White Coat Investor Podcast - Milestones to Millionaire #255

Episode Title: PA Becomes a Millionaire and Finance 101: Backdoor Roth IRA Process
Date: December 29, 2025
Host: Dr. Jim Dahle
Guest: David (PA, recent millionaire)

Episode Overview

This episode celebrates the financial success of David, a physician assistant (PA) who became a millionaire through disciplined saving and investing, despite not being a high-earner and living in high cost-of-living areas. The episode aims to demonstrate that financial milestones like achieving millionaire status are attainable for medical and allied professionals across various income levels by following solid personal finance principles. The second segment revisits the step-by-step process of executing a backdoor Roth IRA, a recurring topic vital for high-income earners in the audience.

Key Discussion Points and Insights

1. David’s Journey to Millionaire Status

[04:02–15:25]

Background and Early Career

• Non-traditional student:
  • Started college at age 31 (second career)
  • Undergraduate degree from UNC Pembroke in Biology; worked as a paramedic
  • Attended PA school at Wake Forest; benefited from scholarships
  • Funded through National Health Service Corps (NHSC), covering tuition and providing stipends
    • Required two years of service in an underserved area

Early Financial Mindset and Habits

• Upbringing: Raised by an immigrant mother from Thailand who instilled values of saving and frugality
• "She was always, always a saver and...making sure she had money to send back home to the family. So I just kind of adopted that and have just lived that way." (David, [07:39])
• Drove the same Toyota truck bought new in 2005

Career Milestones and Geographic Moves

• Intended to work in NC, but COVID and NHSC placement requirements led David to Tampa, FL, for two years
• Currently lives and works in Hawaii ("on a little rock in the middle of the Pacific"), renting due to high real estate prices ([08:40])
• Income history:
  • First PA job: $83,000/year under NHSC obligation
  • Current salary: $150,000–$180,000 with bonuses and per-diem work ("I get per diem to go to the neighbor islands to see patients over there." – David, [12:25])

Asset Accumulation Breakdown

• Net Worth Components:
  • $500,000 in a traditional IRA (opened at age 18)
  • $50,000 in Roth IRA at current work
  • $50,000 in prior employer's Roth IRA
  • $170,000 in high-yield savings account
  • $350,000 in a brokerage account
  • No debt: “I’ve been debt free since I sold my house in Hawaii, 2012.” (David, [09:40])
  • Currently renting; no mortgage

Motivation and Mindset

• The drive for financial security rooted in childhood poverty and memories such as returning food at checkout when his mother couldn’t pay ([10:03])
  • “I said, I never want to be in that position.” (David, [10:42])

Investment Philosophy and Advice

• Consistency and Early Investing:
  • “Start early and be consistent...being able to buy Amazon at $8 a share in my retirement account and Netflix at $10 a share 20 years ago. That’s really what got me here.” (David, [13:40])
• Living in a High Cost of Living Area:
  • Leverages family property and finds less popular, more affordable neighborhoods (“Do your homework, do your recon, get out and see the area…you can find different pockets…a little more affordable.” – David, [13:01])

Next Goals and Passion Projects

• Released a self-published children’s book ("Goodnight Alex"); working on a second book
  • "I sold 200 copies, so I made about $200 in the last 12 months." (David, [14:57])
  • “It’s cost me 10 times that.” (David, [15:11])

2. Broader Reflections on Wealth Building

[15:29–16:40]

• Host’s summary:
  • "You don’t have to be a super high earner in order to do well financially, right?...You can all be financially successful by following the same principles. Make a lot of money, carve a big chunk to invest…"
  • Importance of investing early, insurance, and letting compound growth work over decades (Dr. Dahle, [15:29])

3. Finance 101: The Backdoor Roth IRA Process (Annual Refresher)

[16:40–21:42]

• What is a Backdoor Roth IRA?

  • Legal workaround for high-income earners ineligible for direct Roth IRA contributions

• History and Rule Changes:

  • Before 2010, high earners couldn’t contribute to Roth IRAs or convert traditional IRAs; conversion rules changed in 2010

• Process Breakdown:

  1. Contribute to a traditional IRA (annual limit: $7,000–$8,000 depending on the year); anyone with earned income can do this, but contributions are generally not deductible for high earners
  2. Convert the traditional IRA funds into a Roth IRA (Roth conversion)
  3. Ensure no pre-tax (deductible) IRA balances at year-end (to avoid pro-rata tax complications). This includes all traditional IRAs, SEP IRAs, and SIMPLE IRAs, but not 401(k)s or Roth IRAs.
  4. Report on IRS tax Form 8606; contributions and conversions may occur in different years if necessary

• Key Warnings:

  • Avoid “pro-rata rule” issues by ensuring no pre-tax IRA balances before conversion
  • Roll over pre-tax IRA funds into workplace retirement accounts (401(k), 403(b), etc.) if needed

• Pro Tips:

  • Do the contribution and conversion steps early in the calendar year
  • Any earnings on the waiting period (a few bucks of interest) can be converted separately and taxed at ordinary rates
  • Use resources and tutorials at whitecoatinvestor.com for help ("You'll find the tutorial page. It’ll walk you through...with screenshots." – Dr. Dahle, [20:28])
  • Community forums available for questions

• Why it’s worth doing:

  • "You're way better off investing in a Roth IRA than you are in a taxable account...this is a no brainer." (Dr. Dahle, [21:00])

Notable Quotes & Memorable Moments

• "I am officially a millionaire." — David ([04:34])
• “It’s pretty cool to be a millionaire...always going to mean something in our culture.” — Dr. Dahle ([05:08])
• "I get more joy out of experiences and giving things to other people than to buy stuff for myself." — David ([07:39])
• "My mom didn’t have enough money, and we had to give the food back...I said, I never want to be in that position." — David ([10:42])
• "Start early and be consistent… That's really what got me here." — David ([13:40])
• “[On publishing her book] It’s probably 80% passion. I don’t know, the return on investment is going to take a long time.” — David ([14:57])
• "You don't have to be a super high earner in order to do well financially, right?" — Dr. Dahle ([15:29])
• "The end result is exactly the same as just contributing directly to a Roth IRA. But there is a catch..." — Dr. Dahle, explaining the pro-rata rule ([17:45])

Section Timestamps

• Interview with David begins: [04:01]
• Assets and Net Worth Details: [08:40]
• Motivation and Upbringing: [10:03]
• Income Details & High Cost of Living Strategies: [11:34], [13:01]
• Advice for Others: [13:40]
• Children's Book and Side Hustle: [14:19]
• Host Recap: [15:29]
• Backdoor Roth IRA Deep Dive: [16:40]
• Q&A and Resources: [20:30]

Key Takeaways

• Millionaire status is attainable for medical professionals (including PAs) even on non-physician incomes, with sustained discipline, early investing, frugality, and consistent contribution.
• Upbringing and money memories can catalyze a lifelong drive for financial security.
• Strategic living choices (even within expensive locales) and resourcefulness help control expenses.
• The backdoor Roth IRA is a critical annual task for high-income savers; understanding tax implications (particularly the pro rata rule) is essential.
• The White Coat Investor community provides vast free resources and a supportive forum for learning and troubleshooting.

This summary provides a detailed and engaging walkthrough of the episode for all who wish to leverage WCI principles for their own financial journey or learn core strategies like the backdoor Roth IRA.