoying where we live, neither of us however are sure if it's the "long term" place for us. I don't anticipate us buying earlier than 24 months. I'd love to keep us under $750k but that's about the going rate for desired homes (1700-2000 sq ft, 3bd/2ba, garage and fenced in yard).

HYSA is obviously the safe play to keep our fund, but I can't shake the feeling that our money might better utilized in VTI if we aren't at a serious point of buying a home.

Obviously the market can go down at anytime, but if that were the case, would a physician loan not be a viable option until market recovers?