MtoM #285: This Orthopedic Fellow Reached a $0 Net Worth Before Becoming an Attending - 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.
[00:14]
B
Welcome to the Milestones to Millionaire podcast. You built this. Your career, your success, your life. Now what's your direction? Through the noise and the chaos, you've managed it. Now it's time to choose a partner worthy of managing your real estate investments. Lightstone Direct brings accredited individuals direct access to multifamily and industrial deals. The same ones lightstone invests in a 12 billion assets under management real estate operator in your corner. You are self directed, but you don't need to do it all by yourself. Take your seat at our table@lightstonedirect.com WCI all investments involved risk. Please visit LightsOneDirect for disclosures. All right, welcome back to the podcast. We love having you here. Without you, it's not much of a podcast. We need listeners or I'm just screaming into the void. And obviously we need guests. And so if you're interested in coming on the podcast and sharing your story and sharing what you've accomplished, your milestones, to inspire somebody else to do the same, you can sign up@whitecoatinvestor.com Milestones okay, I'm told by our staff that people are refinancing loans again. That is a good thing. That means rates have come down a little bit and people are able to get lower loans on their student loans or lower interest rates on their student loans. Now sometimes you can do that just because you got in a better financial position, your credit score is better, your debt to income ratio is better, you know, so you just qualify for a better rate. So if you're paying off your student loans, you might as well refinance them and get the lowest interest rate you can get. You can get the best deals out there on student loan refinancing@whitecoatinvestor.com student-loan refinancing. So check that out. All right, we've got a great guest on today. Let's get him on the line. My guest today on the Milestones to Millionaire podcast is Alec. Alec, welcome to the podcast.
[02:10]
A
Thanks for having me.
[02:12]
B
Tell us what you do for a living, how far you are out of training, what part of the country you're in, and maybe most importantly, what you've accomplished recently.
[02:20]
A
So I am a orthopedic surgery fellow for another couple of weeks. I finished the end of July. I live in the southeast right now and headed to the mid Atlantic for my job and we are back to broke.
[02:34]
B
Awesome. That's pretty Cool. Back to broke and not even quite done with training yet. All right, you say we. Who's the other person in the picture here?
[02:44]
A
So my wife and I, we've been married over 12 years. Been together a long time through the whole journey. She's seen it all. And then we've got three kids at home with us.
[02:55]
B
Awesome. So there's really a lot of we. There's five of you.
[02:58]
A
Yeah.
[02:58]
B
All right, so give us the breakdown. I mean, back to broke means your net worth is zero, meaning you have as much in assets as you have in liabilities in debt. So why don't we start on the liability side of the ledger. Tell us about your debts.
[03:14]
A
So I have right around 300,000 in government student loans right now.
[03:19]
B
Just student loans?
[03:20]
A
Yeah, that's it. Okay, just student loans. And then the other side of that is about 300,000 in different investment areas.
[03:30]
B
Tell us about the investments.
[03:32]
A
So we've been able to do an HSA ever since I started as a resident. So that's one of our larger ones. We have about 80,000 in that. So we've had a high yield deductible plan for all of residency and fellowship. So five year residency, one year fellowship. And then I have a Roth that's just around about 100 that I've contributed to most years, not every single year over the last six, seven years. My wife has this similar. She has a Roth as well, around 50,000. I have a 403 from my current fellowship. That's about 30. And then we have some money in a 529, which I guess sort of ours, not really ours. That's about 20,000. Then we have some cash on top of that.
[04:18]
B
Okay. I mean, this is substantial. Is there an additional income here? Is there a moonlighting income? Is your wife working while you guys are raising three kids? Did you really do all this on just a resident kind of income or tell us how you did this income wise.
[04:35]
A
Yeah. So we did have a home sale at the end of residency, which has made some of the contributions over the last, I guess, year and a half possible. I guess the other thing we need to remember though is I looked this up. Cause I wanted to be as active as I could when I started getting the match in residency. So that we did have a 403B match. The Vanguard's total stock market was selling at 90. It's now when I wrote my notes here, it's 180.
[05:04]
B
So a lot of this. Is your money working?
[05:06]
A
Yeah, the money has been working. Yeah, exactly. Yeah. I do want to say we've done a good job, but the market's probably done better than we have.
[05:15]
B
And meanwhile, you've been part of that. You were during the student loan holiday. And what IDR program do you have these student loans in?
[05:23]
A
So I was in. Let's see, what was I in forever? I was in pay for most of it. I think that's the other one of the biggest things. When I graduated medical school with about 300, I anticipated by the end of residency to be to owe somewhere close to five or more. But with the pause, I've really benefited from that, obviously.
[05:42]
B
Okay, so what do you guys invest in? You said total stock market. Some of it is that you just take it all in total stock market and keep it simple or what do you do?
[05:50]
A
Yeah, that's essentially all of it. I think somewhere along the way, I heard you say, as long as your portfolio is under 100 grand, keep it simple. Stocks for us the whole time. When I had the forestry B for a long time, that was in
[06:06]
B
a target retirement.
[06:07]
A
A target retirement? Yeah. So I just picked the highest one that was available, I think was a 2065. When the 2070 became available, I started investing in that. And so we are 100% stock right now. Just trying to take advantage of the time horizon.
[06:21]
B
Very cool. Okay. So, I mean, even so, you still put a fair amount of money in on a resident income. Was your wife not working?
[06:30]
A
So my wife was not working when we were residents. We had our first at the end of medical school, and we had our second about a month before starting residency. So she's been at home for about five, six years now. And so we were pretty frugal. We did buy a home the second year residency and got a really great rate as far as cash flow goes. We had pretty limited expenses.
[06:54]
B
Yeah, you probably got a 3% mortgage or something, huh?
[06:57]
A
Yeah, it was under 2%, which was absurd. Which was great. You know, we went from renting my intern year around $2,000 to our mortgage being around 1,200 for most of residency.
[07:08]
B
It helps when you don't have to pay any interest.
[07:10]
A
Yeah, exactly. Yeah. So that obviously freed up some money. And then, you know, we were. We were pretty, you know, frugal with essentially no vacations, you know, no real expenses outside of diapers and groceries for. For the years that we were in residency.
[07:28]
B
Okay, so your wife's been holding on here for a while, right? I mean, five or six years. She hasn't been working. You've been gone for 80 plus hours a week, and now you're coming into soon unattending income. What's going to change? What's your financial life going to look like the next year? Have you planned it out at all?
[07:48]
A
Yes. So we, you know, we've definitely looked at this. Often on this podcast you talk about, you know, what's your secret success or so forth. It's having my wife on board with me or being on the same team. I think that's the biggest thing for us. So we obviously know things will change, you know, that, that, you know, income goes up. But we have a pretty solid plan. We had a plan of residency, of following kind of the residency waterfall, and there's a tending waterfall as well that we know kind of where every dollar goes first and then there's leftover and we know kind of what to do with the leftover. So I think we're very excited for that change, but I think we're also ready for it.
[08:25]
B
I imagine after five years or plus years, you get a year of fellowship. Six. Yeah. Okay. So what do you think your first really big splurge is going to be?
[08:36]
A
Oh, geez. We have this kind of funny notes tab that we have together, and there's a category we have that's called Buy Win Rich. Right. Which is basically essentially, I love it. Things that we would like when we have a little bit more spare money. And it's kind of, it's kind of what you'd expect, though. It's simple. Things that we've kind of neglected. Like, I really want my car to get detailed and my wife wants a, a car wash subscription. So, you know, it's small things. I think the big one that, that's definitely on there is I told her when the student loans are paid off, which will be, you know, some more time, obviously, pick anywhere in the world and we'll go, you know that. So that's kind of one of our kind of carrots out there is, is that we'll do something big kind of once we have this, you know, thing hanging over us. Gone.
[09:27]
B
What is the plan for your student loans? You owe 300ish now. What?
[09:31]
A
Yeah.
[09:31]
B
How long is this going to take you to wipe these out? Are you going for PSLF or what's the plan?
[09:35]
A
So I was planning PSLF for a long time, thinking I was going to go into academics. So I, you know, I was kind of maximizing what would have been a big, big forgiveness. I'm actually joining a private practice, and so my plan is to refinance this fall. I refinanced earlier, but I can't afford the refinance monthly until I probably start just because of large sum. And so I'll refinance this fall and then aggressively pay off and refinance every six months or so. The most common debate probably on the podcast is investor pay down debt. And I'm squarely right in the middle of that of where if I can get it to a number, both a value and an interest rate that I feel comfortable with, that I can just kind of know that it's going to go know smoothly and it's, it's guaranteed returns by investing, then I, I think I'll be happy. But for a little bit, I'll be aggressively paying down, you know, spare money and stuff going towards it.
[10:31]
B
What do you think? Two years, three years, five years? How long are you gonna.
[10:34]
A
I think under two, for sure.
[10:36]
B
Under two. Okay. So pretty, pretty aggressive pay down.
[10:39]
A
Yeah, I think we'll be pretty aggressive with it. All right.
[10:42]
B
There's somebody out there that's hanging on, right? Maybe like your spouse has been in some respects, you know, they're first year residents, second year residents, whatever. Maybe they can glimpse a little light at the end of the tunnel. They're worried it's a train, right? They want it. They want to do what you've done. They want to get back to broke. They want to have this written plan that they're going to put in place as they come into their, you know, attending money. They want to have, you know, some money on the side in case something bad happens. They want to put together a tab on their spreadsheet to do win rich. What advice do you have for them?
[11:17]
A
You know, one of your lines is, you know, personal finance is personal. You need to find that balance of what can we realistically do, right. It's kind of like, you know, people with their dieting, right? If you try to, you know, go out and be really strict on your diet, I found that I end up, you know, eating a whole box of Oreos or something. Right. And so if you really, if you really are super frugal and you're counting every single penny, I feel like it can be very hard to maintain that for a long period of time. And so the rule that we followed that I forget which book I picked up that you'd recommended that had it in it was kind of this 10% rule that any extra money you get, you do 10% with it, whatever you want, no questions asked, no guilt. And so, you know, for us Extra money. It's like, well, what's extra money as a resident? Well, we couldn't moonlight as residents, so I did get a couple travel awards. We have a few things in there. So there's a little bit of money here and there. And so when that money came around, you got 10%, you get to do whatever you want with it. And then 90% goes towards building wealth, whatever you categorize it as. So paying down debt or investing or whatever. And so for some people, that number might be more like 50% or 60% or whatever it is. And so I think that's why it's personal. Finding the number that makes sense for you, that you can live with. And so, you know, I start in September. You know, the first paycheck will be sometime maybe in October. You know, if we look at that number that's left over after, you know, our expenses and we decide, you know, 10% is the number, or we, you know, another couple decides, no, it's 50% then I think that's kind of where you find that balance of, you know, we can do whatever we want with this or, and, you know, we have the opportunity to do that.
[12:58]
B
Well, we've talked about what you've done, we've talked about your future financial goals, we've talked about your advice for others. Anything we haven't covered today that you feel like white coat investors ought.
[13:08]
A
You know, I think that the one thing that I would harp on is for, and I know this kind of a more specific crowd, but for medical students, I look at fourth year as the best opportunity for a lot of this education. You know, I don't think there's a ton you can do as a medical student as far as, you know, investing and things like that. And a lot of the advice that, you know, I got from you and in your book, you know, there's not a lot you can do when you don't have an income. There are some wise things you can do, certainly, and I encourage everybody to do that. But, you know, you have fourth year of med school. If it's anything like my fourth year, it's almost the biggest waste of medical education in history. You know, you pay full tuition, you're gone half the year, you have all these kind of easy classes and you have all this free time. And so I encourage everyone I meet to self educate as much as you can. And that's in general, but especially as a medical student, you have all this time to travel to interviews or, you know, some people spend a month in Cambodia or Bali or whatever they do. And there's all this opportunity to get ready for the next step. And so I always tell people, get the podcast, get some books on, some audiobooks, get some hard books, whatever. You need to just start reading and educating yourself, because, again, to your advice, nobody's going to care about this more than you will. And so you need to take ownership and take control, and I think that's the best opportunity to do so.
[14:29]
B
Yeah, that's good advice. Well, you've been very successful. You should be very proud of yourself. This might be the first big milestone you hit when you get back to broke, but I have a feeling you're going to get through a whole lot of others in a pretty good hurry. So congratulations to you, Alec. Well done. Be proud of yourself. And thanks so much for being willing to come on the podcast.
[14:48]
A
Thank you so much. It's been awesome to be here. Really appreciate it. All right.
[14:52]
B
I hope you enjoyed that interview as much as I did. It's wonderful to see that it works, Right. There's nothing really terribly complicated about what we tell people to do here with their finances. And a lot of the benefit, I think, of this milestones podcast is that we just get to trot people out at different points in their career and say, hey, look, if you just do this stuff, it works, right? Here's a doc Back to broke already before even being done with training. Right. It's way ahead. And sometimes you feel like you're behind when you're in something that has a long training period like orthopedics, you know, five years of residency and a year of fellowship. Well, you know, the emergency docs out there have already been earning 350 or $400,000 a year for three years by the time you come out of training. And so it's good to see people making progress even while they're in training, particularly when they're in these longer training programs. Now, obviously, an orthopedist generally makes more money than an emergency doc and most other specialties. He's going to be fine. But the fact that when he gets money, it hits prepared hands goes a long way. He already knows what to do with it. He's got a plan for the next year. And if you, as you come out of training, if you will just have a written financial plan for what you're going to do with those first 12 monthly paychecks, you're ahead of 95% plus stocks. You're actually got something you're working toward. And when you have a plan, you achieve Your goals. It's amazing. It works very well. So I encourage you to do that. I'm bringing people on here that are not me that are doing that as well to demonstrate this works. And look how much peace of mind they have, because they know they're on a pathway that leads to financial success. Even if we're still celebrating their first milestone, right? I mean, his net worth is zero. He's worthless, right? But look at his future. It's going to be awesome. And so will yours if you also take care of your finances. Let's talk about net worth for a minute. Net worth is perhaps the most important number, certainly one of the few important numbers in personal finance and investing. A lot of people get fixated on their credit score. Your net worth is dramatically more important than your credit score. As far as financial numbers go. Don't worship at the altar of fico. If you're going to concentrate on stuff, concentrate on things like how much you have in investable assets and your savings rate and your net interest worth rather than your credit score. Net worth is everything you own minus everything you owe. Technically, it includes everything. Your clothes, your computer, your vacuum, everything, right? But in practical speaking, what most people include on the asset side is their investments and bank accounts and their home. And that's usually about it, right? Your investments in your home, and those are kind of the big chunks. If you can calculate that much each year, that's probably enough. You don't have to go crazy assigning values to your cars or your RVs or your boats or your clothing or your jewelry or anything like that. If you want to, you can. It technically is part of your net worth, but a lot of people leave that out of any sort of annual net worth calculation. They do. On the other side of the ledger is your liabilities, your debts. Right. Credit card debt, all auto loans, your mortgage. Right. So your net worth includes your home equity. But you got the value of the home on one side, you got the value of the mortgage on the other side of the ledger. You subtract the liabilities from the assets and that's your net worth. If you're like most doctors, your net worth starts out negative, right? 75% of doctors pay for medical school loans. So when they come out of their residency or fellowship, when they're 31 or 35 or whatever, their net worth is negative because they got two or three or $400,000 in student loans and $10,000 in assets. So they have a negative net worth, and that's okay. The point is not where you start, it's the direction you're moving in and the speed you're moving at. Now I get lots of questions about net worth. People want to get into specifics of what should be included and what shouldn't be included. For example, they ask about accounts like 529s and UTMAs and your children's custodial Roth IRAs and your donor advised funds. And the truth is you can include those if you want. But I think the important thing is to be consistent because what you're really looking for here is the trend that you're moving in. Now, technically, in one respect, the 529 belongs to you. Even though your kid's the beneficiary, you could pull all the money out, pay any taxes and penalties on doing so, and buy a sailboat with it or put it in your taxable account. It's technically, technically your money. It's interesting though, for estate tax purposes, it's already been considered a completed gift to your kid. So a little bit interesting there with 529s. A lot of people look at these sorts of things for their children's accounts and they don't count them in their net worth because they consider them. It's not mine anymore, it's my kids. So 529s, UTMAs, these custodial accounts and custodial Roth IRAs, for instance, they don't count in their net worth because they view it as their kids money. And I think that's very reasonable when it comes to a donor advised fund, a daf, that's particularly true. You can't take that money out, just like you can't take out your kid's Roth IRA or your kid's UTMA account and put it in your own account. It's gone. It's definitely a gift you've already given away. But if you want to include that in your net worth, I think that's okay too. Just be consistent year to year. A more important number than net worth is probably your investable assets. Okay? This is a number that you can actually use for something important and make decisions with. Net worth is more like kind of interesting and neat to know and make sure you're moving in the right direction, that sort of a thing. But your investable assets is a number you actually use to do financial planning. For example, as a general rule, you can take out about 4% of your investable assets per year and expect your money to last in retirement for at least 30 years with a very high probability.
[21:02]
A
Right?
[21:03]
B
That's not your net worth, though. That's your investable assets that you multiply by that number. So that generally just includes your investments. Most people don't include their home in that they typically don't include their debts in that. They typically don't include something like 529s or utmas or donor advised funds or something like that. It's just your investments, right? If you have rental properties, you'd include that. If you have, you know, retirement accounts, you'd include that. If you have taxable brokerage accounts, you would include that all in your investable assets. What I wouldn't necessarily try to do, though, is somehow put a dollar value on income streams you have. If you have bought a single premium immediate annuity, this is a pension you buy from an insurance company. I would not include the value of what you paid for that any longer in, in your investable assets. Same thing with Social Security. Don't try to assign a dollar value to it and put it in your investable assets or your net worth. Same thing with a pension, right? If you have a pension, you've already annuitized it. It's now an income stream. I wouldn't include it in your investable assets. When you go to calculate how much you need out of your portfolio, you subtract all those sources of guaranteed income from the amount of income you need. So if you say, I need $150,000 to live on and I'm getting $20,000 from a pension and I bought an income annuity that'll pay me $20,000 a year and I'm getting $40,000 from Social Security, well, now you only need your portfolio to provide you $70,000 a year, not $150,000 a year. But I wouldn't try to assign a value to any of those assets and put them into your investable assets. I would leave them out and just subtract the guaranteed income from the amount you need it. So net worth is worth calculating once a year. You or your financial advisor certainly needs to know what your investable assets are so you can do financial calculations, financial planning with that number. But these are numbers worth calculating once a year, whether you're a do it yourselfer or whether you're not, just to track how you're doing, where you're going. The question we get a lot is, do we pay down debt or do we invest? And the truth is, both of those are good things to do. Both of them increase your net worth, right? And they generally increase your investable assets as you go along as well. So don't worry so much about where your money's going in that respect, more about how much of it's going toward these good things that build your net worth. Hope that's helpful to you. Our sponsor for this episode is Lightstone Direct. You're an institution. Time to invest like it With Lightstone Direct, you can access the same private opportunities Lightstone pursues with its own capital. In fact, Lightstone invests at least 20% of the equity every time. That's real alignment and a 12 billion asset under management owner operator in your corner. The just launched Multifamily opportunity features 7.4% target net cash on cash with monthly distributions. Visit Lightstone Direct to learn more. All investments involve risk. Please visit lightstonedirect.com for disclosures. All right, we've come to the end of the podcast once more. Keep your head up, your shoulders back. You've got this. We're all here to help you be successful. See you next time on the Milestones Podcast.
[24:28]
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.

Summary6 min read

White Coat Investor Podcast – Milestones to Millionaire #285
This Orthopedic Fellow Reached a $0 Net Worth Before Becoming an Attending
Host: Dr. Jim Dahle
Guest: Alec, Orthopedic Surgery Fellow
Date: July 27, 2026

Episode Overview

This episode of the White Coat Investor’s "Milestones to Millionaire" series features Alec, an orthopedic surgery fellow who achieved a net worth of $0—meaning his assets and liabilities are equal—before even finishing his medical training. Host Dr. Jim Dahle explores how Alec and his family accomplished this on a fellow’s income, focusing on strategies for student loan management, disciplined investing during residency, the importance of teamwork in personal finance, and advice for other medical professionals in their training years.

The conversation highlights practical steps toward financial freedom while underscoring the value of planning and financial literacy for doctors-in-training.

Key Discussion Points & Insights

Alec’s Background & Milestone

Who is Alec?
- Orthopedic surgery fellow, finishing training at the end of July.
- Based in the Southeast, moving to the Mid-Atlantic for his first attending position.
- Married for over 12 years, father of three children.
Milestone Achieved:
- Reached a net worth of $0—“back to broke”—before completing fellowship.
  “We are back to broke.” (Alec, 02:21)

Debt Breakdown and Investment Strategy

Main Liability:
- ~$300,000 in government student loans.
Assets (Investments/Cash):
- Health Savings Account (HSA): ~$80,000
- Roth IRA (Alec): ~$100,000
- Roth IRA (Wife): ~$50,000
- 403(b): ~$30,000
- 529 Plan (children’s education): ~$20,000
- Additional cash savings
- Investment Style:
  - Simple, stock-focused portfolio (mostly total stock market index funds and high-dated target retirement funds).
  - “I heard you say… as long as your portfolio is under 100 grand, keep it simple. Stocks for us the whole time.” (Alec, 05:49)
Investment Growth:
- Recognizes that a favorable market doubled his 403(b) investments during residency (Vanguard’s total stock market from $90 to $180/share).
  “I do want to say we’ve done a good job, but the market’s probably done better than we have.” (Alec, 05:05)

Lifestyle Choices and Income

Frugality:
- Lived simply with limited expenses (no vacations, minimal non-essential spending, focused on diapers and groceries).
- Bought a home during residency at a favorable sub-2% interest rate, lowering monthly housing costs ($1,200 mortgage vs. $2,000 rent as an intern). “We did buy a home the second year residency and got a really great rate… our mortgage being around $1,200 for most of residency.” (Alec, 06:56)
Wife’s Role:
- Full-time stay-at-home parent since their second child was born at the start of residency; Alec clearly attributes much of their financial progress to teamwork. “It’s having my wife on board with me or being on the same team. I think that’s the biggest thing for us.” (Alec, 07:49)
Home Sale:
- Enabled additional investment contributions in the last 18 months.
Supplements to Resident Income:
- No moonlighting (not allowed), but occasion “extra money” came from travel awards and similar sources.

Looking Ahead: Post-Fellowship Financial Plan

Planning the Transition:
- Already set with a written plan for newly increased attending income—adopts "residency waterfall" (priority order for funds allocation), now shifting to an "attending waterfall."
- Excitement but readiness for lifestyle and income changes.
First Splurges:
- Nothing extravagant; plans include “getting my car detailed,” wife wants a “car wash subscription.”
- Larger splurge awaits the paying off of student loans: “Pick anywhere in the world and we’ll go.” (Alec, 08:49)
Student Loan Repayment:
- Initially intended to pursue PSLF but switched to private practice.
- Plans to refinance loans after starting as an attending and pay off within two years:
  “I’ll refinance this fall and then aggressively pay off… under two [years], for sure.” (Alec, 10:34)

Alec’s Advice for Others

Personal Finance is Personal:
- “You need to find that balance of what can we realistically do.” (Alec, 11:17)
- Uses “the 10% rule": Any extra money—10% can be spent however you like, 90% goes to building wealth (debt or investments).
  - “No questions asked, no guilt.” (Alec, 11:42)
- Adjust this split as fits your needs (10%, 50%, etc.), but avoid unsustainable diets/frugality.
Start Learning in Medical School:
- Recommends that med students use the relatively low-stress and flexible fourth year to get educated on personal finance.
  - “You pay full tuition, you’re gone half the year … all this free time ... So I encourage everyone I meet to self educate as much as you can.” (Alec, 13:15)
  - “Nobody’s going to care about this more than you will. You need to take ownership and take control.” (Alec, 14:13)

Dr. Dahle’s Key Takeaways (Host Commentary)

Proof of the WCI Approach:
- “If you just do this stuff, it works… Here’s a doc back to broke already before even being done with training. Right. It’s way ahead.” (Dr. Dahle, 14:51)
- Emphasizes the power of preparation—having a written financial plan for the first year out of training gives new attendings a critical advantage.
Net Worth vs. Credit Score:
- "Net worth is dramatically more important than your credit score. As far as financial numbers go, don’t worship at the altar of FICO." (Dr. Dahle, 16:00)
What to Include in Net Worth:
- Tracking net worth should focus on major assets (investments, home equity) and debts.
- Children’s accounts (529s/UTMAs/etc.) can be included or excluded for consistency, but are often better excluded as they are functionally “not your money anymore."
Investable Assets vs. Net Worth:
- Investable assets are a more important metric for financial planning, whereas net worth is better for tracking trajectory.
Debt vs. Investing:
- Both paying down debt and investing build wealth; focus more on how much you’re allocating to "good" uses, not on which is "better."

Notable Quotes & Memorable Moments

On Frugality & Team Effort:
- “It’s having my wife on board with me or being on the same team. I think that’s the biggest thing for us.” (Alec, 07:49)
On Investment Simplicity:
- “As long as your portfolio is under 100 grand, keep it simple. Stocks for us the whole time.” (Alec, 05:52)
On the Power of a Written Plan:
- “If you, as you come out of training, will just have a written financial plan for what you’re going to do with those first 12 monthly paychecks, you’re ahead of 95% plus docs.” (Dr. Dahle, 15:20)
On Personalization of Finances:
- “Personal finance is personal. You need to find that balance of what can we realistically do." (Alec, 11:17)
On Using Time in Medical School for Self-Education:
- "Fourth year [of medical school] is the best opportunity for a lot of this education… just start reading and educating yourself.” (Alec, 13:13)
On Living Like a Resident:
- “No vacations, no real expenses outside of diapers and groceries…” (Alec, 07:12)

Important Timestamps

Net Worth Milestone Explained: 02:20 – Alec explains being "back to broke" before finishing training.
Asset and Debt Breakdown: 03:14–04:18 – Details on loans and investments.
Investment Approach and Market Growth: 04:35–05:14 – Alec credits market returns and simple investing.
Frugality and Home Purchase: 06:30–07:10 – Living cheaply during residency.
Post-fellowship Plans: 07:47–08:24 – Planning for attending salary, joint goals.
Splurges and Lifestyle Upgrades: 08:36–09:26 – “Buy When Rich” list and travel goals after loans paid off.
Student Loan Repayment Strategy: 09:27–10:39 – Decision to refinance and aggressive debt paydown.
Advice for Other Trainees: 11:17–14:13 – 10% rule, personalized finance, importance of financial education in med school.
Host Reflection and Net Worth Discussion: 14:51–21:00 – Dr. Dahle’s summary, advice on net worth vs. credit score, investable assets.

Final Takeaways

Alec’s story demonstrates that disciplined, straightforward financial practices—saving, investing simply, minimizing lifestyle inflation, and working as a team—can bring a physician “back to broke” well before the traditional finish line, setting the stage for rapid wealth accumulation in attending years. The episode highlights the value of having a plan, using every available resource (including fourth year of med school), and building habits early—key takeaways for any high-income professional seeking financial independence.

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Transcript53 lines

[00:00]
A
This is the White Coat Investor Podcast. Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom.
[00:14]
B
Welcome to the Milestones to Millionaire podcast. You built this. Your career, your success, your life. Now what's your direction? Through the noise and the chaos, you've managed it. Now it's time to choose a partner worthy of managing your real estate investments. Lightstone Direct brings accredited individuals direct access to multifamily and industrial deals. The same ones lightstone invests in a 12 billion assets under management real estate operator in your corner. You are self directed, but you don't need to do it all by yourself. Take your seat at our table@lightstonedirect.com WCI all investments involved risk. Please visit LightsOneDirect for disclosures. All right, welcome back to the podcast. We love having you here. Without you, it's not much of a podcast. We need listeners or I'm just screaming into the void. And obviously we need guests. And so if you're interested in coming on the podcast and sharing your story and sharing what you've accomplished, your milestones, to inspire somebody else to do the same, you can sign up@whitecoatinvestor.com Milestones okay, I'm told by our staff that people are refinancing loans again. That is a good thing. That means rates have come down a little bit and people are able to get lower loans on their student loans or lower interest rates on their student loans. Now sometimes you can do that just because you got in a better financial position, your credit score is better, your debt to income ratio is better, you know, so you just qualify for a better rate. So if you're paying off your student loans, you might as well refinance them and get the lowest interest rate you can get. You can get the best deals out there on student loan refinancing@whitecoatinvestor.com student-loan refinancing. So check that out. All right, we've got a great guest on today. Let's get him on the line. My guest today on the Milestones to Millionaire podcast is Alec. Alec, welcome to the podcast.
[02:10]
A
Thanks for having me.
[02:12]
B
Tell us what you do for a living, how far you are out of training, what part of the country you're in, and maybe most importantly, what you've accomplished recently.
[02:20]
A
So I am a orthopedic surgery fellow for another couple of weeks. I finished the end of July. I live in the southeast right now and headed to the mid Atlantic for my job and we are back to broke.
[02:34]
B
Awesome. That's pretty Cool. Back to broke and not even quite done with training yet. All right, you say we. Who's the other person in the picture here?
[02:44]
A
So my wife and I, we've been married over 12 years. Been together a long time through the whole journey. She's seen it all. And then we've got three kids at home with us.
[02:55]
B
Awesome. So there's really a lot of we. There's five of you.
[02:58]
A
Yeah.
[02:58]
B
All right, so give us the breakdown. I mean, back to broke means your net worth is zero, meaning you have as much in assets as you have in liabilities in debt. So why don't we start on the liability side of the ledger. Tell us about your debts.
[03:14]
A
So I have right around 300,000 in government student loans right now.
[03:19]
B
Just student loans?
[03:20]
A
Yeah, that's it. Okay, just student loans. And then the other side of that is about 300,000 in different investment areas.
[03:30]
B
Tell us about the investments.
[03:32]
A
So we've been able to do an HSA ever since I started as a resident. So that's one of our larger ones. We have about 80,000 in that. So we've had a high yield deductible plan for all of residency and fellowship. So five year residency, one year fellowship. And then I have a Roth that's just around about 100 that I've contributed to most years, not every single year over the last six, seven years. My wife has this similar. She has a Roth as well, around 50,000. I have a 403 from my current fellowship. That's about 30. And then we have some money in a 529, which I guess sort of ours, not really ours. That's about 20,000. Then we have some cash on top of that.
[04:18]
B
Okay. I mean, this is substantial. Is there an additional income here? Is there a moonlighting income? Is your wife working while you guys are raising three kids? Did you really do all this on just a resident kind of income or tell us how you did this income wise.
[04:35]
A
Yeah. So we did have a home sale at the end of residency, which has made some of the contributions over the last, I guess, year and a half possible. I guess the other thing we need to remember though is I looked this up. Cause I wanted to be as active as I could when I started getting the match in residency. So that we did have a 403B match. The Vanguard's total stock market was selling at 90. It's now when I wrote my notes here, it's 180.
[05:04]
B
So a lot of this. Is your money working?
[05:06]
A
Yeah, the money has been working. Yeah, exactly. Yeah. I do want to say we've done a good job, but the market's probably done better than we have.
[05:15]
B
And meanwhile, you've been part of that. You were during the student loan holiday. And what IDR program do you have these student loans in?
[05:23]
A
So I was in. Let's see, what was I in forever? I was in pay for most of it. I think that's the other one of the biggest things. When I graduated medical school with about 300, I anticipated by the end of residency to be to owe somewhere close to five or more. But with the pause, I've really benefited from that, obviously.
[05:42]
B
Okay, so what do you guys invest in? You said total stock market. Some of it is that you just take it all in total stock market and keep it simple or what do you do?
[05:50]
A
Yeah, that's essentially all of it. I think somewhere along the way, I heard you say, as long as your portfolio is under 100 grand, keep it simple. Stocks for us the whole time. When I had the forestry B for a long time, that was in
[06:06]
B
a target retirement.
[06:07]
A
A target retirement? Yeah. So I just picked the highest one that was available, I think was a 2065. When the 2070 became available, I started investing in that. And so we are 100% stock right now. Just trying to take advantage of the time horizon.
[06:21]
B
Very cool. Okay. So, I mean, even so, you still put a fair amount of money in on a resident income. Was your wife not working?
[06:30]
A
So my wife was not working when we were residents. We had our first at the end of medical school, and we had our second about a month before starting residency. So she's been at home for about five, six years now. And so we were pretty frugal. We did buy a home the second year residency and got a really great rate as far as cash flow goes. We had pretty limited expenses.
[06:54]
B
Yeah, you probably got a 3% mortgage or something, huh?
[06:57]
A
Yeah, it was under 2%, which was absurd. Which was great. You know, we went from renting my intern year around $2,000 to our mortgage being around 1,200 for most of residency.
[07:08]
B
It helps when you don't have to pay any interest.
[07:10]
A
Yeah, exactly. Yeah. So that obviously freed up some money. And then, you know, we were. We were pretty, you know, frugal with essentially no vacations, you know, no real expenses outside of diapers and groceries for. For the years that we were in residency.
[07:28]
B
Okay, so your wife's been holding on here for a while, right? I mean, five or six years. She hasn't been working. You've been gone for 80 plus hours a week, and now you're coming into soon unattending income. What's going to change? What's your financial life going to look like the next year? Have you planned it out at all?
[07:48]
A
Yes. So we, you know, we've definitely looked at this. Often on this podcast you talk about, you know, what's your secret success or so forth. It's having my wife on board with me or being on the same team. I think that's the biggest thing for us. So we obviously know things will change, you know, that, that, you know, income goes up. But we have a pretty solid plan. We had a plan of residency, of following kind of the residency waterfall, and there's a tending waterfall as well that we know kind of where every dollar goes first and then there's leftover and we know kind of what to do with the leftover. So I think we're very excited for that change, but I think we're also ready for it.
[08:25]
B
I imagine after five years or plus years, you get a year of fellowship. Six. Yeah. Okay. So what do you think your first really big splurge is going to be?
[08:36]
A
Oh, geez. We have this kind of funny notes tab that we have together, and there's a category we have that's called Buy Win Rich. Right. Which is basically essentially, I love it. Things that we would like when we have a little bit more spare money. And it's kind of, it's kind of what you'd expect, though. It's simple. Things that we've kind of neglected. Like, I really want my car to get detailed and my wife wants a, a car wash subscription. So, you know, it's small things. I think the big one that, that's definitely on there is I told her when the student loans are paid off, which will be, you know, some more time, obviously, pick anywhere in the world and we'll go, you know that. So that's kind of one of our kind of carrots out there is, is that we'll do something big kind of once we have this, you know, thing hanging over us. Gone.
[09:27]
B
What is the plan for your student loans? You owe 300ish now. What?
[09:31]
A
Yeah.
[09:31]
B
How long is this going to take you to wipe these out? Are you going for PSLF or what's the plan?
[09:35]
A
So I was planning PSLF for a long time, thinking I was going to go into academics. So I, you know, I was kind of maximizing what would have been a big, big forgiveness. I'm actually joining a private practice, and so my plan is to refinance this fall. I refinanced earlier, but I can't afford the refinance monthly until I probably start just because of large sum. And so I'll refinance this fall and then aggressively pay off and refinance every six months or so. The most common debate probably on the podcast is investor pay down debt. And I'm squarely right in the middle of that of where if I can get it to a number, both a value and an interest rate that I feel comfortable with, that I can just kind of know that it's going to go know smoothly and it's, it's guaranteed returns by investing, then I, I think I'll be happy. But for a little bit, I'll be aggressively paying down, you know, spare money and stuff going towards it.
[10:31]
B
What do you think? Two years, three years, five years? How long are you gonna.
[10:34]
A
I think under two, for sure.
[10:36]
B
Under two. Okay. So pretty, pretty aggressive pay down.
[10:39]
A
Yeah, I think we'll be pretty aggressive with it. All right.
[10:42]
B
There's somebody out there that's hanging on, right? Maybe like your spouse has been in some respects, you know, they're first year residents, second year residents, whatever. Maybe they can glimpse a little light at the end of the tunnel. They're worried it's a train, right? They want it. They want to do what you've done. They want to get back to broke. They want to have this written plan that they're going to put in place as they come into their, you know, attending money. They want to have, you know, some money on the side in case something bad happens. They want to put together a tab on their spreadsheet to do win rich. What advice do you have for them?
[11:17]
A
You know, one of your lines is, you know, personal finance is personal. You need to find that balance of what can we realistically do, right. It's kind of like, you know, people with their dieting, right? If you try to, you know, go out and be really strict on your diet, I found that I end up, you know, eating a whole box of Oreos or something. Right. And so if you really, if you really are super frugal and you're counting every single penny, I feel like it can be very hard to maintain that for a long period of time. And so the rule that we followed that I forget which book I picked up that you'd recommended that had it in it was kind of this 10% rule that any extra money you get, you do 10% with it, whatever you want, no questions asked, no guilt. And so, you know, for us Extra money. It's like, well, what's extra money as a resident? Well, we couldn't moonlight as residents, so I did get a couple travel awards. We have a few things in there. So there's a little bit of money here and there. And so when that money came around, you got 10%, you get to do whatever you want with it. And then 90% goes towards building wealth, whatever you categorize it as. So paying down debt or investing or whatever. And so for some people, that number might be more like 50% or 60% or whatever it is. And so I think that's why it's personal. Finding the number that makes sense for you, that you can live with. And so, you know, I start in September. You know, the first paycheck will be sometime maybe in October. You know, if we look at that number that's left over after, you know, our expenses and we decide, you know, 10% is the number, or we, you know, another couple decides, no, it's 50% then I think that's kind of where you find that balance of, you know, we can do whatever we want with this or, and, you know, we have the opportunity to do that.
[12:58]
B
Well, we've talked about what you've done, we've talked about your future financial goals, we've talked about your advice for others. Anything we haven't covered today that you feel like white coat investors ought.
[13:08]
A
You know, I think that the one thing that I would harp on is for, and I know this kind of a more specific crowd, but for medical students, I look at fourth year as the best opportunity for a lot of this education. You know, I don't think there's a ton you can do as a medical student as far as, you know, investing and things like that. And a lot of the advice that, you know, I got from you and in your book, you know, there's not a lot you can do when you don't have an income. There are some wise things you can do, certainly, and I encourage everybody to do that. But, you know, you have fourth year of med school. If it's anything like my fourth year, it's almost the biggest waste of medical education in history. You know, you pay full tuition, you're gone half the year, you have all these kind of easy classes and you have all this free time. And so I encourage everyone I meet to self educate as much as you can. And that's in general, but especially as a medical student, you have all this time to travel to interviews or, you know, some people spend a month in Cambodia or Bali or whatever they do. And there's all this opportunity to get ready for the next step. And so I always tell people, get the podcast, get some books on, some audiobooks, get some hard books, whatever. You need to just start reading and educating yourself, because, again, to your advice, nobody's going to care about this more than you will. And so you need to take ownership and take control, and I think that's the best opportunity to do so.
[14:29]
B
Yeah, that's good advice. Well, you've been very successful. You should be very proud of yourself. This might be the first big milestone you hit when you get back to broke, but I have a feeling you're going to get through a whole lot of others in a pretty good hurry. So congratulations to you, Alec. Well done. Be proud of yourself. And thanks so much for being willing to come on the podcast.
[14:48]
A
Thank you so much. It's been awesome to be here. Really appreciate it. All right.
[14:52]
B
I hope you enjoyed that interview as much as I did. It's wonderful to see that it works, Right. There's nothing really terribly complicated about what we tell people to do here with their finances. And a lot of the benefit, I think, of this milestones podcast is that we just get to trot people out at different points in their career and say, hey, look, if you just do this stuff, it works, right? Here's a doc Back to broke already before even being done with training. Right. It's way ahead. And sometimes you feel like you're behind when you're in something that has a long training period like orthopedics, you know, five years of residency and a year of fellowship. Well, you know, the emergency docs out there have already been earning 350 or $400,000 a year for three years by the time you come out of training. And so it's good to see people making progress even while they're in training, particularly when they're in these longer training programs. Now, obviously, an orthopedist generally makes more money than an emergency doc and most other specialties. He's going to be fine. But the fact that when he gets money, it hits prepared hands goes a long way. He already knows what to do with it. He's got a plan for the next year. And if you, as you come out of training, if you will just have a written financial plan for what you're going to do with those first 12 monthly paychecks, you're ahead of 95% plus stocks. You're actually got something you're working toward. And when you have a plan, you achieve Your goals. It's amazing. It works very well. So I encourage you to do that. I'm bringing people on here that are not me that are doing that as well to demonstrate this works. And look how much peace of mind they have, because they know they're on a pathway that leads to financial success. Even if we're still celebrating their first milestone, right? I mean, his net worth is zero. He's worthless, right? But look at his future. It's going to be awesome. And so will yours if you also take care of your finances. Let's talk about net worth for a minute. Net worth is perhaps the most important number, certainly one of the few important numbers in personal finance and investing. A lot of people get fixated on their credit score. Your net worth is dramatically more important than your credit score. As far as financial numbers go. Don't worship at the altar of fico. If you're going to concentrate on stuff, concentrate on things like how much you have in investable assets and your savings rate and your net interest worth rather than your credit score. Net worth is everything you own minus everything you owe. Technically, it includes everything. Your clothes, your computer, your vacuum, everything, right? But in practical speaking, what most people include on the asset side is their investments and bank accounts and their home. And that's usually about it, right? Your investments in your home, and those are kind of the big chunks. If you can calculate that much each year, that's probably enough. You don't have to go crazy assigning values to your cars or your RVs or your boats or your clothing or your jewelry or anything like that. If you want to, you can. It technically is part of your net worth, but a lot of people leave that out of any sort of annual net worth calculation. They do. On the other side of the ledger is your liabilities, your debts. Right. Credit card debt, all auto loans, your mortgage. Right. So your net worth includes your home equity. But you got the value of the home on one side, you got the value of the mortgage on the other side of the ledger. You subtract the liabilities from the assets and that's your net worth. If you're like most doctors, your net worth starts out negative, right? 75% of doctors pay for medical school loans. So when they come out of their residency or fellowship, when they're 31 or 35 or whatever, their net worth is negative because they got two or three or $400,000 in student loans and $10,000 in assets. So they have a negative net worth, and that's okay. The point is not where you start, it's the direction you're moving in and the speed you're moving at. Now I get lots of questions about net worth. People want to get into specifics of what should be included and what shouldn't be included. For example, they ask about accounts like 529s and UTMAs and your children's custodial Roth IRAs and your donor advised funds. And the truth is you can include those if you want. But I think the important thing is to be consistent because what you're really looking for here is the trend that you're moving in. Now, technically, in one respect, the 529 belongs to you. Even though your kid's the beneficiary, you could pull all the money out, pay any taxes and penalties on doing so, and buy a sailboat with it or put it in your taxable account. It's technically, technically your money. It's interesting though, for estate tax purposes, it's already been considered a completed gift to your kid. So a little bit interesting there with 529s. A lot of people look at these sorts of things for their children's accounts and they don't count them in their net worth because they consider them. It's not mine anymore, it's my kids. So 529s, UTMAs, these custodial accounts and custodial Roth IRAs, for instance, they don't count in their net worth because they view it as their kids money. And I think that's very reasonable when it comes to a donor advised fund, a daf, that's particularly true. You can't take that money out, just like you can't take out your kid's Roth IRA or your kid's UTMA account and put it in your own account. It's gone. It's definitely a gift you've already given away. But if you want to include that in your net worth, I think that's okay too. Just be consistent year to year. A more important number than net worth is probably your investable assets. Okay? This is a number that you can actually use for something important and make decisions with. Net worth is more like kind of interesting and neat to know and make sure you're moving in the right direction, that sort of a thing. But your investable assets is a number you actually use to do financial planning. For example, as a general rule, you can take out about 4% of your investable assets per year and expect your money to last in retirement for at least 30 years with a very high probability.
[21:02]
A
Right?
[21:03]
B
That's not your net worth, though. That's your investable assets that you multiply by that number. So that generally just includes your investments. Most people don't include their home in that they typically don't include their debts in that. They typically don't include something like 529s or utmas or donor advised funds or something like that. It's just your investments, right? If you have rental properties, you'd include that. If you have, you know, retirement accounts, you'd include that. If you have taxable brokerage accounts, you would include that all in your investable assets. What I wouldn't necessarily try to do, though, is somehow put a dollar value on income streams you have. If you have bought a single premium immediate annuity, this is a pension you buy from an insurance company. I would not include the value of what you paid for that any longer in, in your investable assets. Same thing with Social Security. Don't try to assign a dollar value to it and put it in your investable assets or your net worth. Same thing with a pension, right? If you have a pension, you've already annuitized it. It's now an income stream. I wouldn't include it in your investable assets. When you go to calculate how much you need out of your portfolio, you subtract all those sources of guaranteed income from the amount of income you need. So if you say, I need $150,000 to live on and I'm getting $20,000 from a pension and I bought an income annuity that'll pay me $20,000 a year and I'm getting $40,000 from Social Security, well, now you only need your portfolio to provide you $70,000 a year, not $150,000 a year. But I wouldn't try to assign a value to any of those assets and put them into your investable assets. I would leave them out and just subtract the guaranteed income from the amount you need it. So net worth is worth calculating once a year. You or your financial advisor certainly needs to know what your investable assets are so you can do financial calculations, financial planning with that number. But these are numbers worth calculating once a year, whether you're a do it yourselfer or whether you're not, just to track how you're doing, where you're going. The question we get a lot is, do we pay down debt or do we invest? And the truth is, both of those are good things to do. Both of them increase your net worth, right? And they generally increase your investable assets as you go along as well. So don't worry so much about where your money's going in that respect, more about how much of it's going toward these good things that build your net worth. Hope that's helpful to you. Our sponsor for this episode is Lightstone Direct. You're an institution. Time to invest like it With Lightstone Direct, you can access the same private opportunities Lightstone pursues with its own capital. In fact, Lightstone invests at least 20% of the equity every time. That's real alignment and a 12 billion asset under management owner operator in your corner. The just launched Multifamily opportunity features 7.4% target net cash on cash with monthly distributions. Visit Lightstone Direct to learn more. All investments involve risk. Please visit lightstonedirect.com for disclosures. All right, we've come to the end of the podcast once more. Keep your head up, your shoulders back. You've got this. We're all here to help you be successful. See you next time on the Milestones Podcast.
[24:28]
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.