MtoM #274: How This Doctor Became Mortgage-Free Using Geographic Arbitrage

Summary

White Coat Investor Podcast: Milestones to Millionaire Episode #274

How This Doctor Became Mortgage-Free Using Geographic Arbitrage

Date: May 11, 2026
Host: Dr. Jim Dahle
Guest: Chelsea, hospitalist and mother of eight

---

Episode Overview

In this episode, Dr. Jim Dahle sits down with Chelsea, a hospitalist from the Midwest, to explore how she and her husband became mortgage-free by leveraging geographic arbitrage. The conversation delves deep into their journey as a large family navigating early medical careers, student loans, a strategic cross-country move, and the choices that led them to pay off their mortgage while maintaining a strong focus on family values. The episode is filled with practical insights on managing finances with a large family, the importance of prioritizing values, and using location to your financial advantage.

---

Key Discussion Points & Insights

1. Chelsea’s Background and Milestone (03:40–04:02)

• Chelsea is a hospitalist, 8.5 years post-residency, living in the Midwest.

• Milestone: Paid off their mortgage in the same year they welcomed their eighth child.

  “We are celebrating that my husband and I paid off our mortgage in the same year that we welcomed our eighth child.”
  — Chelsea [03:54]

---

2. Building a Family During Medical Training (04:11–05:57)

• Timeline: First child in fourth year of med school, next two in residency, continued growing since.

• Financial Challenges:

  • Husband (an attorney) experienced career instability after law school and initially became a stay-at-home dad.
  • Both prioritized being with their children over full-time outside employment.
  • Lifestyle hacks: old cars, secondhand kids’ clothes, driving vacations, modest meals, and minimal dining out.
  • They both work part-time to ensure a parent is always at home.

  “We decided early on that we wanted to raise our own kids and not rely on full-time childcare. So that meant my husband stayed home while I was in residency, and we have both worked part time since I got out of residency.”
  — Chelsea [04:57]

---

3. Achieving Mortgage Freedom via Geographic Arbitrage (06:25–09:10)

• Original Mortgage: $430,000 (+ $100,000 for extra land = $530,000).

• Student Loans: Chelsea on Public Service Loan Forgiveness (PSLF), husband on Income-Based Repayment (IBR).

• Geographic Arbitrage:

  • Moved from a high cost-of-living area to the Midwest.
  • Sold prior home for $1.3M (bought for less than half that), bought new home plus 50 acres for $650K cash, eliminating mortgage.
  • Deliberate decision to use geographic arbitrage for financial advancement.

  “We sold our home for more than twice as much as we bought it for seven years later and then moved here. And we were able to pay cash for a home and 50 acres and no more mortgage.”
  — Chelsea [07:38]

---

4. Navigating Student Loans (07:49–08:31)

• Chelsea: At 118 PSLF payments but waiting on buyback approval (stuck in forbearance for 18 months).

• Husband: On IBR; ~$200,000 remaining, planning for taxable forgiveness in 7 years.

  “I have 118 payments and I’m stuck in the SAVE forbearance. I’ve applied for the PSLF buyback about 18 months ago and I’m still waiting to hear back.”
  — Chelsea [08:00]

---

5. Current Financial Strategy & Investments (09:46–11:51)

• Investments:

  • Retirement accounts managed by advisor.
  • Husband trades options/day-trades, is currently conservative due to market volatility.
  • Both work part time; household AGI ~$280,000 (similar to prior high-cost city).
  • Chelsea contributes 12% to 403b, both fund Roth IRAs, and husband 10% to his retirement plan.
  • Took former employer’s pension as payout at age 36 and invested it.

• Work-Life Balance:

  • Chelsea: ~25–30 hours/week at hospital
  • Husband: ~10–15 hours/week at law firm + trading from home

• Financial discipline and lifestyle reflect a value-driven approach.

---

6. Advice for Large Families and New Physicians (12:00–12:57)

• Go for what matters most: Don’t delay family too long for career training if a big family is your goal.

• Open communication: Regular check-ins about work, shifts, and family needs.

• Be open to moving: Consider lower cost-of-living areas; it can be a game-changer.

  “I think open communication with your spouse or partner is super important... and then being open to perhaps moving somewhere where it’s not so expensive to live. It was a life-changing decision for us and I’m really happy with our choice.”
  — Chelsea [12:00]

---

7. Spending Aligned with Values (12:57–14:20)

• Priorities: Time and flexibility are valued above higher income.

• Budgeting Reality Checks:

  • Living modestly allows both parents to work part time and be involved with kids.
  • Rejects the myth that children must cost $300K+ each.

  “I reject that concept... I think it’s kind of choosing. You can choose how expensive you want it to be to raise a kid, I guess is how I would answer your question.”
  — Chelsea [14:20]

---

8. Next Financial Goals & Philosophy (15:10–16:02)

• Building savings: Six months of living expenses in cash is next near-term target.
• FI (Financial Independence): Targeting 25x annual spending (~$4.5 million), recognizes it sounds huge but sees progress.
• Giving back: Philanthropy and generosity remain priorities as wealth grows.

---

Notable Quotes & Memorable Moments

• On 'Expensive' Kids:
  “They tell you what they did not have. $2 million per kid or whatever you just said. And they’re all happy and healthy and good people.”
  — Chelsea [14:20]

• On Values and Sacrifice:
  “My husband basically had to give up his dream of becoming a judge or climbing up high in the legal profession so he could stay home while I was in residency. And I’ve had to make job decisions, you know, to work part time and not seek leadership opportunities because I want to be home with my kids.”
  — Chelsea [12:00]

• On Strategic Moves:
  “If you want to have a larger family, you have to get started at least by the time you’re in residency, if not in medical school.”
  — Jim Dahle [16:04]

---

Host’s Takeaways (16:15–18:05)

• Spend on what you value: Budgeting is aligning spending and values.
• Part-time work: The family’s approach allows for more time and less stress despite a large household.
• Relocation is powerful: Moving for lower cost of living can double equity and reduce recurring expenses.

---

Key Segment Timestamps

• 03:40 — Chelsea’s background and milestone
• 04:11 — Starting a family during training
• 06:25 — Mortgage and geographic arbitrage story
• 07:49 — Student loan status & forgiveness strategies
• 09:46 — Investments and current savings approach
• 12:00 — Advice for big families/aspiring parents
• 14:20 — Children and financial myths
• 15:10 — Next financial targets and philosophy
• 16:15 — Host’s lessons and broader takeaways

---

Conclusion

Chelsea’s story is a testament to the power of deliberate decision-making, aligning spending with values, and being unafraid to change course—geographically and professionally—to achieve financial peace and family balance. Her practical advice offers inspiration and evidence that even for large families with two professional parents, mortgage freedom and work-life balance are attainable.

---

For more resources and information, visit whitecoatinvestor.com.

Transcript

[Chelsea]

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

[Jim Dahle]

This is Milestones to Millionaire podcast number 274. This podcast is sponsored by Bob Baiani at Protuity, an independent provider of disability insurance planning solutions to the medical community in every state and a longtime White Coat Investor 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 just need to get this critical insurance in place, contact [e-mail] Protuity today. You can also email infoprotuity.com or call 973-771-9100. All right, don't forget our CFE 26 course sale ends tomorrow. You can save $100 on that course. This is good for CME, right? So you can use your CME funds to purchase this, but you get 30 plus hours of both financial and wellness sessions from the latest Physician Wellness and Financial Literacy conference. You just have to use code CFE100 and that's valid through May 12th. And I'll tell you what, I'm recording this right after returning home from this conference. I've been underselling this conference and you know, by correlation, this course that's made from the conference. It's awesome. It's an awesome experience. The content, quality, the speakers, the quality of the presentations they put together is so high. The likelihood of you not getting more value out of this course than its cost seems incredibly low to me. Right? You'll probably get way more value than its cost. So consider taking this. I think it's a great use of your CME dollars. I think it's a great use of your time. And if you go to whitecoatinvestor.com CFE and use that CFE 100 code, you'll get it for 100 doll, right? This is 30 plus hours of on demand sessions. It's good for 16.5AMA PRA Category 1 credits and it includes practical physician specific strategies that you can apply immediately. So invest in your financial confidence and your long term [e-mail] CFE. Join us May 14th at 6pm Mountain for a free live class and learn how to go from broke resident to millionaire in five years. Your first 12 months after training are the most important of your financial life. This free information can literally make a difference worth millions of dollars. Over the course of your career, you're going to learn the importance of financial literacy for wealth building. You're going to learn how to manage your student loans and minimize their cost. You'll learn how to prioritize your money and start investing. You'll learn which insurance policies you need to protect yourself and your family. And you'll learn how to reach your financial goals and spend the rest on whatever you like, guilt free. We think this is so valuable to you that we're going to bribe you to attend it. Five attendees will win a free copy of the Fire your financial advisor resident course at $299 value. Go to whitecoatinvestor.comresident to sign up today. Even if you can't make it live, we'll get you a copy of it and you can watch it at your own convenience later. All right, we have a fantastic interview today. I love having unique Milestones to Millionaire episodes, and this one's definitely unique. My guest today on the milestones to Millionaire podcast is Chelsea. Chelsea, welcome to the podcast.

[Chelsea]

Thank you. Happy to be here.

[Jim Dahle]

Tell us what you do for a living, how far you are out of training, what part of the country you live in.

[Chelsea]

I am a hospitalist. I am eight and a half years out of my residency, and I live in the Midwest.

[Jim Dahle]

Okay. And tell us what milestone we're celebrating today.

[Chelsea]

We are celebrating that my husband and I paid off our mortgage in the same year that we welcomed our eighth child.

[Jim Dahle]

Okay. Eight children. That's like more of a milestone to me than paying off a mortgage. Tell us about your family. When did you start your family?

[Chelsea]

I had my oldest during my fourth year of medical school, and then I had another baby during intern year of residency and another baby in my third year of residency. And it's kind of just kept happening.

[Jim Dahle]

Very cool. So talk to us about the financial challenges of raising children throughout med school, residency, and the early attending years, because there's a lot of people out there that are like, oh, this is too busy to have a family at this point. I'm going to wait until I'm a few years out to get started. And then they either run into fertility issues or the only biological clock only allows them to have one or two kids they wish they had more. Tell us about the financial challenge there.

[Chelsea]

Yeah, I mean, that was our original plan, was wait until I was done with training to start our family. But my husband, who is an attorney by training, didn't have a job pan out after law school, and so we decided to get pregnant. And two weeks later he had a job offer. So that was complicating for us. We Just had to prioritize as a couple. You know, we decided early on that we wanted to raise our own kids and not rely on full time childcare. So that meant my husband stayed home while I was in residency, and we have both worked part time since I got out of residency and just kind of set up our lives in a way that one of us is always here with the kids financially. You know, we've always bought old cars and used kids clothes, and our vacations are usually driving somewhere and staying in a hotel for a night or two. And, you know, we eat a lot of beans and noodles and cheap foods. We don't really go out much, but it's worked out. We're really happy.

[Jim Dahle]

Yeah. I assume when you say cheap cars, we're talking some sort of a van here to have eight kids in it, Right? A family of ten. Yeah.

[Chelsea]

Okay. Correct.

[Jim Dahle]

Very cool. All right. But you've done more than just, you know, survived with a family of 10 that was begun during your training period. You've thrived, you've paid off a mortgage. Tell us about the mortgage. How big was the mortgage to start with?

[Chelsea]

It was 430,000. And then we bought some land behind us for another 100,000. So it's 530,000.

[Jim Dahle]

Okay. So it's not a trivial amount of money to have paid off in that period of time. Was this a big priority for you to pay off your mortgage?

[Chelsea]

It was, yeah. We decided, you know, we were both in student loan repayment plans that were. I was doing public service loan forgiveness, and my husband is on ibr. And so we had our kind of little student loan payments every month. And we decided we were just gonna. We never had, you know, a car payment or credit card debt. And we just decided we did not want to be in debt. And so we were going to work hard to pay our mortgage off. But the biggest factor was deciding a year ago to move from where we were living, which was turning into a higher and higher cost of living area, to the Midwest. You know, we did some geographic arbitrage, as you call it, and kind of did the math of how much we could sell our home for and how much we could buy land and a home for out here. And it just made financial sense. And so we sold our home for more than twice as much as we bought it for seven years later and then moved here. And we're able to pay cash for a home and 50 acres and no more mortgage.

[Jim Dahle]

Yeah, that is some pretty serious geographic arbitrage. At least one benefit of having A big family is your IDR payments are very low. Right. Because they're based on.

[Chelsea]

That's true. It helps a lot. Yeah, yeah.

[Jim Dahle]

They're based on, based on your income and they're based on your family size. So low income, big family, you know, the payments get very small. So have you already received your public Service Loan forgiveness?

[Chelsea]

I have 118 payments and I'm stuck in the save forbearance. I've applied for the PSLF buyback about 18 months ago and I'm still waiting to hear back.

[Jim Dahle]

Oh my goodness. So you have been on the cusp of PSLF for a year and a half. How about your husband?

[Chelsea]

I have not been making payments. So he's got just under 200,000, but he's like 13 years into IBR and so we've just decided we're just going to finish seven more years of little payments and then hopefully they go away.

[Jim Dahle]

Okay, so he's going for IBR forgiveness, the taxable forgiveness. Okay, that's an interesting combination of plans between the two of you. Okay, tell me about the other house, the original house and the higher cost of living area. How much was that mortgage?

[Chelsea]

Oh, that was the 430,000 mortgage and

[Jim Dahle]

there's basically, there's no mortgage on the new place. You just, you sold the old house and you moved to the new place. You bought the new one with your home equity.

[Chelsea]

Exactly. Pretty cool. So we were able to sell our old place for 1.3 million and then paid cash for, you know, a 650ish thousand dollar home here and then had a bunch leftover that we just tucked away.

[Jim Dahle]

This sounds very deliberate. You guys had a long conversation about this and decided we're changing where we live because it's going to get us ahead financially. Was that the primary motivation to moving?

[Chelsea]

Yes. I also was not loving the weather where we were, so we moved to tornado country, which I find much more interesting.

[Jim Dahle]

Well, it can be interesting at times. The wind can be a little high every now and then, but.

[Chelsea]

Yeah, yeah.

[Jim Dahle]

Okay, very cool. So tell us about what else you're working on financially. I mean you're, you know, got a plan for the student loans. The mortgage is taken care of already. What do you guys invest in?

[Chelsea]

So most of our retirement accounts are managed by a financial advisor and I'll be honest that I have never taken the time to educate myself on it and then a fair chunk of our savings. My husband is an attorney by training, but also day trades and so he, you know, does options and all sorts of things on the stock market. And right now nothing's invested very aggressively with what the stock market's doing. So we're just kind of sitting in cash and waiting until everything settles down. But I leave a lot of that to him.

[Jim Dahle]

He's been doing that for a while. Or is that a. Or is that a new thing?

[Chelsea]

About a year, a year and a half.

[Jim Dahle]

Okay.

[Chelsea]

Yeah.

[Jim Dahle]

And. And he's. And he's also being a stay at home dad, I'm assuming, taking care of these kids or you guys, you guys are both working part time and splitting the child care duties or how's that working out?

[Chelsea]

Exactly? We both work part time and he works from home. So we. He's putting in probably 10 to 15 hours a week at the law firm, and I'm doing about 25 to 30 hours a week at the hospital.

[Jim Dahle]

Okay, and what, what does that add up to for a household income?

[Chelsea]

We are about 280,000 a year as a AGI.

[Jim Dahle]

Okay, and how does that compare to what you were making when you were in the higher cost of living area?

[Chelsea]

It's pretty similar, actually. We always made between 240 and 280 ever since I finished residency.

[Jim Dahle]

Okay, and what do you end up, you know, putting away every year versus having to spend to maintain your family? I mean, what, what percentage of it's going toward, you know, investments, et cetera?

[Chelsea]

Yeah, I do 12% of my paycheck goes directly to my 403B. And then we fund our Roth IRAs, backdoor Roths every year. And then he puts away, I think, about 10% of his paycheck. So that's what. And then I also, my former employer offered a pension, and after kind of looking at our options, I elected to take the pension payout at age 36 when I left my job last year, which made me feel old. But anyway, so we took the pension payout and just plugged that into our investment accounts, and they're letting it grow on. On our terms instead of on their terms.

[Jim Dahle]

Very cool. Well, if there's somebody out there with a significant family that's wondering if they can be financially successful, what advice would you have for them?

[Chelsea]

I would say, especially for people who are considering a family or when to start. I, you know, my advice would be, if that's important to you, go ahead and go for it, and your priorities will kind of sort themselves out. Things will fall into place. I think open communication with your spouse or partner is super important. You know, my husband basically had to give up his dream of becoming a judge or climbing up high in the legal profession so he could stay home while I was in residency. And I've had to make job decisions, you know, to work part time and not seek leadership opportunities because I want to be home with my kids and really find that work life balance that both of us are happy with and just kind of checking in with each other often to say, is this working for you? Should I be picking up more shifts? Should I be taking less shifts? So I think that open communication is important and then being open to perhaps moving somewhere where it's not so expensive to live. It was a life changing decision for us and I'm really happy with our choice.

[Jim Dahle]

You know, I often tell people, spend your money on what you value, right? That's what budgeting really is, is aligning your spending with your values. And clearly your values, at least at this point in life, are to have more time, right? You've given up income to have more time so you can spend that with your family. Do you anticipate that changing down the road as kids start leaving home? As kids are, you know, old enough to all be in school, do you expect that you'll be working more later?

[Chelsea]

I don't know. I've set myself up where I have flexibility. You know, I'm a family medicine hospitalist. I have the option to moonlight in urgent cares, emergency rooms, hospice care. I've worked in all of those settings since graduating residency. And I plan to keep all my options open and we'll see what, what I feel like is important to me ten years from now.

[Jim Dahle]

Now every now and then you see a study out there that says a kid costs a bazillion dollars, right? They huge figure out there, 300,000 or 400,000 or something like that. Do you think they're right? Do you think kids have to cost that much? I mean, you're raising eight of them. You should have a pretty good idea what it actually costs to raise a kid. Do you expect that each of your kids are going to cost that much? I mean, in sum total, that would be something like two to three million dollars is what they would cost if these studies are right.

[Chelsea]

Well, my husband grew up on a dairy farm, the eighth of 10 kids. And they tell you what they did not have. $2 million per kid or whatever you just said. And they're all happy and healthy and good people. And I don't know, I reject that concept. I think the most important thing for a kid is probably, you know, having time with both parents and having a stable, intact Home to the extent that that's possible. And some of it is choosing what you are and are not going to fund for your kids. Like we, we haven't done private schools, we haven't done expensive vacation, we don't buy name brand stuff. We don't plan on paying for all of college. We're hoping to make, you know, a contribution towards college, but it's, I think it's kind of choosing. You can choose how expensive you want it to be to raise a kid, I guess is how I would answer your question.

[Jim Dahle]

Now you've paid off your mortgage or don't have a mortgage, bought a house without a mortgage, however we want to describe it, you're mortgage free. What's your next financial goal that you're working on?

[Chelsea]

We are rebuilding our savings. We want to have a full six months supply basically in cash. And then, I don't know, we've talked about, you know, I've calculated your make, 25 times your annual spending in order to be financially independent, which puts us at about $4.5 million, which sounds like a ridiculously unachievable goal. But now that we're a lot closer to that than we were, I think we'll start working towards something in that ballpark. It's also been really important to us to give back generously. You know, we give to a lot of causes and that are important to us and so being able to keep ourselves in a position where we can continue to contribute to those causes is important.

[Jim Dahle]

Very cool. Well, it sounds to me like you're having a very rich life. To me, a lot of wonderful things in your life and I appreciate you being willing to come on the Milestones to Millionaire podcast and sharing it with others to inspire them to achieve their own financial goals.

[Chelsea]

Thank you.

[Jim Dahle]

Okay, that was a lot of fun and I think there's a lot of great lessons you can learn here. The first one is the one I already mentioned, that you should spend your money on whatever you value. This family clearly values family time with family, being able to have a large family. And so they sacrificed elsewhere in their financial life. Right. They're not living in D.C. they're not in Manhattan, they're not in the Bay Area. They did geographic arbitrage that enabled them to have. They've got a good income. Right. There's nothing wrong with the income they have. You know, that's more than twice the income I had as an attending physician when I was in the military. You can certainly live a very nice financial life on that income, but it Allows them both to work part time. How many of you out there would love to all both be working part time and be able to afford your lifestyle? Right. Yeah, they've got a lot of kids. This isn't terribly unusual to somebody who lives in Utah like me. Right. I mean, we've got four kids. The family next door has six. The family next to them has four. The family next to them has 4. There's one down the street with 13. Right. So large families aren't terribly unusual around here, even if they are, you know, a little smaller on average than they used to be and certainly smaller than the average family in the country. I think we're below replacement rate right now. I think the average family is something like 1.6 kids. So, you know, it is unusual to have a family with eight kids. But I'll tell you what, there are none of my kids I regret having. They're wonderful. And maybe if I'd had twice as many, I'd be happier. I don't know. It certainly would be challenging in a lot of ways, and not least of which is financially. Right. I've always been amazed when I see these studies that say how much it costs to raise kids. Then I talk to white coat investors on this podcast and elsewhere, and they're spending 30 or $40,000 a year per kid in private schools, and they've got them in travel, sports, and they've got the greatest latest sneakers, and they got to have the fanciest newest cars. They have all the safety features in them. And I understand why you could spend a gazillion dollars per kid, but my parents didn't have a gazillion dollars. I was one of six kids, and my wife's parents didn't have a gazillion dollars. She was one of six kids as well. So clearly you don't have to spend that much in order to have a family. I do think it's important if you want to have a family, especially if you want to have a large family, that you get started before you're done with a medical training pipeline. You just don't have enough time. Right. If you wait until you've been out of residency for a couple of years, you're probably now 33, 35, 36 years old. You know, maybe you can have one or two kids, and then you're going to need an awful lot of help from our MFM friends, you know, helping you to get pregnant. That's just the way the biology works. So if you want to have a larger family you have to get started at least by the time you're in residency, if not in medical school. I love the moves they made, though. I mean, you know, there's a lot of places that you can move with what you have now in home equity and not have a mortgage. You know, all these people moving from California to Utah, they find out a house here is only 800,000 and they say, oh, only 800,000, I'll take two. And that's the way probably when you move from Utah to Indiana or Wisconsin or wherever, someplace with an even lower cost of living, it is an option. You don't have to stay in your high cost of living area, especially if there's nothing tying you there. If your job's not, you know, the most incredible job ever, if you don't have a bunch of family there, if there's not some recreational pursuit there that you just can't live without, you know, surfing or something like that, then consider, you know, a little bit of geographic arbitrage. It's amazing how much progress you can make in your financial goals just by moving a few states over. Let's talk about revocable trusts. First of all, what is a trust? A trust is an entity that's separate from you, okay? That can own things, that can do things, that can transact in business, okay? But it's not you, it's something totally separate, like forming a corporation or an llc. It's something else. And any trust has got a beneficiary, any trust has got somebody running it, a trustee. And any trust has a grantor, somebody who puts the assets into the trust, grants them to the trust. And the two main types of trusts are revocable and irrevocable trust. An irrevocable trust, once you put the money in there, the trust owns it and you can't get it back. That's not the case with a revocable trust. A revocable trust, you can put assets into it, you can pull assets back out the next day, you can put them back in the day after that and pull them out the day after that. You can do this the whole rest of your life if you want to. That's the nice thing about a revocable trust is it's not even close to being permanent. Right? You can just move things around. So why would anybody use a revocable trust? Well, the main reason is to avoid probate. What's probate? Well, probate is a state specific process for looking at your will and determining where your stuff goes. The beautiful thing about a trust is that it has its own rules that you write about where those assets go when you die. So it's not in your will, it's something totally separate. And so the beautiful thing about that is you can put assets in the trust and those assets don't go through probate. And this is a state specific process. Some states it's more painful and more expensive than others. And if you want to avoid that, you want to avoid that expense, you can set up these revocable trusts and put your assets in there at some point before you die. You don't have to do it years before, decades before. If you know where you're going to die, you can do it just before then and avoid this probate process. Obviously, a lot of us don't know when we're going to die and we might get a little bit demented or something before then. So it's probably a good idea to set it up beforehand in those sorts of situations. The other nice thing about avoiding probate is probate's a public process. And so if somebody wants to see what you owned, they can. And the nice thing about a trust is that's not a public process, it's very private. Okay, so most people need a will, not everybody needs a trust. But a lot of white coat investors are going to want to avoid probate or have their state avoid probate. And so they're going to put a revocable trust in place at some point before they die. And what point should you put it in place? Well, there's no awesome rule of thumb. A lot of people say, well, when your net worth seven figures, you should do it. And there's nothing magic about that rule of thumb. But it's reasonable because you're not doing it right at the very beginning of your career, nor are you waiting until you're already well into retirement before you set it up. So I don't think it's an unreasonable rule of thumb, but the point is you got to put it in place before you die and you don't know when you're going to die. And so that's what you want to be considering when you decide when to set one up. Now, what does it cost to set these up? It can be pretty inexpensive, but I'd caution you not to just do it willy nilly, necessarily with an online, you know, form or something. By the time you're interested in setting up trust for your estate planning, you're usually fairly wealthy. You can afford to get good advice, go to a high quality estate planning attorney in your state to set up trusts and talk about what else you might need to do. And maybe you want to set up some other things as well. Maybe your will needs revised. Maybe you want to put together, you know, a living will or some of those other documents, power of attorney and those sorts of things. And that's also the time to look and see if you have estate tax problems and might need to consider some irrevocable trusts or more exotic techniques there. But that's usually the time when people put together revocable trusts as well. And then of course, like any estate planning technique, you want to review it every year or two or three to make sure it still meets your needs. Now, how do you find a good estate planning attorney in your state? Well, you can start with Google, like anybody does, and you can interview two or three of them if you like. You can ask for referrals. If you know people in your area that have done estate planning, you can ask them if they liked who they used and you know, and take referrals that way. There's no great database that rates them all or anything like that. So when you interview them, make sure you're asking questions like, is this all you do? Or you do in other types of law as well. How many estate plans have you set up in the last year? How many clients like me do you have? Those sorts of questions are the important ones to be asking an estate planning attorney. Now, you have to fund the trust. Just setting it up doesn't do any good. You have to actually move the assets into them. And the way you do that is by retitling the assets. So if you have a brokerage account that you want in the trust, it has to be not in your name. It has to be in the name of the trust. Likewise, if you want to put your car in the trust, you need to title the car in the name of the trust. Likewise, bank accounts, your home, et cetera, they all need to be titled so they're owned by the name of the trust. And that can be a hassle. But it's really silly to spend the money to get a trust set up and never put anything in it. So make sure you fund your trust if you're going to go to the trouble of actually putting them together. Now, revocable trusts is a general rule. These are passed through entities to you for taxable purposes. Now, you can still have some types of irrevocable revocable trusts. They're called intentionally defective grantor trusts that actually pass through that income to you as well for tax purposes. But pretty much every revocable trust, you just pay the taxes on your personal tax return. You don't have to get into these trust tax rates trust tax returns after you die. That trust exists separate from you though, and so a trust tax return will need to be filed then and it will be subject to trust tax rates, which can be fairly high on relatively small amounts of income. So keep that in mind as you set up your trusts. Now, a lot of people worry about asset protection, and they think trusts are a great way to keep creditors from being able to get your money. Remember, asset protection is a process that usually requires you to declare bankruptcy to really use most of its techniques. And some states allow you to keep things in bankruptcy that you want to keep, like retirement accounts are a very common one. Maxing out your retirement accounts is a great asset protection technique. You know what is not a great asset protection technique? Putting stuff into a revocable trust that does not help you. A revocable trust, sometimes called a living trust, is useless as an asset protection technique. It's for avoiding probate. It's not for asset protection. Because if you can revoke it at any time, if you can move the assets out of it at any time, the judge is going to expect you to do so in the event you have a judgment against you. And if you declare bankruptcy, all of the assets in your revocable trust are going to be accessible to your creditors. So it's nice for estate planning purposes. No use in asset protection whatsoever. If you want to think about trusts that help you with asset protection, we're talking about irrevocable trusts with their additional costs and downsides, so keep that in mind. I hope that's helpful to you as you understand the purposes and benefits of putting together a revocable trust. 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 or telephone, with 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 calling 973-771-9100, emailing infoprotuity.com or just going to whitecoatinvestor.com protuity to get your disability insurance in place today. Thanks for listening to the Milestones to Millionaire podcast. If you'd like to be a guest on the podcast. You can go to whitecoatinvestor.commilestones and apply today. Thank you so much for what you're doing. We'll see you next time. Keep your head up and your shoulders back.

[Chelsea]

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.