White Coat Investor Podcast #439: Where to Bank and How to Save for Big Purchases
Host: Dr. Jim Dahle
Date: October 2, 2025

Episode Overview

In this episode of the White Coat Investor Podcast, Dr. Jim Dahle answers listener questions about practical money management for high-income professionals, focusing on banking choices when relocating, strategies for saving for large purchases, best practices for financial transitions mid-career, managing gifted investments for children, and decisions around federal student loan repayment. The episode emphasizes straightforward, actionable approaches to topics often made unnecessarily complicated within the world of personal finance for doctors and other high earners.

Key Discussion Points & Insights

1. Relocating and Where to Bank

(Starts ~03:00)

• Listener Scenario: Moving to rural Minnesota, considering switching from a national bank lacking local branches to a local bank or credit union, and wondering if it’s best to bank where you get a physician home loan.
• Dr. Dahle’s Breakdown:
  • Convenience Matters: Local banks can offer unique services, such as a free notary, and are useful for in-person needs, but national banks provide stability and easier transitions when moving.
  • "It’s a pain to change checking accounts... there’s something nice about having a large national institution." – Dr. Dahle [08:48]
  • Often, you can have both a national and a local account—each serving different roles.
  • Savings Rates: Most high-yield accounts/money market funds with the best interest rates are online or at large brokerages (Vanguard, Fidelity, Schwab). Local options rarely compete here.
  • Physician Home Loans: Focus on getting the best mortgage terms; if a bank requires you to open an account, do so, but don’t let that dictate your banking strategy.
  • "You might end up with your big national bank, a Vanguard or something account, and maybe a local bank account when all is said and done.” – Dr. Dahle [13:25]
  • Emergency Funds: 3–6 months is common, but 4 months of spending is often ideal, stored in a money market fund for safety and liquidity.
• Actionable Steps:
  1. Choose where to keep your emergency and short-term savings—preferably a money market fund at a big brokerage.
  2. Pursue the best physician mortgage, then open any required local account.
  3. Retain or change checking services based on practicality.

2. How to Save for Large Purchases

(Starts ~19:41)

• Listener Scenario: Is it better to put all savings into retirement accounts and borrow for large purchases, or save in cash investments for things like a house or boat?
• Dr. Dahle’s Guidance:
  • Segregate Savings by Goals: Use retirement accounts (401k, IRA) for retirement; use taxable money market accounts for short-term, planned purchases.
  • “If you’re saving up for something in the short term… this isn’t money that should be invested in stocks or real estate... Earn something on the cash while it’s sitting there, but you can put that in the same place as your emergency fund.” – Dr. Dahle [17:49]
  • Retirement accounts should not be tapped for short-term goals, except in rare, rule-based exceptions (e.g., Roth IRA contributions for first-time homebuyers) — but even then, it’s not optimal.
  • Borrowing for Luxuries: Avoid leveraging for depreciating assets (like boats); only buy with cash after ensuring you’re saving enough for retirement (20% of gross income as a guideline).
  • “A boat is not a wise financial decision. I own a lot of boats. None of them are smart as far as finances go… they’re a way to spend money to try to get a little bit more happiness.” – Dr. Dahle [21:28]
  • Simple Strategy: Set a savings goal, put cash in a money market fund, and do not complicate with unnecessary borrowing or complex account strategies.

3. Mid-Career Transitions: State-to-State Job Change and Financial Account Considerations

(Starts ~27:24)

• Listener Scenario: Tips for mid-career physicians switching W2 jobs across states—handling real estate, 401(k)s, 457 plans, 529s, and taxes.
• Dr. Dahle’s Checklist:
  • Real Estate: Avoid owning two houses at once. Use contingencies for home purchases/sales or a bridge loan for short-term overlap, but be careful not to get stuck paying for two homes.
  • Taxes: Usually, file as a part-year resident in one or both states in the year you move. Seek accountant advice—straightforward but must be done correctly.
  • Old Employer Retirement Accounts:
    • No rush to roll over 401(k)s/403(b)s; often, you can leave funds in your former employer’s plan.
    • Rolling over to the new employer’s plan is preferred for those using the backdoor Roth IRA method, to avoid pro-rata rule complications (avoid traditional IRA balances).
    • Governmental 457s can typically be rolled into IRAs or new plans; non-governmental 457s can only be combined with similar plans or should be spent early in retirement.
  • 529s: Can keep using the old state’s 529 plan unless the new state offers compelling incentives.
    • “There are a lot of states that if I moved to, I would still be using the Utah 529 because it’s better than theirs.” – Dr. Dahle [35:04]
  • Insurance: Secure equivalent disability insurance if previously covered through the employer.

4. Optimizing a Child’s Large Gift of Stock (Apple Stock in a UTMA Account)

(Starts ~41:02)

• Listener Scenario: Grandparents gifted $30,000 in Apple stock to a child’s UTMA account; parents want to diversify but are mindful of tax implications.
• Dr. Dahle’s Analysis:
  • Smart move to gift appreciated stock to a low-tax-bracket family member.
  • Understand kiddie tax rules:
    • First $1,350 in unearned income is tax-free for the child.
    • Next $1,350 taxed at child’s rate (long-term gains: 0%).
    • Beyond that, gains taxed at parents’ marginal rate.
    • Large capital gains now, but if the child holds the stock until early adulthood and has a low income, more of the gain may be realized at 0% rate.
  • Approaches:
    • Wait-and-hold: Keep the Apple stock and only diversify once the child is older/lower tax bracket (but risk of non-diversification).
    • Gradual Sell: Each year, sell enough gains to stay within the child’s 0% bracket (minimize taxes, takes years).
      • “You’re kind of weighing these capital gains taxes with diversification. And this is an issue people have all the time with legacy investments.” – Dr. Dahle [45:49]
    • Immediate Sell: Diversify now, pay some capital gains, and reduce individual stock risk.
  • Tip: "When you find yourself in a hole, stop digging. So stop reinvesting the dividends." – Dr. Dahle [45:20]

5. Aging, Driving, and Advance Family Agreements

(Starts ~48:20)

• Listener Email: Family commitment arrangement for surrendering driving privileges when elderly.
• Dr. Dahle’s Reflection:
  • Commends the approach: make the agreement early to avoid difficult conversations or safety risks later.
  • Acknowledges the loss of independence, but sees wisdom in pre-committing.
  • “Because stopping driving is a big deal... but there’s a lot of truth there — to think about it in advance...” – Dr. Dahle [51:31]

6. Student Loan Repayment: Should I Plan on PSLF as a Med Student?

(Starts ~54:45)

• Listener Scenario: $350k in federal loans, debating PSLF (Public Service Loan Forgiveness) vs aggressive repayment after training, and worried about missing out on investment gains.
• Dr. Dahle’s Advice:
  • Don’t Decide Yet: The most important factor is whether your job after training is PSLF-eligible. Wait until you have that information.
    • “You don't make this decision as a medical student... the main factor is does the job you want qualify for PSLF or not?” – Dr. Dahle [55:24]
  • Use private refinancing only for private loans until sure you don’t want PSLF.
  • For aggressive repayment: Pick a date (ideally <5 years out of training) and work backwards—calculate how much to pay monthly to be debt-free.
    • Don’t be unintentional and let debt linger for years—pick a plan and stick to it.
    • If you’re hardcore about debt, pay it all off fast (even if it means missing some employer match or investment gains).
  • Do not obsess as a student: Learn, plan, but focus on your training. Adjust your financial strategy closer to finishing residency/fellowship.
    • “Don’t lay awake at night worrying about it. You should be worrying about how you’re going to pass the USMLE or how you’re going to pass histology... Worry about that. Don’t worry about the money so much.” – Dr. Dahle [1:03:28]

Notable Quotes & Memorable Moments

• On Bank Transitions:
  “Our main checking account is not a local bank. It’s a checking account we’ve had for literally decades... It’s a pain to change checking accounts.” [08:48]
• On Short-term Savings:
  “If you’re saving up for something in the short term, this is money you’re going to spend... you can just put that in the same place as your emergency fund.” [17:49]
• On Boats as Purchases:
  “A boat is not a wise financial decision. I own a lot of boats. None of them are smart as far as finances go... They’re a way to spend money to try to get a little bit more happiness.” [21:28]
• On the Backdoor Roth IRA:
  “White coat investors and other high earners don’t want to have any money in a traditional IRA... makes your Roth conversion each year for the backdoor Roth IRA process become prorated. And you don’t want that.” [32:31]
• On Diversifying Kid’s Stock Gifts:
  “You’re kind of weighing these capital gains taxes with diversification. And this is an issue people have all the time with legacy investments.” [45:49]
• Aging and Driving:
  “Because stopping driving is a big deal... but there’s a lot of truth there — to think about it in advance, recognize you’re probably not driving until the day you die.” [51:31]
• On Med School Loans:
  “Don’t lay awake at night worrying about it... As long as you’re intentional, reasonably financially literate, reasonably financially disciplined, you can take care of your med school debts.” [1:03:28]

Timestamps for Key Segments

• 03:00 – Where to bank after relocating (local vs national, home loan advice)
• 17:49 – Where to park emergency fund and short-term savings
• 19:41 – Saving for large purchases: cash vs investing vs borrowing
• 27:24 – Financial checklist for mid-career state-to-state job switches (401k, taxes, insurance, 529)
• 41:02 – Handling large appreciated gifts (Apple stock) in a child’s UTMA account
• 48:20 – Advice for families on aging and driving privileges
• 54:45 – Med student with $350k debt: PSLF vs fast repayment and opportunity cost concerns

Summary

Dr. Jim Dahle delivers pragmatic, clear, and non-judgmental advice grounded in simplicity and intentional financial planning. He steers listeners away from complicated schemes, emphasizing the importance of matching savings strategy to actual goals, maintaining diversification, being tax aware, and not getting bogged down in unnecessary financial stress. This episode is particularly helpful for medical and dental professionals facing career transitions, major life changes, or simply seeking a logical approach to their most common money questions.