Sticking with your money plan

James M. Dahle, M.D., FACEP, founder of The White Coat Investor

From market-jolting tariffs to pandemic aftershocks, economic uncertainty is rattling physician portfolios — and nerves. To help doctors keep their financial footing, Medical Economics sat down with James M. Dahle, M.D., FACEP, emergency physician and founder of the White Coat Investor, for some insights.

Dahle built his reputation translating Wall Street jargon into straight talk for clinicians, and in this conversation, he explains why panic selling rarely pays, how a disciplined plan outlasts every downturn, and why mastering money can be an antidote to burnout. Read on for his candid guidance for today’s busy physicians about income, advisers and avoiding costly missteps. The transcript below was edited for length and clarity.

Medical Economics: The big stock market news in recent months has been about tariffs and market volatility. I imagine when historic events impact the market and investments, you get a ton of questions from physicians about how they should handle their portfolios. How do you think through these things when it comes to your investments, and do you have any thoughts for your fellow physicians on how to approach this?

James M. Dahle, M.D., FACEP: The problem is, everyone thinks this time it's different, and they're right in one way. Every time it is different. Last time it was a pandemic, and then it was that rates went up 4% in one year, and now it’s tariffs. Sometimes it's a banking problem, such as in 2008 when the banks got way too liberal with their lending. Or maybe it's a tech bust, such as in 2000, or maybe it's tulip bulbs in 1600 Holland.

Those of us who have read enough [about] financial history look at something like this and go, “I've seen this movie before, and I know how it ends.” The truth is, it's not different this time. Markets are very resilient. They will recover. It might be in a month, like in 2020, or it might be in three years, like it was in 2000 to 2002, or it might be a decade, like it was in the 1930s. But markets are resilient, and they're going to recover.

Barring a functional crystal ball, your best bet is to have a reasonable investing plan and stick with it through thick and thin. … I acknowledge that it's painful to lose money, but to be a good long-term investor, you have to get used to losing money from time to time. In the long run, the likelihood of the market not producing solid returns for you over the 30, 40, or 50 years you need it to do so is very low.

Medical Economics: We hear a lot about physician burnout. Do you think that financial stress and money issues contribute to it?

James M. Dahle, M.D., FACEP: Rather than [them] being contributing causes, I view finances and financial planning as the way out of all of those problems. Having your financial ducks in a row allows you to leave a toxic job. It allows you to leave the profession completely. It allows you to do some of the things that increase your longevity and resilience. The first thing I say when I run into a burned-out doctor is, “Have you thought about cutting back from full time?” I think cutting back and going part time and seeing fewer patients per hour, and doing fewer procedures — these are all things that having your financial ducks in a row allow you to do. It also allows you to make a career-lengthening decision when you have these career choices to make.

Medical Economics: Primary care physicians often earn less than specialists. What advice would you give primary care physicians to help them stay on track toward financial independence despite smaller margins?

James M. Dahle, M.D., FACEP: Sure, on average, a primary doctor makes less than a specialist. Everybody's seen those charts, right? What nobody ever talks about is the intraspecialty pay difference; the delta there is dramatically larger than the delta between those specialties. I have met pediatricians with seven-figure incomes. I have met family doctors with seven-figure incomes. It is possible to make more money despite being in a [so-called] lower-paid specialty.

I would encourage people to work on step one, which is boosting your income. Make sure you're getting paid fairly. So many doctors out there are being paid less than average, right? Half of them, by definition, are being paid less than average. And unless your job is easier than average, I don't know why you would settle for that. Make sure you know what you're worth. Negotiate what you're worth. If you're running your own practice, make sure you're doing everything you can to make it efficient and have good employees. Make sure you're using your time only for what only you can do and those sorts of things to [increase] your income. I think that's within reach for the majority of the primary physicians out there.

Medical Economics: How important is it for physicians to seek professional financial advice, and what qualities should they look for in a financial adviser or planner?

James M. Dahle, M.D., FACEP: If you're looking for a financial planner, you want someone who has done a bunch of financial planning for doctors. You want them to have a fiduciary duty to you, meaning they are legally required to do what's right for your pocketbook, even if it's not right for their pocketbook. You want them to be fee only. You don't want them earning commissions on crummy investments or crummy insurance products [that they sold you]. You want them to be talking about the same sorts of investments that the good academic studies show we should be investing in, which are, primarily, index mutual funds. It's worth doing some interviewing, asking some questions and talking to the people you know who are really good with money.

Medical Economics: What are some common pitfalls you see physicians encounter with their personal finances, and how can they avoid them?

James M. Dahle, M.D., FACEP: It sounds stupid to even have to say this, but it’s that they spend all their money. The biggest problem is that people don't put enough money into their investing accounts. They're not saving enough. I recommend 20% of your gross income toward retirement. And if you do that, you can screw up just about everything else. Other mistakes that people commonly make: They mistake a salesperson for a financial adviser. There are lots of salespeople out there who call themselves financial advisers and try to take advantage of doctors. In reality, they're selling you annuities you don't need, or whole life insurance [policies] you don't need, or particularly expensive, poorly performing, loaded mutual funds you don't need. You’ve got to make peace with the financial services industry.

Another thing people do is, they get into crazy investing strategies. They start picking their stocks, even though the academic data out there suggests [it is] a terrible idea for you to pretend you're a hedge fund or a mutual fund manager. You should just be buying them all with an ultralow-cost index fund. Sometimes people try to time the market, and they end up buying high and selling low repeatedly, over and over and over and just erasing a whole bunch of their wealth.

Of course, there's the big risk for lots of people, and that's divorce. When you get divorced, you cut your assets in half, and you cut your income in half for a number of years, and it's hard to build wealth once you've done that two or three times. It turns out the best asset protection move isn't trying to keep your patients from suing you. It's going out on date nights with your spouse.