Episode Overview

Podcast: White Coat Investor Podcast – Milestones to Millionaire #258
Host: Dr. Jim Dahle
Guest: Jacob (second-year medical student, full-tuition scholarship recipient)
Date: January 19, 2026

This episode celebrates the remarkable milestone of Jacob, a medical student who received a full-tuition scholarship to medical school. Dr. Dahle also dives deep into 529 plans during the Financial Boot Camp segment, offering crucial advice for high-income professionals planning for educational expenses. Core themes include strategies for minimizing educational debt, cultivating sound financial habits early, and the role of generosity and giving back.

Key Discussion Points & Insights

1. Jacob’s Full Tuition Scholarship Journey

• Nature of the Scholarship

  • Jacob is one of four students per year at his medical school to receive a full tuition (and fees) scholarship, funded by a donor’s endowment.
  • Not a “service commitment” scholarship (like military or NHSC) – there is no repayment or post-graduation obligation.
  • The scholarship is not advertised separately; recipients are selected from among all applicants using their med school application.

• Jacob’s Reaction & Experience

  • He was unaware such a scholarship existed at his school until he was notified as the recipient.

  • Jacob initially planned to fund medical school entirely with loans, so the scholarship was life-changing and deeply moving.

  • Memorable story: Jacob recalls receiving the phone call from the foundation while studying biochemistry in the library, initially suspecting it might be a scam (08:00–08:30).

    “I got pretty emotional because, I mean, I was planning to pay off $250,000–$300,000 worth of loans. … It was pretty awesome.”
    —Jacob, 07:53–08:28

2. Financial Strategy Before and After the Scholarship

• Pre-Scholarship Planning

  • Before proposing to his (now) wife, Jacob mapped out his projected loan burden and repayment plan on a sticky note to share with her (06:32–06:50).

    “I actually wrote on like a sticky note how much I planned my loans to be, how I plan to pay them off... felt like that was probably relevant information for her to know before we got married.”
    —Jacob, 06:36–06:46

  • Used approximately $10,000 from a grandparent’s 529 plan for undergrad expenses, and worked part-time but still needed undergraduate loans (07:05).

• Life and Money During Med School

  • Jacob’s wife, a nurse working in a children’s emergency department, supports them, enabling him to avoid further loans for living expenses (10:12–10:26).

    “She works at the children's emergency department. So don't plan to take out any more loans. Hopefully that can get us through and we live pretty frugally.”
    —Jacob, 10:16–10:25

  • Remaining loans are solely from undergrad (~$40,000), which he intends to pay off within months of finishing residency (10:34–10:51).

3. The Emotional and Practical Impact of the Scholarship

• The scholarship removed a significant mental burden, freeing Jacob to consider more career options or specialties without being tied by debt considerations (09:06–09:57).

  “It really just takes kind of a weight off your shoulders... it was a big stress for me. That’s actually why I started reading your stuff…”
  —Jacob, 09:06–09:25

• Dr. Dahle reinforces that, even without scholarships, medical school is a worthwhile investment if managed wisely—“Medical school’s still a good investment. Even if you got to borrow the whole sum … as long as you learn how to manage money, it’s going to work out.” (09:40)

4. The Role of Paying It Forward and the Importance of Giving

• The scholarship donors requested recipients commit to community service, such as a “day a month of kind of like pro bono work” (11:18–11:40).

• Jacob feels inspired to help future students, reflecting on the life-changing impact such generosity can have.

  “Because it's, you know, it's changed my life. So hopefully I can do that for somebody else.”
  —Jacob, 11:53–11:57

5. Early and Ongoing Financial Education

• Jacob began studying personal finance as soon as he realized the likely burden of med school debt—bought Dr. Dahle’s course, reads his books, follows podcasts.
• He plans to keep learning and apply the lessons when he starts earning.

6. Mindset: Money and Medicine

• On whether doctors should focus on money: Jacob believes good financial management is foundational to being a better doctor, as it reduces stress and frees you to focus on patient care (13:06–13:52).

  “I think better. … It helps you be a better doctor. If that's the only thing in your mind, that's bad. But it should definitely be a priority.”
  —Jacob, 13:06–13:52

7. Advice for Medical Students Without Scholarships

• Jacob emphasizes that paying off even large med school loans is possible—if you get through school, match, complete residency, and work in typical physician jobs, the loans are paid off within a few years out of training.

  “If you're making $350,000 a year, it really isn't a very large portion of your income you have to put away for these loans. … So it is possible. Just, you know, work hard, get through med school, get through residency.”
  —Jacob, 14:31–14:57

Financial Boot Camp: The Basics and Nuances of 529 Plans

Timestamps: [15:10–23:36]

• What is a 529?

  • Tax-free growth and withdrawals for eligible educational expenses.
  • Some states offer a deduction or credit for contributions (15:43–16:21).

• Selecting a Plan

  • If your state offers a tax deduction, use your state’s plan; if not, shop around for the best plans (Utah, Michigan, Ohio, Nevada, NY).
  • Plans have improved over the past decade—most are now “pretty good.” (16:32–17:09)

• Contribution Limits & Strategies

  • There’s no absolute max; can “superfund” with five years’ worth of annual exclusion contributions, but don’t need to over-complicate (17:16–18:13).
  • Don’t stress about maxing it out or starting before a child is born.

• How Much Should You Save?

  • Don’t overfund. Multiple options exist for paying for college (scholarships, work, choosing more affordable schools, paying from cash flow).

  • The real benefit is tax-free growth, not tiny state deductions.

    “The real value is in the federal tax-free growth and the federal tax-free withdrawals. … That's where the real value is. It's not in the little deduction you get up front.”
    —Dr. Dahle, 18:56–19:15

• Investment Approach

  • Two schools: reduce risk as college approaches vs. investing aggressively throughout.
  • High-income families may choose aggressive (100% stock) allocations, even during college years, relying on cash flow flexibility if needed for downturns (19:47–20:24).

• What If You Have Leftover 529 Funds?

  • New option: “Rollover” up to $35,000 to a Roth IRA for the beneficiary (limitations apply; must have earned income; takes multiple years) (20:25–21:03).

  • Change beneficiary to another child, self, or grandchild for generational compounding.

  • Withdraw and pay taxes/penalty as a last resort.

    “If your kid has a big huge 529 because they got a big huge scholarship, you can actually take the money out equal to the amount they got in scholarship...you don’t have to pay that 10% penalty.”
    —Dr. Dahle, 22:02–22:13

• Non-College Uses

  • Can use up to $10,000 per year for K–12 private school in many states (but not state-tax free everywhere—see California, NJ, NY, IL) (22:26–22:36).

• Parental Guidance

  • Don’t overfund. The primary virtue is tax-advantaged growth, but there are multiple fallback options.
  • 529s are a “great way to show your kids you care about them” (23:20–23:26).

Notable Quotes & Memorable Moments

On finding out about the scholarship:

“I got pretty emotional because, I mean, I was planning to pay off $250,000–$300,000 worth of loans...It was pretty awesome.”
—Jacob, 07:53–08:28

On paying it forward:

“Because it's, you know, it's changed my life. So hopefully I can do that for somebody else.”
—Jacob, 11:53–11:57

On mindset:

“I think better. … It helps you be a better doctor. If that's the only thing in your mind, that's bad. But it should definitely be a priority.”
—Jacob, 13:06–13:52

On the real value of 529s:

“The real value is in the federal tax-free growth and the federal tax-free withdrawals…That's where the real value is.”
—Dr. Dahle, 18:56–19:15

Advice for med students with loans:

“If you're making $350,000 a year, it really isn't a very large portion of your income you have to put away for these loans. … So it is possible. Just, you know, work hard, get through med school, get through residency.”
—Jacob, 14:31–14:57

Timestamps for Important Segments

• 04:14–05:36: Jacob explains the scholarship’s origins and selection process

• 07:30–08:39: Jacob recounts his emotional reaction and how he found out

• 09:06–09:57: Discussion of how the scholarship impacts career decisions and reduces stress

• 10:12–10:51: Jacob and wife’s financial strategy during school, impact on loans

• 11:18–11:57: Role of generosity and community service in response to scholarship

• 13:06–13:52: Does focusing on finance make you a better or worse doctor?

• 14:03–14:57: Advice to students facing debt; big-picture loan repayment strategy

• 15:10–18:13: 529 plan basics: selection, contribution limits, strategies

• 19:47–20:24: Investing approach for 529s

• 20:25–22:13: Options for leftover 529 funds (Roth rollover, change beneficiary, withdrawal rules)

• 22:26–23:36: Non-college uses of 529s; state-specific K–12 rules; final guidance

Conclusion

This episode is a compelling exploration of the power of generosity, sensible personal finance—especially for aspiring professionals—and the value of early financial literacy. Jacob’s story is both inspiring and practical, showing how a windfall can enable new freedoms, but also emphasizing that, with the right approach, even large educational debt is manageable. The detailed exploration of 529 plans provides up-to-date, nuanced advice for anyone planning for their own (or their children’s) educational future.

For more financial education: whitecoatinvestor.com