MtoM #225: Couple Leverages a Dental Practice to Reach Financial Independence in 9 Years and Finance 101: FIRE

Summary

White Coat Investor Podcast Summary

Episode Title: MtoM #225: Couple Leverages a Dental Practice to Reach Financial Independence in 9 Years and Finance 101: FIRE
Host: Dr. Jim Dahle
Release Date: June 2, 2025

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Introduction to Financial Independence Journey

In Milestones to Millionaire episode #225, Dr. Jim Dahle welcomes a remarkable couple who have achieved Financial Independence, Retire Early (FIRE) in just nine years since graduating from dental and business school in 2016. The couple, comprised of a practicing dentist and a business entrepreneur, share their inspiring journey from being debt-ridden graduates to reaching an impressive net worth of approximately $8 million.

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Journey from Debt to Financial Independence

Starting Point and Early Career:

• Initial Debt: Upon graduating in 2016, the couple faced substantial debt, with the dentist carrying $180,000 and the entrepreneur $120,000, totaling $300,000.

  • Jim Dahle (00:00): "We were pretty much flat broke. We didn't have any money, just a bunch of debt."

• Early Employment: The dentist worked as an associate in a dental practice, while the entrepreneur was employed at a big tech company. Their incomes were modest initially, with earnings starting around $250,000 annually and peaking at $975,000.

Building the Dental Practice:

• Entrepreneurial Shift: A pivotal moment came when the dentist decided to establish her own practice. The entrepreneur supported this transition, contributing to the business's growth.

  • Jim Dahle (04:14): "She dragged me into it a little bit. And then Covid also happened."

• Growth and Success: Over five years, they expanded the dental office into a mid to large-sized practice. In 2025, they partnered with a larger organization, receiving a substantial cash payout that significantly boosted their net worth.

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Financial Strategy and Wealth Accumulation

Income and Savings:

• Income Progression: Their annual income fluctuated from $250,000 to $975,000, primarily driven by the success of the dental practice and entrepreneurial ventures.

  • Anonymous Entrepreneur (08:31): "Our saving rate is about 80 to 90%."

• Saving Rate: The couple maintained an exceptional saving rate of 80-90%, translating to annual savings of approximately $144,000 to $145,000 against a modest annual expenditure of $8,000 to $12,000.

  • Jim Dahle (09:05): "Our saving rate is about 80 to 90%."

Investment Strategy:

• Asset Allocation: Their $8 million net worth is diversified as follows:
  • Cash and Savings: $600,000 in high-yield savings accounts.
  • Real Estate: $300,000 in home equity.
  • Investments: $6 million primarily in SPY (S&P 500 ETF).
  • Private Equity: $1 million in private stocks of other businesses.
    • Jim Dahle (07:42): "We have about 600k in cash... 6 million in investments... and a million in private stock for other businesses."

Lifestyle and Spending:

• Controlled Spending: The couple's disciplined approach to spending ensured that the majority of their income was directed towards savings and investments.

  • Anonymous Entrepreneur (09:21): "Our saving rate is about 80 to 90%."

• Minimal Lifestyle Inflation: Despite increasing incomes, they maintained their monthly expenses between $8,000 and $12,000, avoiding the common pitfall of lifestyle inflation.

  • Jim Dahle (09:33): "It's really hard to make a million dollars a year profit in a dental office... that really helped us not spend money as well."

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Achieving Financial Independence and Future Plans

Reaching FIRE:

• Declaration of Independence: The couple announced that they have achieved financial independence, allowing them the freedom to choose how they wish to spend their time without the necessity of work.
  • Anonymous Dentist (03:30): "We reached FIRE. We reached financial independence."

Future Financial Life:

• Plans Post-FIRE:

  • Dentist: Intends to take a break from practicing dentistry for a few years to focus on family.

    • Anonymous Entrepreneur (11:12): "My plan is to really just stay at home and take care of my child and another one on the way."

  • Entrepreneur: Wishes to continue contributing value by developing new products but at a slower pace.

    • Jim Dahle (11:36): "I really like putting things out into the world that give people a lot of value."

• Spending Outlook: While their investments generate substantial returns, they anticipate challenges in adjusting their spending habits to accommodate a higher budget without compromising their financial stability.

  • Jim Dahle (12:32): "The hardest thing is trying to learn how to spend more money and break those habits."

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Insights on FIRE from Dr. Jim Dahle

Post-interview, Dr. Dahle delves deeper into the principles of FIRE, providing valuable insights for listeners aspiring to achieve financial independence.

Defining FIRE:

• Financial Independence: The point where one’s investment returns sustain their living expenses.
• Retire Early: The act of ceasing full-time employment before the traditional retirement age, leveraging financial independence.

The 4% Rule and Calculation:

• Rule Explanation: To determine the target amount for financial independence, multiply annual expenses by 25. For instance:
  • Jim Dahle (16:17): "If you spend $100,000 a year, you need $2,500,000 to be financially independent."

Path to FIRE:

• Income and Savings Balance: Achieving FIRE rapidly depends on increasing income and maximizing savings rates.

  • Jim Dahle (16:45): "The more you save, the less you need in retirement and the more you have to put into your investment accounts where that money can compound."

• Income Growth Strategies: Enhancing income through career advancement, side gigs, additional certifications, or entrepreneurial ventures is crucial.

  • Jim Dahle (18:10): "There are lots of ways to increase your income... starting a side gig."

Customization of FIRE:

• Personal Choice: FIRE is not a one-size-fits-all model. It depends on individual goals, desired lifestyle, and financial situations.
  • Jim Dahle (19:00): "You may not value becoming financially independent at 35 or 45, right? That's totally fine."

Empowerment Through Financial Independence:

• Career Flexibility: Achieving financial independence provides the freedom to make career choices based on passion rather than necessity.
  • Jim Dahle (20:05): "Financial independence allows you to make the decisions and the changes in your career and your job that allow you to do that."

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Conclusion

Episode #225 of the White Coat Investor Podcast underscores the transformative power of disciplined saving, strategic investment, and entrepreneurial spirit in achieving financial independence swiftly. The featured couple exemplifies how high-income professionals, particularly in the medical field, can leverage their earnings to build substantial wealth and attain FIRE within a remarkably short timeframe. Dr. Dahle’s insights further elucidate the FIRE concept, offering listeners practical guidance on tailoring their financial strategies to achieve personal milestones of independence and security.

Notable Quotes:

• Jim Dahle (09:05): "Our saving rate is about 80 to 90%."
• Anonymous Entrepreneur (16:17): "The more you save, the less you need in retirement and the more you have to put into your investment accounts where that money can compound."
• Jim Dahle (20:05): "Financial independence allows you to make the decisions and the changes in your career and your job that allow you to do that."

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Learn More:
For additional resources and insights on achieving financial independence, visit White Coat Investor.

Transcript

[Jim Dahle]

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

[Anonymous Dentist]

This is Milestones to millionaire number 225. Couple leverages a dental practice to reach financial independence in nine years Since April 2021, more than 650 positions in the White Coat community have invested over 300 million with DLP Capital, a 12 Time Inc. 5000 honoree that offers four private real estate investment funds. One of my favorite ways to invest in real estate. If you're eager to achieve success as a private real estate investor, DLP's impact focused sponsored funds offer the potential to earn double digit returns while making an impact on America's affordable housing crisis. Interested in learning more? Head to whitecoatinvestor.com DLP today. All right, we got a promotion going on here at WCI as well. If you will book a [e-mail] Between June 1 and June 30, you will get a copy of one of our online courses, our continuing financial education 2024 course. This is like 50 hours of material and we're giving it away free to anybody who books a consult as student. I mean, if you've been following news, it's like there's a change in student loans every week all spring. And so if you're not sure if your student loan plan is still the right plan, now's the time to have a consult with a professional that can guide you through it. No, PSLF is not gone. No, not all IDRs are gone. They still exist. Are there changes that you need to know about? Yes. Do you need to have backup plans and things like that in case Congress or the White House decides to make some additional changes? Yes, but we'll help you walk through it. So you have a plan that's going to work for you that you don't have to lie awake at night worrying about your student loans. Whether you owe $80,000 or whether you owe $800,000, it can be worth your time and a few hundred dollars to chat with an [e-mail] and to bribe you to do it. We're going to give you a copy of CFE 24 to go along with that. All right. We got a great interview today. We got a couple who have become financially independent. So I thought after we chat with them, we're going to talk about the concept of fire and learn a little bit more about that. All right. We have two guests today on the Milestones to Millionaire podcast who are going to remain anonymous, which isn't unusual. What I found on this podcast over the years is the further along the milestone is, the more people want to remain anonymous. And we grant them that opportunity because we like the details. And when people are anonymous, they share a lot more details. We know you guys like the details as well. And frankly, you don't care what their names are or whether they live down the street from you. So although somebody out there may recognize their voices, we're going to allow them to stay anonymous. But. But let me introduce them to you very briefly. She is a dentist. He is a business person, an entrepreneur, and they have recently achieved a milestone. So welcome to the podcast, guys, first of all, and secondly, why don't you tell us what milestone you've achieved?

[Jim Dahle]

Oh, thank you. Thanks for having us. So we reached fire. We reached financial independence. So we're still working on the retiring part and winding things down, but it's safe to say we could just kind of hang out and do what we want for the rest of our lives.

[Anonymous Dentist]

Very cool. So you've hit financial independence and tell us how far you are out of dental school.

[Anonymous Entrepreneur]

Well, I graduated in 2016.

[Anonymous Dentist]

2016. So that puts you nine years out of dental school. That's pretty awesome to already be financially independent nine years out of dental school. That is not common and it's very unusual. So you guys got to tell us the story. How did you get from, you know, coming out of school just nine years ago to now never needing to work again?

[Jim Dahle]

Yeah. Okay. I guess let's start from the beginning. So when we got out of school, so I was working on my MBA and she was going to dental school at the same time. We both got out the same year in 2016, and at that time, you know, we were pretty much flat broke. We didn't have any money, just a bunch of debt. And we both went to work for normal jobs, her as an associate. I worked in a big tech company for a while, and a couple years down the line, my wife said, hey, I want to start my own office. And so she was working on that and she dragged me into it a little bit. And then Covid also happened. So I went from working on the sidelines to working in the office. And fast forward five years, we built a really successful kind of mid to large size dental office and finally partnered with a larger organization this year, which led to a pretty good, I guess, cash payment for a portion of that business. And now we're able to scale things down. Financial independence.

[Anonymous Dentist]

Very cool. So give us a Sense of what you're. Well, first of all, let's start with the year you came out of school, 2016. What was your net worth? I mean, how much debt did you have?

[Jim Dahle]

It was pretty evenly split between us. So I did the research for this. So my wife had 180k coming out of dental school and then I had 120 coming out of business school. So we had 300 total. And that was pretty much our net worth. We had kind of nothing except debt at that point.

[Anonymous Dentist]

Okay, so what did your income look like over the last nine years? Not counting this recent payment for part of the practice, what did your income look like year to year?

[Jim Dahle]

Yeah, so it ranged. In the beginning years, it was as low as 250 when we started. And in our highest earning years, which was kind of last year, we hit 975.

[Anonymous Dentist]

Okay, and is most of that from the practice and its success or was there a pretty significant contribution coming on the entrepreneurial side, the business side, your side?

[Anonymous Entrepreneur]

I think Most of the 975 is just from the business.

[Jim Dahle]

Yeah, so I think we, I think we gotta say like we're, we're working kind of. So we work together in the business. Right. So.

[Anonymous Dentist]

Okay, so you say you're also working in practice.

[Jim Dahle]

All right, yeah, so there's, there's a part portion of that, probably about 2, 300 comes from working as a dentist. And then the remainder of that comes from, you know, developing that office into a large office, seeing a lot of people with multiple doctors working in it. So a lot of that is the, I guess the entrepreneurial profit of the office.

[Anonymous Dentist]

Okay, so not counting the recent cash payment for the sale of the business, approximately what would your net worth be without that cash payment?

[Jim Dahle]

Okay, that's a good question. So it would be about $5 million.

[Anonymous Dentist]

Before that 5 million. And then you add another what, million million and a half or so from that cash payment. Another three, another $3 million. Okay, so we're talking about 8 million net worth now, which would make most white coat investors financially independent. That's when people define enough, that number's usually less than 8 million. So congratulations to you on that success. That's pretty incredible. It's not quite a million dollars a year, but it's pretty darn close of wealth that you've built over the last nine years. So pretty cool. Tell us how that wealth is now divided up. What do you invested in?

[Jim Dahle]

So of the 8 million, we have about 600k in cash and just high yield savings accounts, about 300k. In real estate, that's really just equity in our own house, 6 million in investments. So equity investments, we're mainly 100% spy for the most part.

[Anonymous Dentist]

That worked out really well in 23 and 24, huh?

[Jim Dahle]

I know. And it was, it made me want to throw up just about a month ago, but yeah. And then a million in private stock for other businesses.

[Anonymous Dentist]

Okay, so very cool. Well, I mean, if we go back and we add up all the money you made, it would add up to something close to the $8 million you still have. So what the heck, right? How much did you spend over the last eight or nine years?

[Anonymous Entrepreneur]

Our saving rate is about 80 to 90%.

[Anonymous Dentist]

80 to 90% net, I assume because you're paying significant amount of taxes, right?

[Jim Dahle]

Well, that was pre tax, so net it would probably be around like 60 or 70%. But from a spending perspective, we only spend maybe like 8 to 12k a month. So about 144, 145 a year.

[Anonymous Dentist]

Yeah. So that leaves a lot of money to build wealth. I mean, it was leaving money to build wealth. When you're making a quarter million dollars, certainly as you get closer to a million, that's a lot of money going toward wealth building.

[Jim Dahle]

I think that's the thing that we really did well. And I give her all the credit for that because I am the spender and she keeps me controlled spending money. Right. So I'll give her all the credit for getting that high savings rate.

[Anonymous Dentist]

So how did you guys resist the siren call to spend more? I mean, for most people when they have more income, they spend more money. You guys didn't do that? Why not?

[Anonymous Entrepreneur]

I mean, we kind of had been told once you get a lot of money, you should wait about a year before spending a large chunk of it. You know, that's what I was thinking. It's not been easy. Just the other day I was telling not to buy a $1.5 million house because it would just set our retirement plan completely back.

[Jim Dahle]

So she's super forward thinking, I'll say that. So she's always got the goal in mind and keeps me from getting off track for sure. The other thing about this is, you know, it's really hard to make a million dollars a year profit in a dental office. So both of us were just there just working all the time. And that really helped us not spend money as well because.

[Anonymous Dentist]

Yeah, yeah, it's hard to spend when you're at work. Okay, now I can see you because I've got a video while we're chatting. Other people won't be able to see you. But you guys are, you know, 40s, I would guess, or early 40s. Not even that yet. Late 30s.

[Anonymous Entrepreneur]

I'm 35.

[Jim Dahle]

Yeah, I'm 36.

[Anonymous Dentist]

Okay. Yeah. So you're young. So I guess the question for me when I see somebody fi at such a young age, whether that's 35 or 45, is what does your financial life look like going forward now? Now that you don't have to work, how much are you going to work? Now that you have enough money to spend more than the 140 or $150,000 you've been spending, what do you expect your spending to look like going forward? Tell us what your vision, what your plans are going forward for your financial life.

[Anonymous Entrepreneur]

So my plan is to really just stay at home and take care of my child and another one on the way.

[Anonymous Dentist]

Congratulations.

[Jim Dahle]

Thank you.

[Anonymous Entrepreneur]

Thanks.

[Anonymous Dentist]

So you're going to fire. You're done. You're punching out. You don't expect to go back to. You don't expect to go back to dentistry at all?

[Anonymous Entrepreneur]

Hopefully not for a couple years.

[Anonymous Dentist]

All right, and how about on the other side? What's work look like for you going forward?

[Jim Dahle]

So I always had the goal, Right. I think both of us always had the goal to retire at 40. Now that we're getting closer and, you know, we've achieved that to some sense, it actually becomes super scary in terms of what are you going to do afterwards? And then what I'm realizing is I actually. I really like working. I really like putting things out into the world that give people a lot of value. But what financial independence gave us is kind of that freedom, Right. To decide what that is for ourselves and not worry if it fails or makes her any money. So, yeah, I think I'll probably just build another product and put it out there, but probably really, really slow.

[Anonymous Dentist]

Yeah. Now, 3 or 4% of 8 million is something like, you know, $300,000 a year, about twice what you're spending now. Do you expect your spending to change, or do you think you're going to keep spending about 150 a year?

[Jim Dahle]

Oh, my gosh. That's the hardest thing, is trying to learn how to spend more money and break those habits. We were just talking about this last night as we were prepping for this. You know, we got to learn how to do that. Yeah.

[Anonymous Entrepreneur]

I mean, our spending hasn't changed. I think the only reason it would change is if we had a higher mortgage payment.

[Jim Dahle]

Yeah.

[Anonymous Entrepreneur]

And our lifestyle. We already take vacation.

[Anonymous Dentist]

Yeah.

[Jim Dahle]

So this is another thing. Right. So we. We don't. I don't think we want for anything. We just live in kind of like a medium or low cost of living area because we're kind of out, and we're out on the outskirts of a large city, but kind of close to, like, the farm area. So it doesn't cost as much to live here. We take a lot of vacations. We kind of buy whatever we want, I guess. But, yeah, I think the two things that we could really work on is maybe upgrading our lifestyle just a little bit and not delaying gratification, I guess.

[Anonymous Dentist]

Yeah. One of the best books out there that we've mentioned on the White Coat Investor podcast before for people with your challenge. Right. And it's a great problem to have. There's no doubt about it. This is the ultimate first world problem. Right. Is die with zero, which is a great buck for people like you and me, that maybe of the five money activities, the one we're not the best at is spending. And I know of no other book that's as good at making you really think about ways you can use your money in a manner that'll bring more happiness to your life and that of others. Okay, well, very cool. You gotta tell us a little bit about the discussion, maybe an ongoing series of discussions between the two of you and how you got on the same page to work so hard and so aggressively toward early financial independence.

[Anonymous Entrepreneur]

I think the hard work and ethics of that really just comes from our parents and watching them work hard as they're immigrants.

[Jim Dahle]

Yeah.

[Anonymous Entrepreneur]

So seeing them work, like, over time, over, like, so many hours, working night shifts constantly, really made me feel like I owe it to them for making them since they came to another country and worked so hard. I think it's just something that we should do.

[Jim Dahle]

Yeah, I think. I think I agree with that completely. You know, both of our parents are immigrants. They both came from different countries. But that. That hustle, that working, building a better life, that was, I guess, instilled in us from. I can't even remember a time when they were. They would take vacations. Right. So I think that became innately part of our personalities, and it's just something that we knew about each other when we met. Both of us would do this in graduate school, and we do the same thing today.

[Anonymous Dentist]

Yeah. But there was never a time where one of you came to the other and said, why are we saving three quarters of our income? What the heck are we doing? There's no big disagreement like that along.

[Jim Dahle]

The Way, my gosh, I did that yesterday.

[Anonymous Entrepreneur]

First of all, I don't even know the financial background of our income. I. I don't know how much we save. So I'm always frugal because I don't know my finances. I don't really look at my net worth or my stocks. I'm just like, hey, I'm in the same mindset as I was when I graduated.

[Jim Dahle]

Yeah, so that helps. Yeah. So when we got married, she basically handed all that responsibility to me and then never looked back. But, yeah, we definitely have those conversations. We had one last night as we're planning to do this podcast today. And like you said, it's just something that we need to learn, something that we need to grow into. There's going to be a balance. I think we're blessed to have the opportunity to grow our lifestyle and enjoy it a little bit more without having to worry about it for the most part. And now we both need to work on making sure that we take hold of that opportunity but not also waste it on frivolous things.

[Anonymous Dentist]

Right. Well, congratulations to both of you. You've been very successful. Thank you so much for being willing to come on the podcast and share your success with others and hopefully inspire them to reach their own financial goals. And I wish you continued success in all your endeavors, both financial and non financial.

[Jim Dahle]

Thank you so much, Jim. Thanks for letting us on this podcast.

[Anonymous Dentist]

All right. I hope you enjoyed that interview as much as I did. I love seeing people that are way more successful than me. I was telling them after we stopped recording that it took us seven years to become millionaires out of medical school. And lots of people are inspired by that. Right. I wrote a book, basically talks about how we did that and how they can do that and so on and so forth. Yet these guys got to 8 million in just eight or nine years, dramatically more successful than Katie and I were. And so it's super impressive. But I think it's important to understand the concept of fire. Okay. FIRE is financially independent. Retire early. And the most important concept to understand here is that retirement is not an age, it's a number. It's the number at which you're financially independent. And you can quibble about the 4% guideline, but it's pretty useful to determine about how much you need to be financially independent. The equation is very easy. Right. You just reverse engineer 4% into 25x. Right. So 25x what you spend every year, including taxes and any advisory fees, is how much you need to be financially independent. So if you spend $100,000 a year, you need $2,500,000 to be financially independent. If you spend $200,000 a year, it's $5,000,000. If you spend $300,000 a year, It's $7,500,000. If you spend $400,000 a year, it's 10, 10,000,000, right? And that'll get you in the ballpark about how much you need to be financially independent. Now, how do you get there? Well, especially when getting there rapidly, about anytime, it basically boils down to your income and your savings rate, right? The more you save, the less you need in retirement and the more you have to put into your investment accounts where that money can compound, right? So you can make a chart. If you're saving 0% of your income, you're never going to be financially independent. You're going to work until the day you die. Unless, you know, maybe you're living on Social Security or something. If you're saving 100% of your income, you're already financially independent, right? Because you don't need any of your income to live. I don't know what you're living on, but you don't need your income to do it. Everybody else is somewhere in between, between 0% and 100%. Now, the recommendation I make to most doctors is, is that they save about 20% of their gross income or retirement throughout their career. And over the course of a 30ish year career, that'll get most doctors to the point where they can maintain their standard of living during retirement. They'll save 20% of their gross throughout their career. They ought to have enough by the time 30 years have passed that they can maintain that standard. Now, if you want to retire earlier than that, you got to save more, right? You save 25% or 30% or 40% and you start seeing the years being knocked off to the point where you do what this couple did and you're saving 50% and 60% and 70% of your gross income. You get to financial independence pretty quickly. Now, obviously, income matters, right? It's just way easier to save a lot of money when you make $800,000 a year than when you make $150,000 a year. And frankly, the vast majority of people dramatically overestimate the difficulty of doubling their income, right? There's lots of ways to increase your income. It's harder the more you make, of course. But you know, when you have a $30,000 a year job, just doing a little Uber in the evenings might double your income, right? But for other people, it's getting an additional certification, it's getting an additional degree, it's negotiating better your next job opportunities opportunity. It's changing jobs, it's asking for a raise, it's starting a side gig. Those are the ways you increase your income. When you increase your income, yeah, you're going to pay more in taxes, but you also have more income available to save to get you toward financial independence. Now, you may not value becoming financially independent at 35 or 45, right? That's totally fine, right? There's no reason you have to be financially independent early. Fire. You're not like a failure if you don't fire by any means. In fact, I would love for doctors to be so happy with their work that they'll stick with it until they're 55 and 60 and 65 and 70. But I want them to be doing it because they love it and I want them to be doing it on their own terms. And financial independence allows you to make the decisions and the changes in your career and your job that allow you to do that. So even if you don't retire early, you know, moving toward financial independence and becoming financially independent will open up those options for you. So I hope that's helpful in understanding the concept of financial independence. Our sponsor for this episode is DLP Capital, trusted by more than 3,500 accredited investors in all 50 states as of March 31, 2025. DLP Capital's strategic focus on attainable workforce, housing and fast growing Sun Belt markets gives you the potential to earn consistent monthly income, diversify away from stocks and bonds and generate double digit returns. DLP's current offerings include both private credit and equity strategies, making it easy to find the right fit for your risk tolerance and investment goals. And don't forget, DLP offers lower investment minimums exclusively for White Coat investors. Discover [e-mail] DLP thanks for being part of this podcast. You can be on it too. Just go to whitecoatinvestor.commilestone and apply until next week. Keep your head up and shoulders back. You've got this. We're here to help. See you next time on the Milestone Podcast.

[Jim Dahle]

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.