Review of The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing

white coat investor kindle-01-01It has been a big week here at The White Coat Investor.  After months of writing, months of rewriting, weeks of editing, and weeks of formatting and proofing, my first book, The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing went up for sale on Amazon and Kindle on Monday.  By the way, if you still haven’t gotten your copy, the promotional discount period for the print version ends tomorrow.  Didn’t know there was a promotional period?  Better sign up for the newsletter.  Unlike the book, the newsletter is free.  The list price for the book is $24.99, but Amazon offers a significant discount.  If you can’t afford it at that price, you REALLY need to read it (and can get the e-version for $9.99 on Kindle or Nook)  I hope to have it available soon on Itunes/Ibooks.  It has already hit # 1 in its category on Amazon and is # 1 in both of its categories on Kindle.

The Review

So I thought I would take this opportunity to review the book.  Who says you can’t review your own book?  Nobody.  It’s my blog, and my book, and I can review it here if I darn well please.

The process of writing and publishing a book has been immensely humbling, and I have become so much more appreciative of authors as a result of going through it.  I hereby resolve to start going a lot easier on them when I review their books, beginning with this one.
medical student loan refinancing
There are only a handful or two of physician-specific personal finance and investing books.  They usually fall into two different categories.  The first category is written by financial advisors who specialize in serving (and marketing to) physicians.  The books are generally written to establish the authors as authorities and to market their financial advisory practice.

The second category of book is written by physicians themselves.  While I’m sure these doctors would love to sell thousands of books and make a killing on their book, the fact that this is a relatively low volume niche essentially ensures that the royalties on their books will probably never approach what they can make in a single month at their medical practice.  Thus, their motives are a little more pure than those of the advisors writing books.  There are really only three physician-specific finance and investing books out there written by physicians, and this one is the best of the three.  Of course, Jeff Steiner, DO, and Robert Doroghazi, MD, may disagree, but they’re wrong.  I know because I read their books before I wrote mine and stole all the good stuff.

Getting The Length Right

My goal with the book was to keep it short enough that any doctor who picked it up could finish it.  The original manuscript I sent out to volunteer reviewers (readers of this blog including physicians, attorneys, accountants, and financial advisors) was only about an hour and a half worth of reading.  They all asked me to include more and to clarify many of the concepts.  I ended up adding six more chapters and doubling the length of two others, while adding many explanations to the remainder of the text.  As a result, the book now takes a typical reader about five hours to read, cover to cover.  I worry that five hours is too long of a book for many potential readers who need to read this book.  Many of those who need the information in this book find reading about this stuff insanely boring and terribly dry.  They don’t necessarily read this blog, much less spend time on online financial forums or in the investing section of the library.

I’m sure some who read the book will wish it were longer, more of a comprehensive look at every financial planning and investing topic ever covered by this blog.  I would remind folks looking for a comprehensive book that this blog has nearly 500 posts on it, averaging something like 1200 words each (not including the comments section.)  If I included everything, it would take about 67 hours to read the book.  I already have one physician-specific book that is way too long on my bookshelf.  I’ve been trying to get through it for over a year so I can write a review.  I figure if I can’t get through it, almost no one can.  The world doesn’t need another one of those, much less a 600,000 word book.  So I hope the current length is a good compromise between providing enough meat for advanced readers, and being accessible to otherwise intelligent people as a first personal finance/investing book.  Each chapter has a list of links and other resources for those looking for more information on that particular topic.

Strengths of the Book

The primary strength of the book is that it is written by me, and I’m the world’s greatest author.  Not really, but I do have one advantage over other authors on this topic.  I edit (and do much of the writing for) the world’s most widely-read, physician-specific, personal finance and investing blog.  Plus, I’m not trying to sell you anything (well, except the book.)  Seriously though, for the last three years I have been receiving and answering something like a dozen financial questions from physicians every day via email, blog comments, and online forums.  If anyone knows what financial questions doctors have and what dilemmas they wrestle with, it’s me.  So I’ve leveraged that knowledge into a high-yield, straightforward, unbiased, low-cost, money-saving, money-making resource just for you.

I think one of the best chapters in the book is the second chapter, entitled Millionaire by 40, in which I discuss how I reached a seven figure net worth in just ten years from medical school graduation.  The best part of the chapter, however, isn’t my story, but the five others from your fellow blog readers, ranging from family docs to OMFS surgeons, outlining how they found financial success following the principles outlined in the book.

Two other great chapters in the book are the ones on asset protection and estate planning.  These topics are made to seem so complex, but I think I boiled them down quite well to their essence, and wish someone had handed the information in these chapters to me a few years ago.

Weaknesses of the Book

I’m not actually a great writer.  Sorry, but this won’t be the most entertaining book you ever read.  This is the first book I’ve ever written, and the first book I’ve ever published.  Although I had dozens of people look at it prior to publication, and actually paid an editor to formally edit it (unlike any of these blog posts), I’m sure there are still some errors.  As you find them, please post them on the Errata Page, and I’ll fix them either in the current edition (one benefit of self-publishing) or in the second edition.  I also have literally no degree or certification that would qualify me for this endeavor.  No CPA, no JD, no CFA, no CFP, no ChFC, no CLU,  and no MBA.  I didn’t even major in business.  My only qualification is that I know more than (most of) you do about this stuff and I actually care that you succeed in your practice and your personal finances.

Insuring-Income-250x250-bannerI think the worst chapter in the book is Chapter Eight, the chapter discussing how a portfolio of index funds is a great default investing strategy.  Having read many books on this topic by Ferri, Bernstein, Swedroe, Bogle, and others, I think I did a relatively poor job of explaining the concepts.  Part of the problem is that I tried to put an entire book’s worth of information into a single chapter.  The good news is that when I publish a book specifically on that topic, it will be a lot better.

Nice Things Other People Say About The Book

“Jim Dahle has done a lot of thinking about the peculiar financial problems facing physicians, and you, lucky reader, are about to reap the bounty of both his experience and his research.” – From the Foreword by William J. Bernstein, MD, author of 7 investing books including The Four Pillars of Investing

“The advice is practical, well-researched, and applicable to medical students to attendings. Dahle does a great job of explaining complex financial concepts in bite-size amounts, but doesn’t talk down to the inexperienced investor. How I wish I had this book when I entered medical school! I would have structured my investments and student debt so very differently.” – From an Amazon review

“An excellent practical personal finance guide for physicians in training and in practice from a non biased source we can actually trust.” – Greg E Wilde, M.D

white coat investor kindle-01-01“This book should be mandatory for anyone in the healthcare field. With its straight forward approach to tackling debt and laying out a financial plan for the future, this book saves the young doctor thousands of dollars and years of trying to figure this stuff out for themselves.” Jeff Anzalone, DDS, Author of What They Don’t Teach You in Dental School

“I finally have the knowledge and confidence to say goodbye to my overpriced financial advisor.  Thank you.”     – Todd Bethel, M.D.

If this review has convinced you to buy the book, you can do so right now on Amazon or Kindle.  If you’re not yet convinced, take a look at the Book Description, the Introduction (Why You Should Read This Book), and the Table of Contents.  You can even read the Foreword by Dr. Bernstein and the First Chapter FREE on the Kindle Site.

Have you read the book?  What did you think?  Was it worth the time and money?  Would you recommend it to others?  Comment below!

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Comments

Review of The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing — 55 Comments

  1. Care to comment on how much additional content the book will add for long-time readers like me who have (literally) read every post on the site?

    I intend to buy one (hurry up with the IBook already!!) as a way of saying thanks for all the great content over the years either way.

  2. Found the blog about 2 months ago. Spent the last 2 months reading the entire archives in chronological order. Having everything so fresh in my mind and then reading the book I felt you did a great job of hitting the highlights and reminding us of the basics.

    The blog and book saved me from starting an “investment” into a 40k/year whole life and another 20k/year annuity. Since I am an avid DIY and am looking on putting together my portfolio can anyone suggest a book on that? I read the 150 portfolio post during my marathon reading, but am looking for something with more detail than a post allows.

  3. If you’re not already sold on the concept of creating your portfolio with passive index funds, I’d recommend The Little Book of Common Sense Investing by John Bogle.

    For asset allocation, I would strong recommend Rick Ferri’s All About Asset Allocation.

  4. Thank you JS. I finished Bogleheads’ Guide to Investing last week and am sold on the passive approach. I don’t have time to really do anything else, nor do I want to. John Bogle’s book was on my list and I will add Rick Ferri’s also.

  5. I just finished the book last night. I agree that this is a beginners guide to physician finances. It explains all the things that a financially knowledgable MD or other high earner needs to know to be successful. Almost all the content of the book can be found on the website but this is an easy to read, concise and all in one place to find the advice that we all have been following for months to years. I view this as a way for me to pay back for all that I have learned from the blog.

    One question I have is the formula used in the book for Expected Physican Net Worth Rule: EPNW = salary x years in practice x 0.3-$200,000

    If following your principles in the website and book I should be putting 20% of my income into retirement, according to your calculation that would only leave 10% for student debt reduction which is today’s high interest student loan world (6.8%) would only have $115,000 of student loans paid off in a 5 year peroid. I think that your formula may work for those later in their career, but for the new attending I think closer to 35%-40% of salary should be devoted to retirement and paying off debt.

    I just find that following your advice and apply the math to your EPNW rule don’t seem to entirely add up. That is the only inconsistency I have found in the book and my only (albeit minor) critque.

    • Thanks for the valuable criticism.

      The EPNW rule (slightly modified from the one previously posted on the website by the way) isn’t perfect by any means. But it is a heckuva lot better than the one by Stanley and Danko for physicians. It may even have to be changed in the future as the average student loan burden goes up.

      I agree that a new attending should be putting far more than 20% of his gross salary toward building net worth by paying down student loans, saving for retirement, and saving up a downpayment. That was the point of chapter 6, where the reader is instructed to live like a resident for 2-5 years after residency graduation. A doc who goes from an income of $50K to $250K upon residency graduation can save 20% for retirement ($50K) pay 20% in taxes ($50K), put another 20% toward debt reduction and/or a downpayment ($50), and STILL double his standard of living compared to when he was a resident.

      Hopefully, if a doc follows the advice in chapter 4, he won’t have more than the average student loan burden (currently around $200K) upon graduation, and can refinance that as low as 3% variable, 5% fixed.

      It is true that the vast majority of the information in the book can be found somewhere in the 600,000 words on the website and if you have read every single page on the website, you’ll only find a little bit of material that is completely new. But the material is a whole lot better edited and placed into a framework that will help even those few docs who have read every page of the website. If you read the book, and didn’t learn a single thing, all I can say is congratulations, you are going to do very well financially in your life! Please submit a guest post.

      • I agree, and my no means was my critism a knock at the book. I think it very well written, concise and perfect for your target audience–people like me two years ago who had NO idea about financial planning. The book is much more accessible and has the most important information to anyone new to financial planning. Even for someone like me who frequents your site, Rick Ferri, and of course Boglehead–I learned a few things and just picked up Bernstein’s Deep Risk based on what I learned in your book.

        I agree about your EPNW, finished The Millionaire Next Door approx a month ago and was like–that formula in no way applies to me–perhaps only when nearing retirement. I do like your rule much better and perhaps after these next 4-5 years of living like a resident, the formula will be of more value.

      • I’m reading the book and I love it. I’m 35 and do family medicine, the topics in the book can be referenced on the website which is wonderful. It’s very easy to read, very well written but everything packs a punch.
        I replied to this thread in particular because I was wondering if the “salary” value of the equation would be gross or after-tax income. I totally understand that this is just a guide so by no means am I trying to beat a horse to death. But the numbers you use in your book all make really good sense and I appreciate that; I’m hoping to get every last bit out of it.
        Thanks for being here for us non-financially savvy docs.

  6. The book is now ranked #340 on Amazon, out of all the books in the world (about 4 million on Amazon). It is #1 in mutual funds, # 5 in the broader investing category, and # 57 in business and investing books. It’s fun to see it climbing the charts.

    Update: Make that # 304.

  7. Just ordered the book through the link at the top of the page (affiliate I hope?). Hope the book does really well, looking forward to sharing it with my friends.

  8. I have been reading your blog for over a year now. I started in medical school reading many of the texts you have recommended, so I am glad to know I was on a good track then. I have been an academic attending for 1.5y now and my wife has 1.5y of residency left. With my academic appointment, I have an opportunity to offer a selective to the medical students on finance, and prior to your book I was not sure the best way to structure it. Now I think I will use your book as a outline and a recommendation for further reading. Thank you.

  9. I looked through the preview on Amazon and promptly ordered a copy. Thanks for all your work on this blog and for using your expertise to create the book.

  10. Congrats on your book!

    I really enjoyed reading Chapter 2 “Millionaire by 40″. It’s always interesting/educational to hear about other physicians’ success stories, and to gauge how well/not well I am doing amongst similar minded folks.

    Just a suggestion, but have you thought about including a series of physicians’ success stories on your blog? I’m sure there are many other interesting stories from your readers that we could all learn from.

  11. Well, I’m ending the promotional period today. You may still have a few hours at the lower price until Amazon updates. I’ll be interested to see what Amazon prices it at when I put the list price at $24.99. I’m also in the process of submitting to Nook and Itunes/Ibooks.

    I’d consider this a very successful launch. I’m currently ranked #210 out of 4 million or so books on Amazon, number one in Mutual funds, # 3 in the larger investing category (ahead of all of Kiyosaki’s books and all but one of Jim Cramer’s, not to mention all the good books out there), #29 in the even larger business and investing category.

    On the Kindle side, it is # 2618 overall, # 1 in both of its smaller categories, (Physicians and Mutual funds), #1 in Physician and Patient, # 3 in investing, # 11 in Medical eBooks, #19 in Professional and technical, and #36 in business and investing.

    That’s pretty good for a self-published book in such a tiny little niche. Thanks to all my regular readers for their help with the launch!

  12. Congratulations on your book…!!

    I have been following your blog for almost a year and your advice is of great help to many young doctors like me. I really appreciated your prompt replies to my personal questions….
    It’s my time to say thank you…just ordered your book.

    Keep the good work going on…

  13. Been reading your website for a while now. Really appreciate all you do and your prompt response to emails. I ordered my copy of the book 2 nights ago. Keep up the good work and once again, thanks!!!

  14. bought the kindle edition of the book yesterday with the intent to gift/loan it to my sister who is in her last year of residency.

    But of course I read it first.

    I really enjoyed the chapter on protecting your assets, it was probably my favorite one.

    The one thing that really struck me was the chapter on you achieving paper millionaire status last year.

    What struck me was how profound high income makes on ability to accumulate wealth.

    I graduated dental school 2 years before you graduated from med school. And of course we dentists have no residency.. and i graduated with less than 15K of debt.

    But because i’ve never made over 200,000, didn’t even make over 100,000 in my first 5 years, didn’t get as solid of financial religion as early as you did (i didn’t hit optimal habits until after getting married in 2009.. but they were never poor).. I’m still not a paper millionaire. Although, somehow despite graduating 2 years before you i’m also 2 years younger.. so by the time I am 38 (assuming we get some market returns) I should hit paper millionaire also.

    I attribute some of that to being single a lot longer.. dating is expensive.. the bar tabs, the restaurants, the alcohol, the bad decisions. Some to some sub-optimal financial decisions (new car.. although I’m still driving it 10 years later), and some to starting my investments in 2002 and going through 2 pretty bad markets.

    Anyway.. good book, learned a couple nuggets which more than justified the $10 and my time spent reading it, and I can’t wait to pass it along to my sister.

    Cheers

    • Glad you liked it. Millionaire status isn’t a race. Remember one of the docs in Chapter two nearly hit $2 Million status something like 4 years out of training. It’s all about reaching your own goals and living the good life as you define it.

  15. I’ve read your blog for over 2 years and it never cost me one cent. I bought your book for $10 (partially to thank you). Your blog has been the best investment! I hope you continue to aid a community of good natured people (who are easily misdirected by wealth advisors).

  16. I have been reading your blog for about 9 months…excellent articles and it was all free. Just bought the book as mean to say thank you. Thank you for your continued commitment for financial education for physicians.

  17. Congratulations on a successful launch… I’m looking forward to reading the book, purchased kindle edition today. Any thoughts/plans on adding an audio-book version of this title?

      • I am surprised to learn that it costs a fair amount to produce an audiobook. There are plenty of niche market podcasts out there and I imagine it doesn’t cost much more to produce a podcast episode than an audio book. In my mind, you have to have a few hundred dollars of sound equipment (you want a new stereo right?) and someone to read the text. It didn’t take me long to read the book, so maybe you can hire an aspiring actor from the local university drama department(for cheap) to read and record it.

        Of course, since the book is written by an ER doc, we’d like an actor who played a famous TV ER doc to be the narrator. George Clooney is too old and too expensive. Maybe Anthony Edwards (Dr. Mark Green)? Maybe Noah Wylie (Dr. John Carter)? He is about your age!

        But seriously, a limited podcast series sold at $0.99 per chapter on iTunes would be great for busy docs to listen to on their commute.

        • That’s a pretty good idea. I have to be a little careful though. Some things sell well, and others don’t. For instance, I’ve sold 500 kindle versions and only 1 nook version.

          I looked into selling podcasts on Itunes and doesn’t look like you can charge for them. You can give them away though!

  18. Over two years ago I was searching for information on military physician programs and came across your site. Since then I have kept up with your postings and made some major changes in my family’s finances. It has been fun keeping up with your blog and seeing how much it has grown. I just ordered a copy of your book. If not for that financial advisor selling you loaded mutual funds we would have lost out on something great. Thanks for all the posts!

  19. Have been following your blog for a little over a year and between you and the Bogleheads have learned a ton. Really appreciate your efforts. Purchased/finished your book – great work. Thanks

  20. Buying your book tonight! I’m sure it’ll be worth every penny. Your blog has made a huge positive impact on our family’s finances. I started reading during my husband’s last year of residency and have learned so much. Thank you!

  21. Finished the book and left a review on Amazon. Great work on the book, I would expect nothing less from you! Thank you for the influence you have made on my financial life.

  22. I’m not a doctor, but I work in the investment industry and make a lot of money, and love to read all the blogs about investing. I’ll check out the book and comment later.

  23. Excellent book! You inspired me to do my own taxes this year instead of using a CPA. I found a deduction that he didn’t find last year and I plan to re-file my 2012 taxes. This more than paid for my book! In fact, I’m paying it forward as I sent a copy to my old residency director in the hopes that he’ll pass the knowledge on to the new medical students and residents.

  24. Just ordered the book. It will be a gift for a friend MD who could really use the information.
    A huge thanks for all your efforts – TIME, energy, and more – to maintain your web blog. I learned so much and really enjoy keeping up with your blogs.

  25. I enjoy reading your blog and appreciate all the advice you provide. I am just finishing my fellowship and will be signing my first contract very soon. Its hard to believe one of the physicians in chapter 2 of your book was able to save almost 2 million in 4 years after training. Calculating overhead, loan repayment, income taxes he/she would have to be saving around $40,000 / month to reach that goal.

    • While I obviously didn’t audit his story, and I believe he was referring to net worth, you’re right that it takes a ton of money to get to that level in such a short time period. He’s obviously a very high income doc. If you assume that $200K is home equity, you could get $1.8 M at 8% in 4 years by saving $370K a year, or around $31K a month. If you’re making $800K a year, paying 1/3 in taxes, and saving $370K a year, that still leaves you $165K to live on. That is a massive raise from residency.

      Do I expect most docs to save $30-40K a month and hit $2 Million in 4 years? Nope. But most docs can save $5K a month, get 8% out of it, and hit $2 Million in 16 years (mid 40s). That’s not too shabby.

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