MtoM #271: Dual Physician Couple Pays Off $527K Student Loans in One Year

Summary

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White Coat Investor Podcast – Milestones to Millionaire #271

Dual Physician Couple Pays Off $527K Student Loans in One Year

Date: April 20, 2026
Host: Dr. Jim Dahle
Guests: Drs. Matthew and Casey Wright, hospitalist and emergency medicine physician in Tennessee

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Episode Overview

This episode spotlights a remarkable milestone: a dual physician couple, Dr. Matthew and Dr. Casey Wright, who paid off $527,000 in student loans just one year after finishing residency. Host Dr. Jim Dahle dives into the couple’s financial journey, exploring their strategies, mindset, and the impact of big decisions, while surfacing actionable advice for other high-income professionals facing similar debt.

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Key Discussion Points & Insights

1. Introduction to the Couple & Their Background

[02:03 - 02:27]

• Matthew is a hospitalist; Casey practices emergency medicine. Both are less than two years out of training and live in Tennessee.
• They completed medical school and residency together.

2. The Student Loan Payoff Milestone

[02:38 - 02:58]

• In one year, they paid off $527,000 in combined student loans.
• Dr. Dahle notes: "I don't know if that's a record, but it's pretty awesome." (02:45, Dr. Dahle)

3. Financial Backstory & Family Support

[03:55 - 05:41]

• Matthew benefited from a brokerage account his parents established at his birth (~$35,000 by med school); parents also paid his med school housing costs by using the account for a down payment.
• “They viewed it kind of as an investment in my future and their grandkids’ future.” (04:17, Matthew)
• This support kept Matthew's med school loans manageable (~$187K); Casey, without such support, owed ~$340K.
• Both attended the same medical school.

4. Couple's Early Financial Conversations and Education

[06:13 - 07:13]

• Discussed debts early in their relationship, no awkwardness since Casey read Dr. Dahle’s book and started learning finance in med school.
• Matthew’s parents provided ongoing financial education; Casey learned through WCI resources:
  “The majority of what I’ve learned about finances has been through him kind of teaching me stuff and reading your book and listening to your podcast.” (18:32, Casey)

5. Residency and the Student Loan Payment Pause

[07:33 - 08:15]

• During residency, made no student loan payments due to COVID-19’s federal payment/interest pause.
• Saved incoming money instead of paying loans, maximizing benefit from 0% interest.

6. Transition to Attending and Initial Planning

[08:34 - 09:29]

• Not strict budgeters; Matthew checked accounts often, both lived below their means.
• Spent 10-15% of income, saved the rest in a high-yield savings account.

7. Setting and Accelerating Goals

[09:29 - 10:06]

• Initially set a two-year payoff goal; after a brother’s challenge, aimed for—and achieved—a one-year payoff.
• "He told me he didn't think I could do it. And I took that personally. I said, I'm gonna do it in one year." (09:54, Matthew)

8. The Actual Payoff Strategy

[10:18 - 10:55]

• Kept everything in high-yield savings throughout the first attending year, spent only on essentials, then made lump-sum payoff just before interest restarted.
• Paid loans off with essentially one (or two) big checks: “We paid it off.” (10:51, Matthew)

9. Lifestyle & Spending During the Payoff Year

[12:55 - 14:11]

• Lived in a large rented house ($3,565/month), had two young children, contributed to 529 plans, and still managed a small Disney vacation.
• Total annual spending estimated at ~$150,000, including all expenses.
• Combined pre-tax income: ~$775,000 for the year, achieved by working full-time (and then some): “I work 165 hours [a month].” (14:03, Casey)

10. Avoiding Burnout & Sustainability

[14:16 - 14:27]

• Both agreed it was manageable with their clear goal: “Now we can kind of taper back on the aggressive saving and slowly start to give ourselves some raises here.” (14:21, Casey)

11. Post-Payoff Plans and Future Goals

[14:53 - 17:15]

• Transitioned from debt payoff into saving for a down payment and retirement accounts.
• “Between September and December we were fortunate enough to max out both of our 401ks and IRAs which we converted to Roth.” (15:00, Matthew)
• Next aspirations: buy (and eventually build) a home, achieve financial independence, save for children’s education.

12. Advice for Med Students and Colleagues

[16:23 - 18:32]

• For students: Live as frugally as possible, treat loans as real money not “monopoly money,” and avoid the “big doc” lifestyle when transitioning to an attending.
• For colleagues: Automate savings (“pay yourself first”) and always spend less than you earn.
  “Living on less than what you make... just has to be a pillar of your financial health.” (18:00, Matthew)

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Notable Quotes & Memorable Moments

• “What did you guys eat for the last year?”
  “Beans and rice.” (03:19, Dr. Dahle / Casey, jokingly)
• “They viewed it kind of as investment in my future and their grandkids’ future.” (04:17, Matthew)
• “I think the big thing I try and impart on them is… living frugally and living on less than what you make.” (18:00, Matthew)
• “Honestly, the majority of what I’ve learned about finances has been through him… and listening to your podcast. This isn’t supposed to be a plug…” (18:32, Casey)
• “Now we can kind of taper back on the aggressive saving and slowly start to give ourselves some raises here.” (14:21, Casey)
• “Congratulations on figuring this stuff all out early and just taking those student loans in the corner and dropping an anvil on them.” (19:07, Dr. Dahle)

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Important Timestamps

| Time | Segment | |--------------|--------------------------------------------------------------------------------| | 02:03-02:27 | Introductions: Matthew & Casey’s background | | 02:38-02:58 | Announcement of $527K student loan payoff | | 03:55-05:41 | Parental support, brokerage account, student loan totals | | 06:13-07:13 | Early debt conversations & financial education | | 07:33-08:15 | Residency: student loan pause utilized for saving | | 08:34-09:29 | Approach to budgeting and discipline | | 09:29-10:06 | One-year payoff goal, motivation from healthy sibling rivalry | | 10:18-10:55 | High-yield savings & lump-sum payoff strategy | | 12:55-14:11 | Spending breakdown, income, and work hours during payoff year | | 14:16-14:27 | Burnout, sustainability, and future adjustments | | 14:53-17:15 | Retirement saving, home purchase, future financial goals | | 16:23-18:32 | Advice for med students and colleagues | | 18:32-19:07 | Casey’s learning journey & gratitude for financial resources |

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Language & Tone

• The conversation is candid, humorous in places, and practical—emphasizing real-life decision-making without sugarcoating the discipline required.
• Both guests are open about privilege, hard work, and the realities of high-income young professionals tackling debt.

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Practical Takeaways

• Live Below Your Means: Even with high incomes, aggressive saving is possible—and powerful—when you avoid lifestyle inflation.
• Leverage Opportunities: Policy changes (e.g., COVID loan pause) and family support can have outsized impact if used strategically.
• Automate and Focus: “Pay yourself first” is key, as is focusing savings toward a major goal for a short period.
• Start Learning Early: Financial literacy from books, podcasts, and trustworthy resources can profoundly influence big outcomes.
• Celebrate Small and Large Wins: Motivation can come from deadlines, peer challenges, or simply the satisfaction of financial progress.

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Listener Action

If you're in a high-student-debt profession:

• Design a financial plan as early as possible, talk openly about finances with your partner, and seek out educational resources.
• Focus on maximizing savings during any federal loan interest moratoria and optimize your income and expenses accordingly.
• Don't be afraid to set ambitious goals—short-term sacrifice can enable lasting financial independence.

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Transcript

[A]

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

[B]

This is Milestones to millionaire, podcast number 271. This podcast is sponsored by Bob Baiani at Protuity, an independent provider of disability insurance planning solutions to the medical community nationwide and a longtime WCI sponsor. He specializes in working with residents and fellows early in their careers to set up sound financial and insurance strategies. If you need to review your disability insurance coverage or get this critical insurance in place, contact [e-mail] Protuity. You can email infoortuity.com, you can call 973-771-9100. Hey, it's annual survey time from now until May 6th. Please, please, please take our annual survey by going to whitecoatinvestor.com this information really helps us improve the podcast, the blog, the newsletters, the conference, everything we do. It also helps us gather some information anonymously about the entire WCI community that I use to put together a blog post about you. And that's always a lot of fun to see how all of us are working together to move toward our financial goals. So this is so important for us to help us do what you need done that we'll actually bribe you to fill it out. You get a chance if you fill out the survey, you get a chance to receive a T shirt. And in fact, five people will win a WCI online course totally free. So please help us know how we can serve you better, how we can improve WCI for you and how your financial life is going by filling out the WCI survey for 2026 at whitecoatinvestor.com WCISurvey all right, we've got a great episode. Stick around. Afterward, we're going to talk for a few minutes about expense ratios. Let's get our guests on the phone. My guest today on the Milestones to Millionaire podcast are Matthew and Casey. Welcome to the podcast, guys.

[A]

Hey, thanks for having us.

[B]

So let's have you introduce yourselves to the audience. Let's talk about where you live in the country, what you do for a living, how far you are out of training.

[C]

I'm Matthew Wright. We live in Tennessee and I'm a hospitalist.

[A]

And I'm Casey, live in Tennessee with my husband Matthew, and I'm a emergency medicine doctor.

[B]

Okay, so a two doc couple. And how far are you out?

[A]

Just under two years.

[B]

So same. You both came out at the same time. Okay, now that everybody knows where we're standing, I want you to Tell them about what milestone you just accomplished because I think it's pretty impressive.

[A]

So we paid off our student loans in one year and it was just a little bit over 500,000.

[B]

Yeah, $527,000 in student loans in one year. I don't know if that's a record, but it's pretty awesome.

[A]

Okay, thank you.

[B]

So obviously, big shovel, right? It's a 2 doc income, but I know what the average hospitalist makes, I know what the average emergency doc makes, and I know about what the tax bill is on that combined income. And when I Compare that to $527,000, they're awfully similar. So what did you guys eat for the last year?

[A]

Beans and rice.

[C]

I don't think we. I don't think we went without. We probably ate a lot at the hospital because we worked a lot, but I don't think we went without. I mean, if we wanted steaks or things like that, we had it.

[B]

All right, give us the story. I mean, somehow you guys got inspired to do this in one year. And so there had to be some conversations about it, there was some planning. Give us all the details. I mean, how much money did you make in that year? How much did you work in that year? How much did you spend that didn't just go to the student loans? Give us the details.

[A]

Matthew had a small amount of some savings from when he was about 18 or so. He started an account.

[C]

But my parents actually started a brokerage for me when I was born and they bought somewhere around $2,000 worth of AT&T stock back in the early 90s. And then they didn't put anything in it for the rest of the time. When I was 23 or 24 going into med school, it had grown into

[B]

about $35,000 still invested just in AT&T stock.

[C]

I think they maybe sold it around 2012 and put it in the S and P. So it had a couple of years S and P growth, but for the most part it was AT and T for the whole, the vast majority, I want to say that was around $20,000 when they moved it. And then over the next six years I think it grew to 35. Fair disclosure that my parents helped me a lot, like with just bills and everything in college and medical school. They viewed it kind of as investment in my future and their grandkids future. So they were helping me with, with rent in med school and they decided it'd be better to own a place in med school. So they said, how about you liquidate the money in your brokerage account, which at the time was $35,000, use that as a down payment, and we'll pay the mortgage instead of paying rent. And then at the end of that time, we will get back our what we've paid in the mortgage in equity, and you'll get back your deposit. So my first two years of med school.

[B]

So they paid the mortgage?

[C]

They paid the mortgage.

[B]

All right, That's a pretty good deal. I'd probably take that deal.

[C]

They helped a lot. Tremendously. So that helped also keep my loans down because I only had to take out money for tuition, whereas KC took out money for everything.

[B]

So what'd you owe when you came out?

[C]

So I was 187 and KC owed 340.

[B]

Okay. Yeah. Quite a difference. Were you guys at the same school?

[A]

Yes.

[B]

Okay, so same school, huge difference in loan amount. And that's what happens when you're getting help from parents versus, you know, Casey. You must have borrowed the whole thing, right?

[A]

I borrowed everything that was offered to me.

[B]

Can I have another, please? Right, yeah. Okay. Very cool. All right. And so when did you get married? At what stage?

[C]

4th year of med school.

[A]

Right. Yeah, I just. At the end of medical school. So my last name would be. Would be his last name when I graduated. Not to do all that.

[B]

Yeah, that is convenient. Okay, so when did the conversation about how much you each owed in student loans come up for the first time?

[A]

Pretty early, I think. Yeah, so we. We met. We were. We were placed in the same medical school group together, like, and then we in first year, and then we just pretty much started dating shortly after that.

[C]

And I think financially, actually. Casey discovered your podcast sometime in med school or your book. And we. We had kind of discussed some financial stuff before that, and my parents educated me a lot on finances, but I don't think she got that same kind of level. So she actually read your book, and then that was at the end of medical school. So we were kind of on similar wavelengths as to what we wanted to do.

[A]

Right, yeah.

[B]

Okay, so no, no awkward conversation when you found out she owed 340?

[A]

No.

[C]

No.

[A]

He knew most people owed more because they owed it from college. I luckily had, like, need based loans or grants in college. I didn't owe any undergraduate.

[B]

Okay, so you guys finished school. You couples match, I assume?

[A]

Yes.

[B]

Okay, so you went to the same place, did your residencies, and what'd you do about student loans during residency?

[C]

Fortunately, you know, regardless of any of your feelings about it, the student interest loan. Pause. They placed on everything. We didn't have to pay anything in, so we ended up just saving the money.

[B]

So you did nothing with student loans during residency. Okay, that worked out very well for you. But you decided you didn't want to go into, you know, a 501c3 job. You didn't want to go for public service loan forgiveness. You were going into private practice and pay these off. So did you refinance them at some point?

[A]

No, we never had to with the COVID pause. We looked into it and then you

[B]

liked your 0% rate.

[A]

We didn't need to adjust that at all.

[B]

Okay, so now take us through. You guys are like, okay, we read the white coat investor book. We listened to podcast. We got a little bit of money. We're going to soon start making a whole bunch of money next year. Tell us about your planning for that first year of your attending life.

[C]

So we obviously kind of did what you said. We did definitely get an increase in our kind of living expenses and allowance that we let ourselves spend. And we are not budgeters. We don't have a written budget. I think I'm definitely much more of numbers, and I look at the bank accounts very frequently. Casey does not, but she is still very frugal. So we really don't spend that much. I mean, we did have a significant increase in what we were spending, but our percentage of income was still, I want to say about 10 to 15% of what we made, we spent. And then the rest we put in a high yield savings and did that for the whole first year.

[B]

Okay, so it doesn't sound like there was a ton of planning for the first year. Was this. You just happened to be really frugal people, is that right?

[C]

Well, we had a goal, actually. We did have a goal. And our goal was to pay it off as soon as possible. I kind of thought it was two years was my reasonable goal. I kind of got on and did the interest rate calculations. When Trump got reelected, if he was going to increase or start back the interest and how long it would take to pay it off. And I said two years is what our goal was. But I have him talk to my brother, who's a computer engineer, and was telling him about that, and he told me he didn't think I could do it. And I took that personally. I said, I'm gonna do it in one year.

[B]

And, you know, I paid him to tell you that. Right? That's awesome. So, okay, so what was the process? What'd you do? You just, like, wrote a big check every Month or what?

[C]

No, we wrote a. We got our first paycheck in September of 24, and we put all of it minus what we had to pay for expenses.

[A]

Rent. Yeah, rent.

[C]

Yeah, that in the high yield savings. And we did that for an entire year. And at the end of the year, this past September, in 2025, they were saying that the interest rate was going to start back.

[B]

Oh, because you were still a zero percent.

[C]

We were. So I actually wasn't. I wasn't going to pay until it, until it started back up.

[B]

They started to back up when they started up. You know, interest again. Did you have enough in there to pay off the student loans?

[C]

We had it all. We paid it off.

[B]

So you wrote one check?

[C]

One check?

[B]

Yeah, two maybe, I guess. But yeah, very cool. Very cool. And then just wiped them out. Stick them in the corner, dropped an anvil on them. That's my favorite number of student loan payments.

[A]

It was definitely a big weight off our shoulders for sure.

[B]

You know, it's been interesting to watch this, right, because obviously I was podcasting, blogging before this student loan holiday and to see this thing come in and get extended and extended and extended. And Andrew Paulson and I, right, he's one of the founders of studentloanadvice.com, we would look at each other and go, do people understand what's going on here? This is a huge boon for doctors. This is massive. I mean, Doctors are saving $60,000 a year in interest on this. They're gonna get loans forgiving after having only made $10,000 in payments. It's just this huge boon. And now it's been fun doing these milestones after it's over and seeing that indeed, there were a whole bunch of doctors that recognized that as well. And so that's pretty cool. Well, congratulations to both of you.

[C]

Has the interest started back up on them or.

[B]

You know, I don't know that I have all the exact details. I think interest for the most part is back for everybody on student loans at this point, though.

[C]

So I used to listen to all those episodes and then once we paid it, I haven't listened to it.

[B]

Yeah, it still feels like it's changing every two or three months, but it's actually stabilizing quite a bit. And I think everybody's paying interest now because people are getting back into, into income driven repayment programs and changing them and refinancing student loans. So I think the game is back on now. But it sure was beneficial to have game off for three and a Half years, without a doubt. Okay, well, that's pretty awesome that you guys were able to do that. Do you have any idea what you spent during that year on your lifestyle? What you paid for rent or mortgage and what you spent on vacation and food and all that stuff? About how much did you guys spend that first year out of a, out of training?

[A]

Our rent. We live in a pretty nice house that we rent. It's like a six bedroom house. The rent was like, is like 3,000 something a month.

[C]

35.

[A]

Yeah, 35, 65. So we spent that. We also contributed. Well, we have two small children, so we contribute to their daycare and to their 529s too. So that's some spending that we do. But we did go on a Disney vacation during that time that we paid for.

[C]

Small one.

[A]

Yeah, small one. And then we had some free tickets from the 90s.

[B]

So what, a hundred, 150,000, something like that, maybe?

[C]

No, I think it was less. I, I'd say it was probably about 8 to 9,000amonth, maybe not including rent. Sorry. So, yeah, maybe 12 including rent.

[B]

Very, very cool. So $150,000 or so. Which, and, and about what was your combined income for that year? It sounds like you worked pretty hard. Was that deliberate to deliberately be working hard that year?

[A]

Yes, yes.

[C]

7. 75, I think was our 775 between

[B]

the two of you. So, you know, that's, that's not outrageous for, for a hospitalist and an emergency doc, but it's definitely working full time. Plus.

[A]

Yes, yes, I worked 100. I work 165 hours.

[B]

Yeah, that's a lot for an emergency doc. That's like, you know, 1.3 FTEs, I'd say.

[C]

Yeah.

[B]

Okay. Well, did you feel burned out during that year?

[A]

I wouldn't say so, no. Especially with our goal in mind. And now we can kind of taper back on the aggressive saving and slowly start to give ourselves some raises here.

[B]

Yeah, so I mean, to pay this off in a year, you were basically putting. I don't know what that works out to. I'd have to do the math. $30,000 plus toward them, something like that, right? 35. 40,000, maybe.

[C]

Casey, actually, she had two months off too, for attorney leave. Yeah.

[B]

So where is that 35 or $40,000 a month going now? That is not going towards student loans.

[C]

So we are planning to buy a house. We've kind of started the process.

[B]

So you're saving up a down payment?

[A]

Correct.

[C]

Actually, one of the big things that we did was we and maybe this isn't recommended, but it was just with our goal. We did not contribute towards retirement during that 12 month window. Now between September and December we were fortunate enough we were able to max out both of our 401s and IRAs which we converted to Roth.

[B]

So it went from paying off debt to going toward retirement savings.

[C]

And then so we had about in terms of capital, maybe $10,000 at the end of December. And then since then we've saved and we have enough for a down payment on a house that we're planning to move into in May.

[B]

Well, you certainly learned the power of focus to focus on one goal and how powerful that was. Do you have any regrets about that? About focusing on the student loans until they were gone or was it such a short time period that it was no big deal?

[A]

I don't have any regrets about it because those are now gone and eliminated from our stress. And we don't have to worry about the interest rate. That was never a thing to have to worry about refinancing or all that just interest accruing every month.

[B]

Kasey, I want to ask you this in particular. Somewhere out there there's a pre med or a first year who is just realizing what it's going to cost them to borrow the entire cost of medical school. What advice do you have for them?

[A]

We mean while you're in school it's not really much you can do about it. Just try to live as frugally as you can and don't blow it all, you know. Cause it kind of feels like monopoly money when you first get it into your account every, every semester. But kind of the same thing that we did afterwards. Just don't live like a big physician lifestyle, you know, like when you're attending. Just kind of focus for those one to three years and save it and pay it off as early as you can because it's not, it's not going to go away. It's just going to get more and more stressful.

[B]

All right, well what's next for you guys? I mean you're saving up a down payment, you're saving for retirement. What are your next financial goal or goals?

[C]

Ultimately we want to get a little bit more and maybe buy some land and build a house in also kind of save like stuff for retirement. Achieve financial independence would be a good goal.

[A]

Yeah, I agree. Yeah, we're, we want to, we want to pay for our kids college too. So we're saving for Both, both their 529s and we want to be Able to give that to them and yeah, build a house. Main goal, dream house.

[B]

So you obviously learned a lot about managing money and became very disciplined about it. If someone was to ask you, a colleague that heard this and cornered you in the ER on the wards next week or next month or whatever, and says, I'd sure like to do what you guys did, how'd you learn all this finance stuff? What would you tell them?

[C]

Because I do actually have discussions with my colleagues about it. I was telling most of them today. A lot of them listen to your podcast. I was coming on here, so they were excited for that.

[B]

Shout out to all of them.

[C]

Right. I think the big thing I try and impart on them is automatically saving. And again, we don't really do this, but automatically saving just 20% straight off the top. If you're not good about controlling your, if you'll spend whatever's in the account is maybe controlling it straight from the jump, but definitely just also living frugally and living on less than what you make. I think it just has to be a pillar of your financial health.

[B]

Anything you add to that.

[A]

Casey, honestly, the majority of what I've learned about finances has been through him kind of teaching me stuff and reading your book and listening to your podcast. And this isn't supposed to be a plug, but.

[B]

Or I guess we'll let you, we'll ask you to plug WCI anytime you want.

[A]

So thank you very much. Honestly, that's, that's really. I, I, when I grew up, I didn't really have a lot of financial education. I didn't grow up in, like, a wealthy household or, you know, somewhere that had a lot of savings and a lot of financial, I guess, literacy, but kind of learned that throughout the whole process, really, starting in medical school and through now.

[B]

Well, very cool. Congratulations to both of you. Matthew and Casey, you've accomplished something that is very remarkable that will pay dividends for the rest of your life. Congratulations on figuring this stuff all out early and just taking those student loans in the corner and dropping an anvil on them. $527,000 thousand dollars in student loans out. Your first year out of training. You should be very proud. Thank you for coming on and sharing your success with others to inspire them to do the same.

[A]

Thank you. Thanks for having us.

[B]

Hope that was helpful to you. It's always fun to see doctors just knock it out of the park. And these two really did. I mean, $527,000, that's a lot of student loans. And they crushed them. Absolutely crushed. Them by working hard, being thrifty, and just writing big checks. You know, it's amazing how well that works if you just pack the money away and then you know you've got enough money to pay off your student loans very rapidly. The fun part about it is if they kept doing this right, they're talking about saving for a house and afterward I'm like, so are you saving a down payment or are you saving up for the whole thing? With that sort of savings, you could buy your house in most places in a year and a half, two years, something like that, just with cash. And imagine the freedom you would have. No student loans, right? No practice loans because it's an emergency doc and it's a hospitalist. No house payment. Can you imagine what your financial life would look like if you just got rid of all the payment? It's pretty awesome, right? Pretty awesome.

[D]

Hello, my name is Tyler Scott with White Coat Planning and today Jim has asked me to come share the principle of expense ratios with you and make sure we have a good understanding of that term. Both individual investments and the accounts that hold those investments can have all kinds of fees to be aware of. There are sales loads, broker commissions, advisory fees, account fees, management fees, redemption fees, transaction fees, 12 B1 fees. It's a cavalcade of fees out there. Today. We're just going to talk about one of those types of fees, the one I think you've probably read about and heard about the most when you read on White Coat Investor. And that relates to investment choices. And that is where we arrive at the term expense ratio. The expense ratio is a measure of a mutual fund or exchange traded fund's operating cost relative to its assets. It's determined by dividing a fund's operating expenses into its net assets. Operating expenses reduce the fund's assets, thereby reducing the return to investors. Because the expense ratio is deducted from the fund's gross return and paid to the fund manager, you never have to calculate the expense ratio. It will always be provided in the fund's prospectus. You can also just Google it if you know the ticker symbol for the fund in question. It's available on analytics sites like Morningstar or Yahoo Finance. Good and ethical 401k custodians will just provide the expense ratio right on the statement or website where you're looking at the investment options. In financial conversations, you'll sometimes hear expense ratios expressed as basis points or BIPs for short, written out BIPs is BPS. When I say basis point, that is referring to 1/100th of a percentage point. It is the cost of the investment expressed as a percentage. If you have an investment that has an expense ratio of 0.12%, that's the same as saying the fund has an annual fee of 12 basis points. That means you owe 0.12% of the value of that investment each year to the firm that created the investment, like Vanguard or Fidelity. So if your investment is worth $100,000, you owe them 120 bucks for the year. 12 basis points is a very low cost fund. Sadly, most mutual funds and exchange traded funds out there are not low cost funds. It's not uncommon for me to review a client's list of available funds in their 401k, 403b or 457 and see that all of the options have expense ratios of 1% or higher. In other words, the fees are 100 basis points and up. When I was working at a public health dental clinic in Oregon, we had funds in our 457 with 240 basis point fees. That is a ridiculous 2.4% expense ratio. If I had $100,000 in that fund, they would charge me $2,400 each year, every year, just to own the fund. Now imagine my investment returns for the year in that fund were 5%. That means the expense ratio would consume a whopping 50% of my investment return for the year. I'd had to give away half of my growth to the underlying investment. Thus, keeping expense ratios in your investments low should be a goal for any savvy investor. Fortunately, there's been a lot of pressure to lower expense ratios since John Bogle started the index fund revolution at Vanguard in the mid-70s. Today there are many wonderful tax efficient, highly diversified low cost funds available at places like Vanguard, Fidelity and Schwab. Fidelity even offers their so called zero funds that have an expense ratio of zero. Funds like this can be compelling to people once they learn about expense ratios. But some folks can become a little obsessive about whether a fund costs 7bps or 9bps. Don't worry about that. Don't be that person. Jim often talks about anything below 20 basis points doesn't really matter. The goal is not to go from nine basis points to seven. The goal is to go from 145 basis points to nine. If you don't know the expense ratio on the funds you're using, go find out. A good investor always knows what they're paying for their investments.

[B]

This podcast was sponsored by Bob Bayani at protuity One listener sent us this review. Bob has been absolutely terrific to work with. He's always quickly and clearly communicated with me by both email and or telephone, the responses to my inquiries usually coming the same day. I have somewhat of a unique situation and Bob has been able to help explain the implications and underwriting process in a clear and professional manner. Contact Bob by emailing infoprotuity.com by calling 973-771-9100 or by simply going to whitecoatinvestor.com Protuity either way, get that disability insurance in place today. All right, that's the end of our episode. Hope you enjoyed it as much as we did. Keep your head up and your shoulders back. We'll see you next time on the Milestones to Millionaire podcast.

[A]

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 specific advice relating to your situation.