White Coat Investor Podcast #437: Getting Your Work Benefits Right

Date: September 18, 2025
Host: Dr. Jim Dahle
Guests: Don Wenner (DLP Capital)

Episode Overview

This episode focuses on helping high-income professionals, especially doctors, navigate employer-related financial benefits—with a particular emphasis on understanding nuanced benefit choices (such as group disability insurance), Employee Stock Ownership Plans (ESOPs), and annuity options as participants approach retirement. The episode also features an in-depth conversation with Don Wenner from DLP Capital, covering real estate investment opportunities for doctors who want to diversify or stabilize their portfolio outside traditional market options. Listeners' questions drive the discussion, offering practical advice rooted in real-world scenarios.

Key Topics and Discussion Points

1. Opening Stories and Announcements

[00:00–04:30]

• Dr. Dahle shares a personal anecdote from a recent endocrinology telemedicine appointment, appreciating efficient virtual care.
• Event Highlight: Financially Empowered Women (FEW) event on September 22, focusing on wealth, social narratives, and financial empowerment for women. "We're totally into that at White Coat Investor. I don't care if you're a man or a woman or a doc or not a doc. We want you financially empowered." (04:18)
• Encourages listener participation via SpeakPipe for Q&A segments.

2. Employee Stock Ownership Plans (ESOPs) in Private Practice

[04:40–10:25]

Listener Question:
A doctor asks if private medical practices can transition into ESOPs, and whether they’ve been successful—citing dissatisfaction among their own group after such a transition.

Dr. Dahle’s Analysis:

• Definition: ESOPs are qualified retirement plans (from Section 401A), commonly involving company stock as a defined contribution.
• Risks:
  • Overexposure to employer stock (“classic Enron problem”) risks losing job and retirement simultaneously if the business fails.
  • Not always tailored for small practices—often more typical in large public corporations.
• Advice:
  • Diversification is crucial. “Don’t have all your money tied up in your employer stock.” (06:22)
  • If the ESOP is a bad deal, minimal participation is recommended; push for collective dialogue with management if no one benefits.
  • “If it’s really a bad deal for all the docs, why don’t all the docs get together and start talking with management about why they have this terrible deal put in place?” (07:35)
• Guideline: Personal employer stock should be less than 5% of an individual’s portfolio.
• Key Quote: “If the company is not doing well, owning the stock is not going to do well. There’s no doubt about that.” (08:18)

3. Group Disability Insurance: Tax Choices

[10:25–12:52]

Listener Question:
Asked whether to pay taxes on the premium or on the benefit for an employer-paid group long-term disability plan.

Dr. Dahle’s Analysis:

• Typical Structure: Usually, the employer deduction means benefits are taxable to the employee.
• When Given a Choice:
  • Pre-tax Premium: Reduces current tax burden but makes the benefit taxable if claimed.
    • Suited for most, as statistically, few will become disabled and, if so, they’ll be in a lower tax bracket.
  • After-tax Premium: Makes future benefits tax-free, maximizing possible disability income.
• “If I had the choice, I would probably pay for it pre-tax… your income is going to be significantly lower living on disability insurance… and given the progressive nature of our tax code, I think that’s OK to deal with guaranteed tax break up front.” (12:09)
• Both choices are reasonable; it depends on risk tolerance and personal tax preferences.

4. Understanding Annuities for Retirement Income

[12:52–20:57]

Listener Question (Andrew):
Clarifies differences between SPIAs, SPDAs, and "MYGAs" as fixed income alternatives to bonds, especially as he nears retirement.

Dr. Dahle’s Analysis:

• Definitions:
  • Annuity: Insurance product with various features, often complicated and commission-driven.
  • SPIA (Single Premium Immediate Annuity): Simple: lump sum now in exchange for monthly payouts until death.
  • MYGA (Multi-Year Guaranteed Annuity): The “insurance industry's answer to CDs”—fixed guaranteed rate, tax-deferred until withdrawal.
• Tax Deferral: Advantageous for those in high brackets now, expecting lower rates later.
• Cautions:
  • Not all products sold by reputable institutions (e.g., Fidelity, Vanguard) are necessarily good.
  • Complexity and fees can be pitfalls; buyers must understand the product.
• Quote: “The key to all these annuities is you have to understand what you’re buying and you have to want what it is they’re offering.” (18:43)
• Result: MYGAs are a reasonable option for some, but traditional bonds/CDs are also fine.

5. Real Estate Investing with DLP Capital (Guest: Don Wenner)

[20:57–31:39]

About DLP Capital:

• Mission: “Our purpose is to transform lives through the building of thriving communities.” (21:22)
• Business Model: Offers evergreen private real estate funds with a focus on affordability for working families, and distinguishes itself with structure, investor relations, and discipline (the “Elite Execution System”).
• Unique Features:
  • Evergreen structure (not closed-end), offering investor flexibility and liquidity.
  • Large-scale organization (800 employees, 35 accountants), ensuring timely distribution and reporting.
  • Provides both lending and equity funds; has never missed K-1 or distribution deadlines.
  • “We pay out our distributions every month. We pay them out before we even earn a preferred return or even before we earn our management fee.” (25:16)
• Funds Available:
  1. Lending Fund: First position mortgages to housing developers—double-digit annual returns, 8% preferred, 90-day liquidity.
  2. Preferred Credit Fund: Similar to Lending Fund, 9% preferred return.
  3. OP Housing Fund: Owns existing communities, 17.4% net annual returns, sheltered income, annual liquidity.
  4. Building Community Fund: Invests in new construction, 11–13% targeted returns, 8% preferred, annual liquidity.

On Volatility and Consistency:

• Real estate (especially affordable housing) provides more consistent, less volatile long-term returns than equities, and is undersupplied historically.
• “Rents have gone up almost every year the last 40, 50 years... Regardless of inflation, deflation, or interest rate environment, rents continue to go up.” (29:46)

6. Capital Calls and Cash Management for Private Real Estate Investments

[31:58–32:51]

Listener Question:
Is it better to keep capital call money in the market (for returns) or in cash (to avoid risk) while awaiting private fund call deadlines?

Dr. Dahle’s Recommendation:

• Risk: Keeping funds in the market risks needing to sell during downturns if capital is suddenly called.
• Preference: Keep short-term funds in high-yield money market funds (currently paying 4%+), which balance safety and some yield.
  • “I don’t typically invest the money for this relatively short period… I leave it in cash.” (33:43)
• Alternative: Could use real estate funds (like VNQ) if you desire more risk—but generally unnecessary for such short-term holding periods.

Notable Quotes & Memorable Moments

• “Don’t have all your money tied up in your employer stock.” (06:22) — Jim Dahle
• “If the company is not doing well, owning the stock is not going to do well. There’s no doubt about that.” (08:18) — Jim Dahle
• “If I had the choice… I would probably pay for it pre-tax… your income is going to be significantly lower living on disability insurance than it would be with whatever you were making before… that’s OK to deal with guaranteed tax break up front.” (12:09) — Jim Dahle
• “The key to all these annuities is you have to understand what you’re buying and you have to want what it is they’re offering.” (18:43) — Jim Dahle
• “Our purpose is to transform lives through the building of thriving communities.” (21:22) — Don Wenner
• “We pay out our distributions every month... before we even earn a preferred return or even before we earn our management fee.” (25:16) — Don Wenner
• “Rents have gone up almost every year the last 40, 50 years... Regardless of volatility, regardless of time of inflation... rents continue to go up.” (29:46) — Don Wenner

Timestamps for Key Segments

• [00:00] – Intro & Announcements; value of telemedicine
• [04:40] – ESOPs in medical private practice risks and strategies
• [10:25] – Opting for taxation of group disability insurance
• [12:52] – Annuities: SPIAs, MYGAs, fixed income for retirement
• [20:57] – DLP Capital: Mission, funds, and structure (Don Wenner interview)
• [31:58] – Managing cash for real estate capital calls: Market vs. money market fund

Conclusion & Takeaways

This episode reinforces the importance of deeply understanding work-related financial benefits, the risks of over-concentration (especially employer stock), strategic use of insurance and annuity products, and the power of mission-driven, disciplined real estate investment. Dr. Dahle's practical advice—anchored in listener questions—equips high-income professionals to maximize benefits, avoid pitfalls, and make confident, well-informed financial decisions.

For more depth or registration for events, check resources at whitecoatinvestor.com.