← White Coat Investor Podcast
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- [00:00]
A
This is the White Coat Investor Podcast, Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom. This is Milestones to millionaire podcast number 264. If you're a high income physician, you already know how hard you work for every dollar. The question is, how much of it are you actually keeping after taxes? Gilt is a tax firm focused on proactive tax structure strategy guided by expert CPAs and optimized via in house AI tools. They work with physicians and practice owners to use the tax code more intelligently. So your entity structure, deductions and income timing all work together to help you keep more of what you earn. As a White Coat Investor listener, visit whitecoatinvestor.com GILP to book a free strategy intro and receive 10% off your first year with GILT. It's time to start using your tax plan as a lever for growth. Okay, welcome back to the podcast. These are some of our favorite podcasts to record. Cause we get to meet so many White Coat investors and you guys are awesome. It is totally inspiring to me every time to meet you and I was inspired again today doing this interview. You're going to love it with Jasmine. She's done some really cool stuff and I'm super impressed with her and I think you're going to be as well. But before we get into it, I want to remind those of you out there who buy WCI books. I know there's a whole bunch of you out there that buy it. For trainees or students or colleagues or whatever, we offer bulk book discounts. Okay. 25 plus is what you got to buy. If you buy 25 plus, you get a cheaper price on them. Okay. And we'll ship them right to you. All in one box. Right. Email booksitecoatinvestor.com to get that. In fact, if you buy more, we'll even give you a better price. If you buy 100 plus or something, we'll give you even better pricing. But email books at White Coat will get you taken care of. Okay, let's get into the interview, but stick around afterward. We're gonna talk a little bit about mutual funds. Our guest today on the Milestones to Millionaire podcast is Jasmine. Jasmine, welcome to the podcast.
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Thank you for having me. I'm so excited to be here.
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A
I bet. You know, I always ask people when we're prepping them for this podcast if they've listened to any of these before. And the most common answer we get is actually what Jasmine told us, which is, I pretty much listened to all of them. So it's your turn, right? You've listened to literally hundreds of these, and it's your turn to celebrate your milestones. So let's introduce you to the audience, tell them what part of the country you're in and what you do for a living, how far you are out of training.
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Awesome. My name's Jasmine. I am a gyn oncologist. So I focus on pelvic tumors. There are uterus tumors, ovary tumors, vaginal vulva, cervix. So I do those surgeries and I give chemotherapy for those patients. It's a really fulfilling job. I am currently in the dmv, which stands for dc, Maryland and Virginia. I live in Northern Virginia and I travel around D.C. through the Beltway, which is really challenging sometimes. And I work in the Southern Maryland area, right outside of D.C. okay.
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A
So that's a decent commute in a high cost of living area.
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It's a very high cost of living area.
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A
Yeah. So everybody out there in white coat investor land, you know, you're always like, bring people on with lower incomes. Bring people on in high cost of living areas. Here we have someone's in a high cost of living area. All right, tell them what you accomplished.
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I paid off all of my student loans. I should say we. I definitely didn't do it alone. We paid off all of my student loans. It was a total of 250 with my husband's student loans, and mine was about 220k and his was about 30k. So 250 combined, and we did that in about 11 months.
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A
11 months. Awesome. Okay. What does your husband do for a living?
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B
He told me to preface and say this, that he is a high income earner, but not making a doctor's salary. He's in research, kind of in the private pharmaceutical world, but science and medicine adjacent, I guess.
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A
You know, when my kids are asked what I do for a living now, they tell people I'm an influencer. So you can pretty much say you do anything on here and you won't look as bad as me. So. Okay, very cool. So you're. You're how far out of training? How far are you out of training again?
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I am just shy of two years. I finished fellowship in 2024, so this year it'll make two years.
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A
Okay, so by summer it's two years. But you applied to come on a few months ago if you're like most of our guests.
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B
Correct.
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And so you paid stuff off with within 11 months of coming out of training?
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B
Yes.
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A
Wow. How did you make that year?
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B
Oh yeah. So I calculated that because that year combined from the time that we paid it off, we probably grossed or took home only around like 330k. And so then we lived really frugally and paid off the rest. I will say that we were able to do that because we sacrificed and lived with my mother in law and so that helped. But we weren't living rent free. We paid her rent. And because this is a high cost of living area and not always are the schools exactly the way you want them. My kids were in private school at the same time, both kids. So that was about 60K. That was going towards just childhood education.
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A
Wait, wait, wait, wait, wait, wait. We got to go over these numbers again. You said 330net.
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B
Yeah.
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So we're not. So the taxes are already taken out.
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B
Yeah.
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Paid off $250,000 in student loans. The difference there is 80. And you're telling me you spent 60 of that on private school?
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B
Yes.
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A
What did you eat?
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And I guess probably the timeline doesn't exactly add up because private school had already been started paying some of that off. And so the timeline of those months don't exactly fall in the exact trajectory. But no, we had a low amount of student living costs because we lived with my mother in law. And then you're right, we ate her food, she cooked, she bought groceries. We did not really go out to eat that much. And so yes, I some days wanted to pull my hair out. And when you, when you asked the question later of was it hard? I really did think it was really hard.
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A
So yeah. Yeah. Okay, well this isn't living like a resident. This is living like a, like a student or something. Right? I mean, you guys crushed these loads. You took them in the corner and dropped an anvil on them. Okay. So you were super motivated and you recognized, okay, this is going to be a short period of time we can do this, right?
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Correct.
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But it did feel like a sacrifice. What was the biggest sacrifice, do you think?
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I think not having space. We lived in like a three bedroom townhouse. My kids room was right next to our room and my mother in law' rooms was right next to our room. So we had really just no space for about a year actually. So that was the hardest part. And then the commute was longer. I lived about an additional 30 minutes away from my job and so we chose to live with her to, you know, put an anvil on those loans. And so that meant that we didn't live close to our work and my kids didn't Live close to their school. So we all commuted for the year. And sorry, I guess I am leaving out a very important key. We did not put the anvil, just only on our own. We sold our house from Rhode Island. That's a probably pretty key part. And so it was a total of 150k.
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A
Okay. All right, this sounds a little more realistic anyway, right? So you got 150k in equity out of that and put it all on the student loans or what'd you do with it?
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So 100k we put on the student loans, and then we had $150,000 left off to pay.
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But you still had to come up with 150,000 out of that $330,000 while having two kids in private school?
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That's correct, yes.
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Wow. It's pretty awesome. Okay, so, you know, the lack of privacy, lack of having your own space. Not awesome. Are you now moving out separately or what's your plan going forward?
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Yes, so we moved out and we are renting a house because it's a high cost of living area. We are saving up for a down pavement.
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What's rent cost? Give us a sense of what rent costs out there.
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Rent is 5k a month for a very average house. And so, yes, it is very expensive. The normal home anywhere else trained in. In Michigan and the Midwest and in Rhode Island. And my house is smaller than my home that I owned in Rhode island. And that the home that I'm living in would cost about $1.5 million to buy. So it is not a cheap place to live.
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A
Yeah. Okay, well, take us back to this conversation the two of you had. I don't know, maybe the kids were involved too, that you had as you're coming out of training going. You know, I don't really like student loans. You know, I've been listening to this white coat investor podcast, and he says we should get rid of them. How'd that conversation go where you guys decided we're gonna, you know, wipe these things out in less than a year?
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B
My husband is a huge fan of yours. He's been reading your books since 2014. Before I was really ever interested in thinking about finance. And so it's definitely not my.
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A
You might have been Pre Med in 2014, right?
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Yeah, I was pre. I was my first year of med school when he stumbled upon your blog and just. He inhaled it and, you know, told me not to take out as much loans because he was working. But I didn't really listen. And so it was him or my husband was the One who really just sort of was like, we can do this. We're moving back to area with family. We have a lot of support. We can take the proceeds from the house, knock half of it out, and then do the rest if we sacrifice for a year. And so after a lot of convincing, that's what we did.
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So he was convincing you you're not the driving force behind this?
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I am not the driving force. So he gets all the credit.
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Does he know you're doing this podcast today?
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Yes. He's so excited and he's so. He, you know, our schedules are sort of opposite. He's away right now, so, yes, he's still wanted to shout. I have to shout him out because he is the driving force for it.
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Very cool. Okay, what's your next financial goal you're working on?
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I was hoping that by the time I scheduled this, that we would actually be at a million dollars net worth. And so we are at 850 right now. And that is also due to him because he read your blog. Ever since then, he has been doing a savings rate of about 20%, and just a lot of it was brute force for him. I'll shout out. The University of Michigan and their residency, they give a lump sum every year to residents to put away for their Roth. And so I got four years of a pretty substantial lump sum and that I didn't touch and I put towards my Roth. And so that's grown, like, significantly. And so we've just done really well with saving and investing. Prior to this year, we were, you know, he's a high income earner, so we were able to do a good amount of saving. And so we've benefited from him working all this time.
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A
Okay, well, it's pretty awesome that you've been building wealth this whole time, too, despite the fact that you were, you know, in a period of career and life where a lot of us are, you know, going negative. But at some point, you guys were making decisions to, no, we're going to invest and take out student loans. Right. You decided, you know, at least one of you did, I mean, probably together, I assume, maybe I shouldn't assume that you decided to continue taking out student loans despite investing. Is that because the student loans seem to be particularly low interest rate or you knew that somehow with your crystal ball, that you were going to hit those years where, you know, you didn't have to make payments on them and payments were at 0% or tell us about that decision back then when you decided to. To continue to invest despite the Fact that you were also borrowing for school.
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Yeah, I think sometimes when you're in medical training, you are on autopilot a little bit. And so part of it was probably almost just going through the motions. We had kids during that time, but I think he was really enamored by compound interests. And so he sort of was like, I'm going to at least do this instead of us trying to, like, scrimp by, I guess, and pay off the student loans. And so I think it was just a combination of life, kids and thinking that the compound interest would be to our benefit over the long run.
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And it obviously worked out.
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Yeah.
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And what you've demonstrated is that even a pretty massive student loan burden, I mean, 250 is more than average for a graduating MD student. You can just wipe it out very quickly. Right. If you really focus on it and turn and pivot your financial guns at this loan, you can kill it off in less than a year. So it obviously worked out great. Okay, well, if someone calls into the Dave Ramsey show and asks, should I borrow $200,000 or $250,000 to go to medical school? The hosts of that show would tell them no. They'd say, don't go to medical school. And yet you wiped this out in 11 months after coming out of training. It was obviously a wonderful investment to borrow that money to go to school, to get this degree and this knowledge and these abilities to treat pelvic tumors and do this wonderful thing for humanity. What would you say to someone that's hesitating to borrow the money to go to school?
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I think it is an investment, and I would say that as long as you have a plan and you are not borrowing an astronomical. Sometimes I have friends who have pretty crushing debt. I think that if it is a doable amount of debt, I feel for the dental students and other professionals that might not have the same return on investment, but I do think that we have a high chance of having a great return on investment. The other thing is that as long as you are wise about your spending, we didn't take a bunch of credit cards out. We didn't live above our means. It's really doable. And although those 11 months, I wasn't really living like even a resident most of our life, we traveled a lot, we went to. We've been all over the place. Japan, Thailand. We had kids. So, you know, it's not that we were scraping by for most of those
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times, okay, well, there's somebody out there, you know, that's coming out of Training or their spouse is coming out of training, they want to wipe out their student loans quickly. They're not sure how to talk their spouse into doing what you guys have just done. What advice do you have for that person?
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I just had to remember that we were a team, and I would tell them that try to work together as a team, and if you have to pivot, then you have to pivot. Like, if the plan didn't work out, it wasn't that we were locked into that plan. Worst case scenario, it didn't work out. And then we were going to rent something, and so we just were like, we'll try it and we'll see how long we last.
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And you said the family member you were living with is your mother or mother in law. Who was it?
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Mother in law.
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Mother in law. Okay, so that's not always an easy situation to live in the same house as a mother in law.
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No, it definitely might not be.
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Was she a supporter of this plan? I mean, was she in your. In your camp cheering for you this whole time? Or was she like, how much longer?
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No, no, I think she was sad to see us go. I mean, we had lived all over the place beforehand, so she got to spend a year living with her grandkids. And so, you know, before she was by herself. I think when you become an empty nester, it's great, but then you sort of miss your adult children. So it was actually quite a special time for my husband and his mom, and I got to get to know her even better. So it worked out well. Just close quarters.
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Well, Jasmine, you are a white coat investor success story. Congratulations on everything the two of you have accomplished. It's really wonderful. And thank you so much for being willing to come on the podcast and inspire others to do the same.
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Thank you so much for having me. We appreciate all that you've done. You've really changed our lives. Thank you.
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A
Okay. Super fun. That was awesome. I'm so proud of Jasmine. It is so fun to hear these stories, and every story is a little bit different how you guys are having financial success out there, and I'm so proud of what you're doing. I know we have so many of you applying for this podcast and it's great. We want you to continue to apply. We don't get everybody on right. Like, Megan opened up some slots to record the other day, and she sent a bunch of people that had applied an email and said, hey, we got some slots open. Go ahead and sign up. And they filled up right away. Of course, so she gets this email from someone who's kind of sad going, hey, all the slots are full. We're like, yeah, there's a whole bunch of you out there listening to this that want to do this. So I guess it's a little bit competitive to get on this show now, but we still appreciate you coming on because it's not only inspiring to us to keep us going here at the White Coat Investor Studios, but we know it's inspiring to so many of you and it's exciting to see what you all are accomplishing and more importantly, what that allows you to do in your lives. Right. Jasmine is a relatively young gyne onc doc. I don't know how many of you get this opportunity. I get it all the time to tell people they have cancer and I'm the first doctor to tell them I'm diagnosing their cancer. And of course, when I first diagnosed it, we don't know for sure that it's cancer sometimes or exactly what kind of cancer it is. Nobody's biopsied it yet or anything. But there's something that shouldn't be there, you know, and it's causing their symptoms or it's just an incidental finding on imaging that I did for some other reason. And I got to sit down with them and their family and talk to them about cancer. And I cannot tell you how grateful I am to have people out there, oncologists and general surgeons and gynecologic oncologists, whatever, whoever you are that's taking care of these people that I'm now sending to you, I'm sure thankful for it. And I know they're thankful for and their families are thankful for it. It's terrifying to be given these diagnoses. You know, when I got scanned for falling off a mountain, I had an incidental loma, a little adrenal thing like we see so often when we do imaging. And of course it's turned out to be nothing. And I knew it was almost surely going to be nothing. But there's still a little bit of anxiety as you go to your follow up CT scans and your labs and you know, I had to see endocrine and those sorts of things. There's a little bit of anxiety and it's nice to know that there are folks out there like you spent four years in college, did a gap year or two, spent four years in med school, went to residency for four years, did a fellowship or two year. Right? I mean, you've dedicated your life to something that's really important. So thank you for doing that, and I hope you are experiencing the joy that comes from really being able to help people on some of the worst days of their lives. All right, I promised you at the beginning we're going to talk about mutual funds. Let's do that, and then a few more words afterward. A mutual fund is simply pooling money together with other investors in order to invest together. By doing that, there are a number of advantages, One of which is you get professional management of the portfolio. You know, whatever you're investing in, whether it's stocks or real estate or bonds, you get a professional manager. You also benefit from some economies of scale. And as long as you're investing in a true mutual fund that's publicly traded, you get daily liquidity, and you can get out of that fund and turn your money into cash any day the market is open. One of the main reasons people invest in mutual funds is simply because you get instant diversification. Instead of buying one stock at a time, you could be buying thousands of stocks at at a time. And so your investment turns out to be much more diversified. And this is the reason why mutual funds are the main investment in 401ks and HSAs and 529s. And the vast majority of investors do and should use mutual funds for most of their investments. What makes it mutual? Well, it's just multiple people working together, right? That's why it's called a mutual fund, because we're working together for the benefit of. Of everybody. There are two main strategies when it comes to mutual funds. One is an active strategy, and the other is a passive or index strategy. When you have an active mutual fund, the manager is trying to beat the market. They're trying to have higher returns and lower risk than the market itself has. And it turns out that's kind of hard to do because there's so many people out there trying to do it, making the market so effective, efficient when it comes to pricing stocks or bonds or whatever, that it's actually pretty hard to beat the market. And so for the last 50 years or so, the advent of passive funds has come along. And the strategy with a passive fund is just to buy all of the stocks and get the market return. And this is not that hard to do. So it doesn't take a lot of resources or expenses to do it and eliminates the risk of underperforming the market. And it turns out when you look at the academic studies, that risk is actually pretty high over the long term. Even before tax, 90 to 95% of the actively managed mutual funds underperform a strategy of just buying all the stocks. And so savvy investors generally use index funds, these funds that just buy all of the stocks in order to be successful. Now there are closed end funds and open end funds, and almost every mutual fund you've ever heard of is an open end mutual fund. But there are a few closed end mutual funds out there. There's really not a lot of reason to use them. But the difference between an open end and a closed end fund is all the money's raised and put into a closed end fund at the beginning. Whereas with an open ended fund, the fund can be bigger or smaller over the years, typically gets bigger as more contributions are made to it, at least if it's successful. And so that's typically the fund structure you see out there these days. A much more common thing to see is an exchange traded fund. Now with a traditional mutual fund, you can't trade it during the trading day. If you want to get out of it or you want to get into it, that happens at 4pm Eastern every day. With an exchange traded fund, you can get out any minute the market is open. You can get back into it a minute later if you want to. That has some advantages for traders, but there are a few advantages for an exchange traded fund, even for long term buy in holders, particularly in a taxable account. Due to the way the shares of these exchange traded funds are made, there's an opportunity to flush some of the capital gains out of the fund to people that put these shares together, called authorized participants. And so, all things being equal, you're generally better off with an ETF type structure if you're investing in a taxable account. Now, what makes for a good mutual fund and what makes for a bad mutual fund? Well, the first thing to look at is the underlying investments, right? What are you actually investing in and do you want to be investing in it? Right. For example, if you want to be investing in US Stocks, you can use a simple total Stock Market index fund. But if you wanted to invest in international stocks instead of US Stocks, that's a terrible fund to invest in. So you got to look at what is actually being purchased by the fund manager. That's the first thing to look at. Anytime you compare a mutual fund and you want to make sure they're buying investments that you want to be invested in, the next thing to look at is really who the manager is, what their track record is and what strategy they're using. Right. If it's an index fund, their strategy is just to match the market. And you can look back over the last few years and just make sure they're doing that. It's not that hard to do, but there's a few index funds out there that aren't all that good at doing it. The main ones you see from Vanguard and Schwab and Fidelity and BlackRock, they do just fine. And you're fine to use those. But if you're considering using an actively managed fund, you better take a real careful look at that fund manager, what they're trying to do and how good they are at doing it. All of a sudden then the track record matters a lot. Even though there's no guarantee if they've outperformed in the past that they will continue to outperform in the future. Perhaps the most significant indicator of future mutual fund performance is the cost of the fund, the fees being charged to you. The more fees you're charged, the lower your performance is, what the studies show. And so you want to make sure you're keeping your costs low. And the truth is, with the advent of very low cost index funds these days, investing is essentially free. So if you're going to pay more than a handful of basis points, a Basis point is 0.01% of the money in that fund that year. If you're going to Pay more than 0.05 or 0.0.1, you've got to really be convinced that this fund and its strategy is worth the additional expenses that you're paying. Don't ignore fees. Don't ignore the costs of investing. If they're not close to zero, you need to make sure you're getting your money's worth out of those. So mutual funds are just a way to work together with other investors to get a diversified liquid investment that's going to help you get to your financial goals. Okay, I hope that was helpful. To learn about mutual funds. Don't forget about the bulk books again. Booksitecoatinvestor.com is where you email if you want to send some white coat investor books. And you can do any of our books, right? We'll send you student books, we'll send you the original book boot camp. We can even do asset protection books. If you think you got 25 people that would benefit from that, we can do any of our books. And that includes in the future because we've got some other stuff coming down the pipeline you might be interested in. If you're a high income physician, you already know how hard you work for every dollar. The question is, how much of it are you actually keeping after taxes? Gelt is a tax firm focused on proactive tax strategy. They're guided by expert CPAs and optimized via in house AI tools. They work with physicians and practice owners to use the tax code more intelligently so your entity structure, deductions and income timing all work together. To help you keep more of what you earn as a White coat investor, visit whitecoatinvestor.com Gilt Book a free strategy intro and get 10% off your first year with Gilt. It's time to start using your tax plan as a lever for growth. All right, that's it for today. Thanks for being here. Keep your head up, shoulders back. You've got this. You're going to win this single player game. We'll see you next time on the Milestones to Millionaire podcast. The White Coat Investor Podcast is for your entertainment and information only and should not be considered financial, legal, tax or investment advice. Investing involves risk, including the possible loss of principal. You should consult the appropriate professional for
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specific advice relating to your situation.