MtoM #213: Resident Acquires a Six Month Emergency Fund and Finance 101: Two Doc Households

Summary

White Coat Investor Podcast: Milestones to Millionaire #213

Episode Title: Resident Acquires a Six Month Emergency Fund and Finance 101: Two Doc Households
Host: Dr. Jim Dahle
Guest: Cameron, Internal Medicine Resident
Release Date: March 10, 2025

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Introduction

In episode #213 of the Milestones to Millionaire series, Dr. Jim Dahle welcomes Cameron, a second-year internal medicine resident from the Northwest, who has achieved the significant milestone of establishing a six-month emergency fund. This episode delves into Cameron's financial journey, strategies for managing student loans, investment practices, and provides insights into navigating finances as a dual physician household.

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Celebrating Financial Milestones

Timestamp: [04:02]

Dr. Dahle begins the episode by celebrating Cameron's accomplishment of fully funding a six-month emergency fund—an impressive feat, especially for a resident. He notes, “We run the whole gamut here in the White Coat Investor community, hopefully all moving forward on our own individual pathway” ([03:36]).

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Cameron's Financial Journey

Timestamp: [03:36 – 17:38]

Personal and Housing Situation

• Relationship Status: In a relationship, living with his girlfriend, no children.
• Housing: Transitioned from a high-rent one-bedroom apartment ($2,500/month) during intern year to a more affordable two-bedroom setup ($1,000 each) further out ([04:16]).

Emergency Fund Details

• Amount: Six months of expenses, totaling approximately $18,000 to $20,000.
• Storage: Placed in a high-yield savings account with Wealthfront, facilitating easy access ([05:54]).

Notable Quote:
“I just wanted to more or less challenge myself a little bit, I guess, and see if I could actually do six months and do what the average, you know, person in America is, quote, unquote, like, recommended to do.” – Cameron ([05:18])

Net Worth and Student Loans

• Net Worth: Approximately negative $200,000 when accounting for student loans; around $35,000 excluding loans and including savings and investments ([06:59]).
• Student Loans: Graduated with roughly $225,000 in loans, which have slightly increased to $235,000 ([07:49]).

Notable Quote:
“I grew up in a low middle class family, family of four, had bankruptcy issues near the crash and all that stuff. So I kind of already grew up thinking a little bit more careful about finances.” – Cameron ([08:23])

Loan Management and Repayment Plans

• Strategy: Intends to pursue the Public Service Loan Forgiveness (PSLF) plan, leveraging residency status for favorable repayment terms.
• Current Status: Loans are in deferment during residency, with plans to switch to a repayment plan that will contribute towards forgiveness ([09:58]).

Notable Quote:
“Life and everything around you can be fun and meaningful without having to spend tons of money is very possible.” – Cameron ([15:24])

Investment and Savings Practices

• Accounts:
  • Roth IRA: Personal account with approximately $9,000.
  • 457B: Program-associated account; contributes 3% annually, totaling around $2,000.
  • 403B Roth: Approximately $2,000.
• Savings Rate: Maintains a 35% savings rate, emphasizing early investment to leverage compound interest ([11:55]).

Notable Quote:
“The money you save when you're 55 doesn't get nearly as many compounding cycles as this money is going to get.” – Dr. Jim Dahle ([11:56])

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Finance 101: Two Doc Households

Timestamp: [17:38 – 34:05]

Dr. Dahle shifts focus to the financial dynamics of dual physician households, inspired by an email from a couple transitioning from training to attending roles.

Advantages of Dual Incomes

• Increased Earnings: Dual incomes significantly boost financial potential, enabling faster debt repayment and wealth accumulation.
• Example: With both partners earning approximately $363,000 combined, they can potentially achieve millionaire status within a decade by maintaining disciplined savings and loan repayments.

Notable Quote:
“Imagine you're living like a resident, right? Residents are making 60, $75,000 a year. Even if you give yourself a big raise coming out of residency and you're living on $100,000, let's say you're paying $250,000 in taxes. That still leaves you $400,000 a year that you can use to build wealth.” – Dr. Jim Dahle ([23:45])

Challenges and Strategies

• Tax Implications: Dual incomes can place couples in higher tax brackets, necessitating strategic tax planning.
• Student Loans: Couples may face substantial combined student debt, requiring careful management and possibly professional advice.
• Insurance Needs:
  • Disability Insurance: Essential to protect against loss of income from unforeseen circumstances.
  • Life Insurance: Varies based on family needs; couples with and without children will require different coverage strategies.
• Career Planning: Balancing career opportunities may require compromises, such as relocating or one partner taking on locum tenens positions to accommodate both careers.

Notable Quotes:

• “The tax code is what it is. There are some benefits to being married, there's some benefits to being single. I wouldn't necessarily let the tax tail wag your life.” – Dr. Jim Dahle ([29:15])
• “Dual income does not mean dual income forever. It might only be dual income for a year or two.” – Dr. Jim Dahle ([30:05])

Insurance and Risk Management

• Disability Insurance:
  “Maybe it's better to have something in place that you can take with you in the event something happens to the marriage.” – Dr. Jim Dahle ([28:35])
• Life Insurance Considerations:
  “If there are no children, if you got enough assets to bury yourself and your spouse is going to be fine without your income, you don't need life insurance.” – Dr. Jim Dahle ([30:20])

Retirement and Investment Opportunities

• Multiple Retirement Accounts:
  “With a dual income, you have more retirement accounts—Roth IRAs, 401(k)s, 403(b)s, 457(b)s—which can significantly enhance your retirement savings strategy.” – Dr. Jim Dahle ([32:10])
• Optimizing Benefits:
  Couples can maximize employer-provided benefits by selecting the best plans from both partners, potentially increasing overall financial security.

Tax Benefits and Considerations

• Married Filing Jointly:
  Contrary to popular belief, marriage doesn’t always incur a tax penalty.
  “When you make a lot of money, you got to pay a lot of taxes. But you can do a lot with that.” – Dr. Jim Dahle ([24:30])

Practical Advice for Dual Doc Couples

• Professional Financial Advice:
  “Meeting with Andrew and paying 500 or 600 bucks for student loan advice seems like a very good investment.” – Dr. Jim Dahle ([32:50])
• Cost Management:
  Utilize the higher combined income to outsource household tasks, which is cost-effective given their earnings.

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Conclusion and Final Thoughts

Timestamp: [34:05]

Dr. Dahle commends Cameron on his financial discipline and highlights the potential for financial success when combining intentional financial management with a physician’s income. He underscores the value of early savings and strategic planning, especially for dual-income households.

Final Notable Quote:
“Keep your head up and shoulders back. You've got this.” – Dr. Jim Dahle ([34:05])

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Key Takeaways

• Emergency Funds: Essential for financial security, even during the demanding residency years.
• Student Loan Management: Utilizing forgiveness programs and professional advice can significantly reduce financial burdens.
• Early Investment: Leveraging compound interest by starting investments early can lead to substantial wealth accumulation.
• Dual Income Strategies: Maximizing the benefits of dual physician incomes requires strategic planning in taxes, insurance, and loan management.
• Lifestyle Balance: Maintaining a balance between personal satisfaction and financial goals is crucial for long-term financial health.

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Resources Mentioned

• High-Yield Savings Account: Wealthfront
• Student Loan Advice: studentloanadvice.com
• Website: whitecoatinvestor.com

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Disclaimer

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.

Transcript

[Cameron]

This is the White Coat Investor Podcast Milestones to Millionaire Celebrating stories of success along the journey to financial freedom.

[Dr. Jim Dahle]

This is Milestones Millionaire podcast number 213 resident acquires a six month emergency fund with Weatherby Healthcare. You choose your own healthcare career path. Our Locums experts then support you every step of the way, helping you find the right opportunities at the right time. We understand your professional and personal goals and are experts at helping you achieve them. Let's keep your career interesting with new locations and settings and diverse patients and cases. And just as importantly, let's make sure you get more time for your hobbies or to just relax. We'll help you find that balance with more jobs and more locations. Weatherby gets you where you Want to go. Whitecoatinvestor.com Weatherby to learn more, let's talk for a few minutes about taxes and tax prep. It's March as you're listening this and lots of people are doing their taxes now or about or maybe recently finished them. And for many docs, particularly employees, your tax situation can be very straightforward. And I think it's pretty cool actually, especially in the beginning of your career, to learn how to file your own taxes. Whether you're doing it by hand or using software, you can use something like TurboTax or a similar program to do your own taxes, and you only have to learn the parts of the tax code that are relevant to you. In my experience, that meant learning about one new form a year. For many years, I did my own taxes. For those, however, who desire professional help, there are two sides of tax aid. There's tax preparation, which is the actual filing of the forms, and there's tax strategizing, which is the planning in advance to lower your tax bill. And we've tried to revamp our Tax Professional page in a way that we can provide both of these services to white coat investors. Tax Strategists they are not as cheap as tax preparers. In fact, they're often dramatically more expensive, but may still be very much worth the cost. Depending on Especially if you have a complicated tax situation and need help putting in retirement accounts and those sorts of things into your practice, it may be very well worth hiring a tax strategist. Others they just want someone to help prepare their taxes, and maybe they have a question or two about their tax life and don't necessarily need the services of a a comprehensive tax strategist. We've got both of those people on our recommended list. You can go to whitecoatinvestor.com under the recommended tab and check those folks out. Or you can go directly to whitecoatinvestor.com tax strategists, and that'll get you directly to that page. And you can check out whatever you need for your tax situation. All right, we have a great interview today with a resident. And. And I love talking to multi deca millionaires, and I love talking to people with negative net worth on this podcast. We run the whole gamut here in the white coat investor community, hopefully all moving forward on our own individual pathway rather than moving from multi deca millionaires to negative net worth. But we've all been there, right? Most of us started out our careers with a dramatically negative net worth. And so let's hear how this doc has been sorting it out in the first year or so out of medical school and then stick around afterward. And we're gonna talk for a few minutes about two physician or two professional households. Our guest today on the Milestones to Millionaire podcast is Cameron. Cameron, welcome to the podcast.

[Cameron]

Hi there. Nice to meet you.

[Dr. Jim Dahle]

Tell us what you do for a living, what part of the country you're in and kind of where you're at in your career.

[Cameron]

Yeah, so I'm an internal medicine resident up in the Northwest, and I'm in my second year and hopefully going into cardiology, applying later this academic year.

[Dr. Jim Dahle]

Awesome. That's exciting. All right, what milestone are we celebrating today with you?

[Cameron]

Yeah, so we're celebrating a fully funded emergency fund, around six months as a resident, which notoriously is pretty hard, but I think is actually a pretty reasonable one.

[Dr. Jim Dahle]

Yeah, very cool. And are you single, married, kids? What's your situation?

[Cameron]

Yeah, I'm in a relationship with my girlfriend. We live together currently and no kids.

[Dr. Jim Dahle]

Okay. And renting? Owning. What's your housing situation look like?

[Cameron]

Yeah. So intern year, I'll get into this a little bit later, but intern year I was in a one bedroom, one bath for like, pretty high rent, around $2,500. Now we are a little bit further out paying about $1,000 each for two bed, two bath.

[Dr. Jim Dahle]

Very nice. And. Okay, well, it's the classic drive till you qualify. Right. The further away you're willing to be, the cheaper rent or mortgages tend to get. Yep. Okay, so now I'm assuming that you're managing finances separately at this point. Is that the case?

[Cameron]

That is correct, yes.

[Dr. Jim Dahle]

Okay, so this is your emergency fund. You have a six month emergency fund of six months of your expenses.

[Cameron]

Yep.

[Dr. Jim Dahle]

How did you decide on six months?

[Cameron]

I mean, I think it was more just like, you know, you Go online to read, like, what is a safe emergency fund? And for people outside of medicine, the general wisdom is around six months. From what I've heard in medicine or in residency specifically, there's a little bit more job security and things like that. I've heard anywhere from like two to three months is reasonable. But I just wanted to more or less, you know, challenge myself a little bit, I guess, and see if I could actually do, you know, six months and do what the average, you know, person in America is, quote, unquote, like, recommended to do.

[Dr. Jim Dahle]

Very cool. Now, where is your emergency fund? I mean, is this a stack of 1/ hundreds you have in your bedside table or what are we talking about?

[Cameron]

It's in a high yield savings account that I have, like, associated with my checking account. So I have my checking account, and then the savings associated with that I can easily transfer back and forth as needed.

[Dr. Jim Dahle]

What bank did you choose to use for that high yield savings account?

[Cameron]

I ended up using Wealthfront. They had a pretty decent high yield savings rate like a year ago. Obviously it's a little bit lower, but it's still pretty decent.

[Dr. Jim Dahle]

Yeah, very cool. So how long, if you needed to turn that into cash, cash in your hand, how long would it take you to have the cash in your hand?

[Cameron]

I'd say probably, I don't know, it's under a week easily, probably a couple days, if that, because I could transfer it to a checking and then go to the local bank and pull that out.

[Dr. Jim Dahle]

Okay, well, let's talk about your finances in general. If you had to estimate your net worth as a resident, approximately, what would it be?

[Cameron]

Yeah, if I am not acknowledging the loans, it'd be, well, we gotta acknowledge the loans. I will. So with loans, it's around negative 200,000. Without loans and just acknowledging investments, assets and savings, it's around 35,000.

[Dr. Jim Dahle]

Very cool. Well done. That's pretty awesome. For only. I mean, as we're recording, this is February of 2025, and so you've been in residency for a year and a half or so at this point, and you've already accumulated $35,000. I assume you didn't bring any of that out of medical school.

[Cameron]

I had maybe like a couple, like maybe 2,3000 coming out. After paying for all the moving and everything, all those expenses, just leftover loan.

[Dr. Jim Dahle]

Money for med school, basically. Yeah. Yeah. Okay. And what did you graduate owing? How much did you owe when you came out?

[Cameron]

So I want to say it was around 225. And then roughly it's around like 235 now.

[Dr. Jim Dahle]

Okay, well, that's pretty good actually.

[Cameron]

Yeah.

[Dr. Jim Dahle]

How did you keep it down that low? I mean, I guess the average right now if we look at the surveys from the AAMC, they'll tell us the average for an MD school is like 205. And for a DO school like 240, 250 and dentists, 275 or 300. But 225 sounds really low to me based on all the doctors I'm talking to. So did you borrow the entire cost of your education?

[Cameron]

Yeah. So small context is I grew up in a low middle class family, family of four, had bankruptcy issues near the crash and all that stuff. So I kind of already grew up thinking a little bit more careful about finances growing up. And so in college or, sorry, in high school, I intentionally chose a state school that was roughly around $7,000 a year for just tuition. And you know, I got merit based scholarships to, you know, fund and I was like on a full ride for the last two years.

[Dr. Jim Dahle]

Like, like lots of people smart enough to get into medical school. Undergraduate was well subsidized by merit scholarships. Okay.

[Cameron]

Yeah. And I came out with only a few, like maybe two, $3,000 in loans for that. No significant family health.

[Dr. Jim Dahle]

You did better than I did. I came out with five, so.

[Cameron]

And then I intentionally applied to only two schools for med school just because I was like kind of taking, potentially going to take a gap year, but also just applying to see if it was going to happen. And between the do and the MD school that I applied per year, the MD school was around $40,000 cheaper, everything included. I think tuition was probably close to 60 at the D.O. school and around in the mid-30s for the MD.

[Dr. Jim Dahle]

And you got in there to the MD school?

[Cameron]

Yeah, yeah.

[Dr. Jim Dahle]

Very cool. So relatively inexpensive school and add some living expenses on top of it and you come out with 225. So what's your student loan plan? What are you doing with your student loans and what do you expect to do with them going forward?

[Cameron]

Yeah, good question. I know the whole safe plan is all up in the air and there's a lot of questions to continue to ask going forward. I think I still am very likely going to do the public student loan forgiveness plan, whatever repayment plan that they have in place. There's a financial person that's associated with our program, thankfully, and working through it with him to try and figure out when I can reinitiate those, those payments that count to the 120 given that I'm going to be in residency because I want to do adult congenital cardiology. And that's roughly around eight, nine years.

[Dr. Jim Dahle]

Oh yeah. You mean you're going to make 10 years of payments before you ever get out of training the way you're headed?

[Cameron]

Exactly. So it's just like, well, might as well, you know, like only one year of an attending like income paying that much. It's, it's totally reasonable.

[Dr. Jim Dahle]

Yeah.

[Cameron]

So still working on it. Essentially. Everything's obviously in like deferment, but at some point, hopefully in the next month or two, I can switch over to a different payment plan.

[Dr. Jim Dahle]

Now you mentioned you had something like $35,000. I assume pretty big chunk of that is this six month emergency fund.

[Cameron]

Yeah.

[Dr. Jim Dahle]

What else have you done with your money?

[Cameron]

Yeah, So I did six months, so two and a half to 2.8 thousand per month coming into roughly 18 to 20,000. I've since surpassed that since I applied. And then the other 15,000 is kind of a mixture of my own personal Roth IRA. My program's 457B, which automatically gets 3% per year. So around 2000. And that my personal Roth has around 9000, a little over. And then I also have a 403B Roth that has almost $2,000, I think.

[Dr. Jim Dahle]

Very cool. Right at the beginning, man. It's all so exciting.

[Cameron]

It is, yes.

[Dr. Jim Dahle]

Yeah. This is the money that's going to have the longest period of time to compound though in your career. Right. I mean, the money you save when you're 55 doesn't get nearly as many compounding cycles as this money is going to get. So it's pretty exciting.

[Cameron]

I just really wanted to get the ball rolling on a lot of that because that's like the number one thing you hear is like time is the most important thing and not making income at all. You can't contribute to a Roth. And there's just. Or maybe there is. I just didn't know a certain way or I didn't have really the income to do it. So that was one of the most important things I really wanted to initiate at some point.

[Dr. Jim Dahle]

Yeah, very cool. Well, I mean, your income, you're a typical resident, right? Your income is what, 60, 65,000, something like that?

[Cameron]

Well, so acknowledgement is I am in a unionized residency, so there are some benefits with that. Obviously. The biggest one is with a housing stipend and our salary, I make roughly around 75.

[Dr. Jim Dahle]

Oh, wow. That's pretty good.

[Cameron]

Yeah, so it is very helpful in that regard, but it is Also in a pretty high cost of living city.

[Dr. Jim Dahle]

As well, but even so, with you making 75. So in the last year and a half or so, you've made 100 or $125,000 or something, and you've still 35,000 of it, which is pretty awesome savings rate for a resident. I'm impressed.

[Cameron]

Yeah. After tax and everything, it's like I've made 55,000 as of, like, in the last, like 12 months. 55,000. And I've only spent 35 of it.

[Dr. Jim Dahle]

Very cool. So other than getting into a cardiology fellowship, what's next in your financial goals?

[Cameron]

Yeah, so now that I'm. So I have like a savings rate of like 35%, and it's kind of. I don't want to say excessive, because it's still, like, good to still work on that. My initial plan was like, start saving for an unspecified down payment for something or just extra cash. And now I'm like, well, I probably should at least increase my 403 contribution and re. Initiate more, you know, into my Roth ira, just given that, you know, this money is not going to be doing a whole lot otherwise. And so very likely that. But I don't anticipate I'll be like, purchasing a house or a car or anything like that anytime soon.

[Dr. Jim Dahle]

So you say an unspecified down payment. I'm like, on a boat. What are you going to buy? Usually the goal comes before the down payment.

[Cameron]

Usually, yeah. I don't know. I don't really necessarily have a whole lot of, I guess, wants per se. And so I imagine it might be for five, 10 years down the road when I might be more interested in purchasing a house. But as of right now, I mean, it makes a lot more sense to rent and have the current situation that we have right now.

[Dr. Jim Dahle]

Yeah, for sure. Yeah. It's exciting. And cash is helpful. There's no doubt about it. And the nice thing these days is you can make 4% on your cash. So it's not like just a few years ago when cash basically paid nothing.

[Cameron]

Exactly.

[Dr. Jim Dahle]

And you always felt like you had a big cash drag on your. On your money when you didn't have it invested. All right, there's somebody out there that's a year and a half behind you. They're just coming out of med school and they owe 200 or 300 or $400,000 in student loans, and they got $1,000 left over of their student loans that they're going to residency with. How can they be like you in a year and A half.

[Cameron]

So I think for me, it really comes down a lot to lifestyle finances intermixing with that. So in residency in med school, you have this concept of delaying gratification. And with that, there's like, a implication that you might not be satisfied with your current lifestyle or how you're currently living. And I think that phrase can maybe, you know, predispose you to maybe a little bit more of a negative mindset, in my opinion. And just the understanding that life and everything around you can be fun and meaningful without having to spend tons of money is very possible. And it's like a fine balance of treating yourself for working hard and being in this rat race to finding meaning and comfort without those treats. Maybe there's also the other side. You shouldn't feel guilty for spending what you do, but just being very, very mindful and what things truly bring you value. So for me, I'm really big into the outdoors. Hiking, things like that, playing piano, going to the gym, cooking food. Those things bring me so much meaning and quality time with my partner. But those things bring me so much joy. It's like I can go onto Amazon and scroll, but I don't necessarily need anything. I'm very happy with how things are right now for me. So it's just a simple mindset shift, I think, has been the most helpful for me. And with that, you can do quite a lot.

[Dr. Jim Dahle]

Well, Cameron, congratulations on your success. You're doing great. Yes, you're coming here with an earlier milestone than many of the people that have been on this podcast, but it's not going to be that long before you're ticking off all the other ones. I can tell you've got a good head on your shoulders. You're becoming financially literate and. And managing your finances intentionally. And when you combine that with a physician income, whether that's an internist income or a cardiologist income, great things happen in not that long of a time. So congratulations to you and thank you for coming on to inspire others to do the same as you've done. Of course.

[Cameron]

Thank you. Appreciate it. Okay.

[Dr. Jim Dahle]

I hope you enjoyed that. You know, I love talking to residents right in the beginning, residency was actually my favorite job ever. I loved being a resident. I mean, yeah, stunk what it did to the rest of my life. I basically put a whole bunch of relationships and hobbies on hold for three years. But I loved the job. I loved learning. I loved new stuff every day. I loved seeing how the other half of society lived. I loved finally being able to use what I'D spent eight years studying. It was great. I loved residency, but it was hard. It's a hard time and it's financially not that easy, especially when you have a negative net worth. All right, I promised you at the beginning we're going to talk about two doc households. I got an email recently said my wife and I in the past three years have gone from both being in training to an attending and a trainee to now two attendings. I know. Dr. Curtis, one of our columnists here at the White Coat Investor, has previously written a blog post on this which we read. And we have your current blog post probably old by the time you get around to this email, which I read as well in the past few days. I think it would be helpful for those of us who are in dual physician couples to have a podcast episode where you get questions asked from physician couples and have maybe an early career and a later career couple discussions. I think it's about 15% of docs now are married to another doc, let alone another high income professional. I know you always say 90% of personal finance is applicable regardless, but some of the idiosyncrasies may make for an entertaining podcast for me and I imagine others to listen to. No question that needs to be answered. Just the thought of something I thought might add value. Well, often on this Milestones podcast we get both members of a couple and I think that's really helpful to really talk about what their challenges are, what their successes are, what they're working on. And so we try to include when you want to bring your spouse on or your partner on to the Milestones to Millionaire podcast. We try to bring you on and we think that's great. But I don't know that I can round up a whole bunch of you to come on and talk about two doc couple situations. So let's talk about some of the things that come in when we're talking about this stuff. So I replied back to this doc and I said, well, what's different for you? What do you think we really need to cover on this topic? And this is what he wrote back. He said, I think the biggest things that were different for us were more the idea of going through the job selection process and looking into career options as two subspecialists. That being said, I think the blog post covered things quite well. Mostly different was our decision making on life insurance. We chose a smaller amount each and a shorter term loans. I paid mine off during residency and now timing on children, waiting until we're attending to consider it played into our financial lives. I also don't know what the crossover is from the podcast and the blogs. I would guess the blog tends to run older in the audience, while the podcast is more of the current med students, so don't know how many of them would have heard about it. Anyway, it goes on. Yeah, I don't know that that's actually the case. Podcast listeners are not necessarily blog readers. We've definitely learned that over time. But I don't know that one audience skews older or younger. The only real skew we've noticed is in the white coat investor community is older docs tend to be on Facebook and younger docs tend to be on Reddit. That's definitely a trend we've noticed, but otherwise, I don't know. The podcast skews particularly old or young. I think you guys are a pretty good swath of white coat investors. Okay, dual income. What's different? Well, first of all, it's mostly good to have two incomes, right? You got this big, huge shovel, right? If the average doc these days is making something like. I think it's something like $363,000, something like that is the average. It's there in the upper three hundreds. Well, that means now you've got an income. If there's two of you and you're just average, you've now got a $700,000 or $750,000 income that's well into the top tax bracket. That's a lot of money. Yeah, you're going to pay a huge tax bill each year. Newsflash. When you make a lot of money, you got to pay a lot of taxes. But you can do a lot with $750,000 a year. Imagine you're living like a resident, right? Residents are making 60, $75,000 a year. Even if you give yourself a big raise coming out of residency and you're living on $100,000, let's say you're paying $250,000 in taxes. That still leaves you $400,000 a year that you can use to build wealth. And you can do a lot with that. I mean, let's say you both owe $400,000 in student loans gone in two years, right? It's pretty awesome to have that sort of a shovel. Let's say you want to become millionaires as fast as you can. Well, shoot. How many years is that going to take? You know, you wipe out your student loans in the first year or two, and three years after that, four years after that, you're Millionaires. I mean, if you really keep your spending down, you could easily be financially independent within a decade of coming out of school on a two physician income. So that's a lot of power to have that big shovel. And almost any problem you encounter because of your dual income status can be managed with that bigger shovel, right? I mean, what often happens, you get a family, you're running a household, whatever. There's a whole bunch of things that nobody has time for because you're both working 60 hours a week, right? And so you got to hire those out. You got to hire somebody to clear the driveway, you got to hire somebody to mow the lawn, you got to hire somebody to clean the house, you got to hire somebody to, you know, watch the kids. You know, all this stuff, you got to hire out. But guess what? All of that costs a lot less than a physician gets paid. So you're still coming out way, way ahead. So take advantage of your bigger shovel. That's the huge advantage you have as a dual income couple is that dual income. Okay, so what else is unique? Well, you might have two sets of medical school loans. That's a problem, right? Instead of owing $200,000, now you owe $400,000 or $600,000 or $800,000. We have certainly run into couples. [e-mail] tells me all the time that he's seeing couples that owe a million dollars between the two of them. It's not that unusual, particularly if you don't manage your medical school costs or your dental school costs or the loans afterward. Very. If you're like a dental subspecialist or if you're both dental subspecialists, it's not that hard to get over a million dollars between the two of you. Now with the dual income. Can you knock that out? Yes, you can. But it's a bigger challenge for sure to owe a million dollars than to owe $200,000 in student loans. So you need to be very intentional about your student loan management plans. Meeting with Andrew and paying 500 or 600 bucks for student loan advice seems like a very good investment, especially if it results in hundreds of thousands of dollars in public service loan forgiveness that you wouldn't have gotten otherwise. So that's another issue. Okay? Insurance is different, right? Lots of people wonder, well, do I need disability insurance at all? Should I buy less insurance? Should we both buy full insurance? Right? Because here's the deal. When I came out of med school, and especially after my intern year when Katie started staying Home with our oldest, we had one income. Our family was very dependent on my physician income. And so we insured it. We got disability insurance on me enough that we could live some sort of a comfortable life on it if something happened to my ability to earn. But for lots of dual income couples, they're like, well, if one of us got disabled, we'd just live on the other one's income. And they decided not to buy disability insurance at all. They just viewed each other as their own disability insurance policy. Obviously some things can go wrong with that one. Maybe you're spending enough that you actually need both incomes, right? And so obviously things are going to be nicer if one of you gets disabled. There's still some income coming in from that person. And of course, if you are spending more than one income, that can be an issue that you don't have enough to meet your actual spending needs. So some people put a little bit of insurance on each person so they'd have something in the event that one of them got disabled. You can get divorced too, right? All of a sudden that income goes away when you get divorced. And now What? Now you're 45 and you got a medical problem and you can't get disability insurance? Well, that's a problem too. So maybe it's better to have something in place that you can take with you in the event something happens to the marriage. The other thing that often happens is one of you stops earning. Dual income does not mean dual income forever. It might only be dual income for a year or two. And maybe one of you wants to be a stay at home parent or something. Well, all of a sudden your dual income family just went to a single income family. Maybe just for a few years, maybe for the rest of your lives. And so you've got to look at your situation. What happens if one of you gets disabled? What happens if both of you get disabled? What happens if one of you gets disabled in five or 10 years, right? Think about all those things. And, and if the plan doesn't work without disability insurance, buy disability insurance until the plan works. Same issue with life insurance, right? If you don't have any kids, well, if your partner's a doctor, they're probably going to be fine without any life insurance. If you do have kids and you both get wiped out in a traffic accident or something, well, you're probably going to want to leave something for the kids. But is your need for life insurance as big as it was when Katie and I were a single income family with hardly anything in assets? Back in the 2000s. No, your need's not as big as ours. Could you get away without life insurance? You could. You probably could. Particularly if there are no children, if you got enough assets to bury yourself and your spouse is going to be fine without your income, you don't need life insurance. You don't have to own this stuff. Just because other families need it doesn't mean you need it. Okay, what else have we not talked about? Okay, there's career planning. This is a big issue for dual income people, right? They want to live in one town and one of them can get a good job there, but the other one can't. Well, now what? Well, do you go to a different town? Does one of you stop working? Does one of you commute? Does one of you start doing locums? There's all these options out there, but I think what generally happens is you end up having to go someplace else, someplace where both of your careers work. But that usually means some sort of a sacrifice. Somebody's making less than they otherwise could. Somebody has a job they don't like as much as a job, they could get somewhere else. That's just part of being married, right? That's just part of making a relationship work is you have to make some sacrifices and you have to make some compromises. And that includes with your careers when you're a dual doc couple. And so I don't think that's a news flash to anybody out there. But it's not an easy situation to deal with. And certainly if somebody wants to come on the podcast and talk about their successes as a dual income couple, we'd welcome you. We'll celebrate any milestone with you, and so we'll share some of the strategies maybe that you've learned doing that. Katie and I are now a dual income couple, I suppose, but we're not the classic dual income couple that most people think about when they think about dual doc couples. One thing that will be cool to know if you're in a dual physician couple is that your divorce rate is actually way lower than you might think it is. The typical divorce rate in the United States is 45 or 50%. If one of you is a doctor, that drops to about 25%. If you're both doctors, it drops to about 10%. You're actually much less likely to get divorced in a dual physician income household. I suspect that applies to other dual high income earners. And this is actually a lot more common, I understand from the statistics for women physicians to be married to another high earner than it is for men physicians to be married to another high earner. So there's some benefits there. Okay. Some other things that are unique about you. If you are in a dual physician couple, well, you don't need two doctor Houses. Right. One doctor house is enough. So you save a lot on your incomes. You're probably driving two Dr. Cars. Sure. And you're going on a Dr. Vacation, but you're not going to go on twice as many of them as you otherwise would. So your expenses actually may not be as bad as you might think. A one doctor couple and a two doctor couple may live pretty similar lives and you can save a lot of money. And so a lot of that second income can go toward wealth building activities. Okay. Taxes. You've heard of the married tax penalty. That's not really a married tax penalty. You actually get a benefit for being married. You get to use the higher married tax brackets. It's a benefit. There is a penalty for dual incomes. That's where the penalty is. If you're both working, then all of a sudden you may find that you're paying higher taxes and there's not a lot that you can do about that. The tax code is what it is. There are some benefits to being married, there's some benefits to being single. And I wouldn't necessarily let the tax tail wag your life. Some people are like, oh, we're not getting married because it would cost us more in taxes. Really. Come on, you're a dual income couple. You're going to have an awesome financial life either way. Don't let the financial issues behind marriage really make your decisions of how you're going to live your life. That's like deciding not to have kids because kids are really expensive and we're going to have to save for college for them. And well, you don't get kids for financial reasons. Right. You want them for other reasons. Same thing when you get married to somebody. Another great thing that's really cool about being a dual income couple is you get more retirement accounts. Right. Instead of just having your backdoor Roth and maybe your 401k at work. Well, now your spouse is over at the university and they got a 403 and a 457 and a 401A. Yes, it's going to be more complicated loan management or more complicated retirement account management, but you got all these great benefits and maybe some matches and a lot more options when it comes to saving for retirement and withdrawing from those accounts in retirement. So that's a good thing. Especially if one of your accounts isn't that good. Well, maybe you can prioritize the other person's accounts. Student loan management gets a lot more complicated. It is almost always worth paying for some specific student loan advice from somebody like studentloanadvice.com when you have two physicians, maybe one of them is going for PSLs and the other one isn't. And you're trying to figure out, well, how should we file taxes? What kind of retirement accounts should we use? Which IDR should we be in? This is a no brainer. Go spend 600 bucks. Both of you sit down. Right, you don't both pay. It's not $600 each, it's only $600 total to go in and talk with student loan advice about your student loan situation. So great benefit there. Another thing you can do when you both have separate jobs is you can really work the benefits. You don't need two health insurance policies for your family, one of them's fine. So figure out which one's best. Go on that one. And you don't have to pay the premiums on the other one. In fact, you might be able to negotiate, depending on the employer, partnership or whatever, you might be able to negotiate a higher salary for the person that's not using the insurance. And so work those benefits. You know, if there's one that offers really great disability coverage, we'll take advantage of that. If there's one that offers better retirement accounts, take advantage of that. Health insurance, you know, whatever, childcare, who knows what the benefits are from your employers. But you got two sets to pick from when there's two of you. Okay, I think that's about all I can think of that's applicable to dual income couples. But if there's a bunch of stuff I missed, well, shoot. Volunteer. Come on the podcast, tell us about how you've been successful as a dual income couple and we'll get into more of it. With Weatherby Healthcare, you choose your own healthcare career path. Our Locums experts then support you every step of the way, helping you find the right opportunities at the right times. We understand your professional and personal goals and are experts at helping you achieve them. Let's keep your career interesting with new locations and settings and diverse patients and cases. And just as importantly, let's make sure you get more free time for your hobbies or to just relax. We'll help you find that balance. With more jobs and more locations, Weatherby gets you where you want to go. Learn [e-mail] Weatherby if you want to be on the podcast, you can apply whitecoatinvestor.commilestones and then until then, we'll see you next week on the Milestone to Millionaire podcast. Keep your head up and shoulders back. You've got this.

[Cameron]

The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.