What My Brain Tumor Taught Me About Life and Money

INTRODUCTION

This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.

Dr. Jim Dahle:
This is White Coat Investor podcast.

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All right, welcome back to the podcast. We have a great interview today. We've got Josh Daily with us. If you don't know who Josh is, I know many of you do because you've read his columns at White Coat Investor. You've heard of him at WCICON. You may have sat in the class he put together in Little Rock to help physicians become more financially literate, more financially disciplined.

He's pretty well known in this space. It's going to be fun to have a chat with him about what's going on in his life, which is not insignificant, as well as some of the advice he has for the rest of us. Like many in his medical situation, he's becoming a little more philosophical every year. I think that's a good thing for most of us.

Before we get there, I want to go over a couple of things. The first one is that we have the opportunity to help you make a little bit of money with your free time. We call these paid surveys. There are people who want your opinion. Your knowledge and your opinion are valuable as a doc. If you go to whitecoatinvestor.com/surveys, we can connect you with companies that will pay you for your opinion and pay you to fill out surveys.

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QUOTE OF THE DAY

Dr. Jim Dahle:
Our quote of the day is from Benjamin Graham, Warren Buffett's mentor. He said, “It is absurd to think that the general public can ever make money out of market forecasts.” I think there's a lot of truth to that. There are a lot of forecasts, especially at the beginning of the year. You know what? When you go back and look at them at the end of the year, it is not impressive. Their track record is not impressive, and yet we still pay attention to them. When they do another forecast the next year, it makes no sense whatsoever.

Let's get Josh on the line. We've got a long conversation today. I think you're going to enjoy it. I'll see you on the backside.

Our guest today on the White Coat Investor podcast is Dr. Josh Daily. Josh, welcome back to the podcast.

Dr. Josh Daily:
Thanks, Jim. It's great to be here.

Dr. Jim Dahle:
I don't know how many episodes it's been since we had you on the podcast. It's been a few. Let's introduce you a little bit to the audience. Hopefully, a lot of the audience knows who you are. They read the blog. They've read some of your guest posts, etc. Let's start at the beginning. Tell us your professional career track and maybe some of the things that have been unique in your life.

Dr. Josh Daily:
Sure. I'm a diagnostic pediatric cardiologist. I live in Little Rock, Arkansas, where I also serve as our fellowship program director. I practice clinically but do a lot in the educational domain. Like many listeners of the podcast, I grew up with the intention of going to medical school, had a physics major in college, went straight into medical school, went to a residency, fellowship, and jumped in as an attending right away with no real sidetracks along the way.

Finances weren't a big part of that up until really residency and fellowship, when I came across the blog, did a deep dive, thoroughly enjoyed that material. Then, as a newer attending, I recognized that I ended up just having basically read the blog and a few books, and knew more than the vast majority of physicians around me. I ended up giving a couple of lectures to residents and then fellows, and that grew into a medical student course that I co-direct. I write academically about the intersection between medicine, finance, and spiritual economics. That's become a bigger part of my life.

But germane to this podcast, the more significant aspects of that journey, about four and a half years ago, I was diagnosed with a craniopharyngioma, which many of the listeners may know what that was or what that is. I did not. I'm sure I learned about it at some point in medical school, but it is a non-cancerous but locally aggressive brain tumor that originates at the very center of my brain. So, it arises from my pituitary and then fills the third ventricle, which, for those that aren't medical, is the very middle of your brain in an area in which a lot of important structures sit, and it's very difficult to get to.

I was on the podcast about three and a half years ago, where I told some of my story around that first diagnosis and the events that transpired around that. I ended up undergoing a complete resection, big surgery, had some issues following that, but overall did well, and then was transitioned back into normal life. That brings us to some of what we'll be talking about today, which is unfortunately a recurrence, which I'll get into as we go forward in the podcast.

Dr. Jim Dahle:
We'll certainly get into that. What people might not realize, particularly newer listeners, is this connection with White Coat Investor and Little Rock, Arkansas.

Dr. Josh Daily:
That's right.

Dr. Jim Dahle:
I've been going to Little Rock for a long time for White Coat Investor kind of stuff. It was the birthplace, really, of perhaps the first in-school financial curriculum. I've been out there several times and have a lot of great memories of going to Little Rock and seeing what has come out of that. You're just one of the wonderful people that's come out of Little Rock helping physicians to be financially literate, financially disciplined. A lot of people may not realize that there's a little connection there with Little Rock.

Now let's talk for a minute about disability. I think insurance is maybe one of the more boring things that we talk about all the time around here, but I'm always appalled when I find out how many docs there are that don't have any sort of disability insurance. They're going to make something like $8 million to $15 million during their career, and that's probably their most valuable asset. And they haven't bothered insuring it at all, or they've just settled for whatever their employer handed them.

As someone who has dealt with a legitimate disability, something unexpected popping up in your life that you did nothing to deserve, you didn't go fall off a mountain after taking risks maybe you shouldn't have been taken, can you speak a little bit to the need for disability insurance for most docs?

Dr. Josh Daily:
Sure. I'm sure you're far more familiar with the stats than I am, but the bottom line is that very few physicians anticipate that they will ever become disabled. We envision our future selves in our lives, anticipate practicing for full careers, and the reality is that many, many doctors become disabled for some period of time, and that's reflected in the cost of disability insurance.

In many cases, it has nothing to do with something that either you brought upon yourself or that you could have protected yourself from. My case is obviously a great example of that. To the best of my knowledge, it's not related to lifestyle or choices I made.

Like many other types of insurance, unfortunately, you have to recognize the risk and make the decision long before the event arises. When I was diagnosed about four and a half years ago, I had a policy that was okay. If I were obviously shopping for it now and doing what I know now, I would have gotten the very best policy I could possibly get.

Dr. Jim Dahle:
As much of it as they'd sell you, I'm sure.

Dr. Josh Daily:
That's exactly right. It was a reasonable policy, but I hadn't done a deep dive. I had the sense that I knew I probably needed it. I thought my risk was probably smaller than it actually was. Then, when I was diagnosed, I quickly lost my ability to buy additional disability insurance.

Basically, I haven't been able to buy any disability insurance or life insurance since that inciting event four and a half years ago. I'm very grateful that I had both. I had reasonable policies. You could argue that they could certainly be improved, but I had policies in place that would, if I died, provide for my family and my wife and four young children in that event. Then, if I became disabled, we would have to make some cuts, but we can maintain a reasonable standard of living and have a good quality of life.

That being said, especially the second time around, as soon as I was diagnosed, my primary focus was on getting appropriate care, having a plan of action, and so forth. Very soon thereafter, I reached out to a disability attorney here through White Coat Investor and had them look through my plan in detail, and give me feedback. Their sense was, overall, it's a good plan. Hopefully, you won't need to use it.

My primary question is related to what are the things I need to do now to document and make it as crystal clear as possible that if this progresses and I lose the ability to work, I'm not going to get any pushback. I'm very grateful for the feedback that I got in my case because it's somewhat black and white. I've got a tumor in my brain, and my vision decompensated rapidly over a period of a few weeks. It was clearly caused by the tumor. It is a diagnostic cardiologist who does imaging in the setting of very poor vision that would be crystal clear, clear-cut.

As you know, death can be black and white; disability is many shades of gray. Luckily, I was on the darker end of the shaded gray spectrum, so it would have been clearer cut to me. I haven't had to use it, and I've been able to work throughout all of this, but I am acutely aware that that could occur, and I'm trying to take some practical steps to protect myself in the event that it could.

Dr. Jim Dahle:
It's a little bit similar to my disability. When I fell off the mountain and got hurt, I had already canceled my disability insurance. I had two good policies that would have paid. Actually, neither one of them would have paid because my disability period was only two months, and neither of them would have started paying until three months. That was the way mine were set up. Having those close brushes with serious, possible long-term disability really makes things crystal clear on why that's such important insurance for anybody that's not yet financially independent.

All right. Well, I'm sorry to hear about this recurrence issue. Give us an update. What's going on with it? What's your treatment plan?

FACING A BRAIN TUMOR RECURRENCE AND NAVIGATING THE MEDICAL SYSTEM

Dr. Josh Daily:
Sure. Last summer, it had been about three and a half years after my resection. They'd gotten all my tumor. All my MRIs had been clean. My last MRI had been December, right before then, so about five or six months before the time when all this manifested. In the words of my surgeon, at this point, the risk of recurrence, he said, is almost non-existent. We even talked about spacing out my MRIs to a greater duration.

Then, in the middle of the summer, first, I noticed that I started being thirstier than I typically was. I was potentially urinating a little more frequently. In classic fashion, I dismissed that and thought, oh, it's the middle of summer. It's hot. It's Arkansas. I've got a lot going on. I'm sure I'm probably just on the thirsty side and drinking a little bit more. Not in any way anticipating that that could in some way signal my tumor coming back.

We're coming up on a vacation. We're going to be driving like 18 hours to northern Michigan to see my sister. Around the same time, I started having a few other symptoms. I called my endocrinologist, and she said, “Let's come in, and let's just check your urine and your serum and make sure that you're not developing what's called diabetes insipidus”, which I know you're familiar with. For the readers, it basically is a scenario in which one of the hormones that helps your kidneys concentrate urine is absent. You can't concentrate urine, so you just pee a lot.

I had my labs checked, and it was within the normal limit. In retrospect, it was like right at the border, but it was technically within normal limits, so I quickly dismissed it and went off on vacation. Meanwhile, on vacation, my vision rapidly deteriorated over a period of really one to two weeks. In my mind, I'm like, I just need glasses. I'm 43. This happens.

I vividly remember, I'm driving back 18 hours to northern Michigan, and I am struggling to see the car in front of me. I start checking my peripheral field, and all of a sudden, I'm like, “Oh, my gosh, I've lost my peripheral vision”, which for doctors who are aware, you know that there's a very specific kind of vision loss with your peripheral fields on both ends, and it indicates that there's not something wrong with your eye, but there's something in the brain.

In particular, the location of my tumor had been right next to what's called the optic chiasm, which is the part of the brain that really interprets stimuli from the eyes and allows you to see. First, my wife and I switched places in the car. We finished the rest of the drive home. I, like many here, had many medical contacts, and so was able to get in and get my vision checked basically the next day, and confirmed what I was worried about, that I had this very clear visual field defect that suggested something was going on in my brain.

Even then, I did not think it was a tumor. I thought there was no way the tumor was going to come back this far after all these clean MRIs. Something else is going on in there. Yeah, I need an MRI. In typical fashion, my university was backed up. It was hard to get an MRI scheduled. What I ended up doing is calling a good friend of mine in neuroradiology, my children's hospital, where I take care of patients. He's like, “Come in tomorrow morning at 05:00 A.M. I'll scan you before anyone else gets here.”

I show up in my own hospital, get scanned. He's not even there yet. It's just the tech. I go, and I sit in the chapel while I'm waiting, which is where I had countless conversations with patients talking about the illness and potential death of their own children. I remember sitting there, and then my friend called me and told me the tumor's back. Not only is it back, but it was larger than it was initially. It was about 2.5 by 2.5 centimeters. It was compressing my optic chiasm with clear effects on the optic chiasm.

Here I am, still no doctor who actually takes care of me knows about this. This is my buddy who just did the MRI. I'm calling my neurosurgeon, getting a hold of him. Luckily, I have his cell phone number. Of course, he, in typical surgeon fashion, was very quick to say, “I got this. Let's come back. I can get this. Let's do surgery.” He's a fantastic surgeon, excellent job the first time, but I can read the literature. A redo, in this case, the outcomes are not very good. The risk of either permanent damage to my vision, complete loss of pituitary function, hypothalamic damage, and a variety of other things is really high.

Of course, I want to believe I'm an outlier, that that wouldn't happen to me. I've got a great surgeon. I'm in good health, but you've got to look at the base rates. I'm very grateful that I've done a lot of studying on the front end and was aware of some investigational options with what's called BRAF and neck inhibition, which is a kind of oral chemotherapy. Pills you take every day that basically work on a specific receptor that's typically present in my tumor.

Luckily, I'm so grateful for this. The first time around, I pushed my surgeon to send genetic testing on my tumor. It was BRAF positive, which is not standard of care to send testing. I knew that this was kind of investigational. I had done that the first time. I already had that data available to me.

I'd reached out and connected with the expert who'd actually identified this mutation in this kind of tumor at Harvard. I had already connected with her a few years prior and talked through some options. I immediately reached out to her that morning. I'm so grateful for this. She called me from Tokyo. She was in a conference. She stepped out of the conference to call me.

Time was really of the essence. A large part of my vision was deteriorated, so I had to do something quickly. It progressed rapidly over a period of a week. She told me, if you want to start this targeted therapy, these are the meds you need to get. This is the dose you need to do, which none of this is FDA approved for this indication. These tumors are very rare. She kind of teased a lot of this out for her own research. She said, you've got to find a local doctor to prescribe it for you.

Meanwhile, there wasn't a single neuro-oncologist in the entire state of Arkansas, which is crazy and rather frustrating. I take advantage of every single professional contact and courtesy that I possibly can and reach out to as many friends as I can.

I had one of my patients. His dad is the president of another institution that does a lot of oncology treatment, but nothing with the brain. He's one of the many people I reached out to. They had an oncologist there who used these exact same medications to treat melanoma. He's very familiar with the side effects and the regimen and so forth, but isn't a neuro-oncologist. He said, “I'll learn. I'll figure this out. Let's do it together.”

So grateful for him. I got in that very next day. He was able to figure out a way to get me pills immediately. From the pharmacist there, they were able to scrounge enough samples for medicine that's pretty darn expensive. I started it basically the day after I got my MRI, which is the day after I got back from vacation. I fully recognized that that is entirely a function, one of God's provision, but to the fact that I'm a doctor. The average patient does not have access to those kinds of doors being opened that rapidly.

I was able to start those medications right away. Meanwhile, we start jumping through hoops with insurance. Within a week, my vision was clearly recovering. At 10 days, I had all my visual fields formally tested again. There was a significant improvement. It was very, very clear-cut. If I hadn't had another MRI, it was clearly working.

Then I get the letter from insurance. “We're not paying for this. It's not indicated.” Too bad. I work at a university where we self-insure. I did everything I possibly could and made it very clear that I work here. I'm a doctor here. This is going to go very poorly for those universities if I become disabled and lose my vision, and they won't pay for these meds. They ended up finally agreeing to that.

I also recognize that's a function of meeting the doctor and knowing how the medical system works and being highly motivated to get them to approve these meds. I knew how to find the New England Journal paper and how to do a quick literature review and write up a great letter using ChatGPT as quickly as I could. That made a very compelling case, but I got the meds approved and was able to stay on it.

After a month, my next MRI showed that the tumor had shrunk by almost 90%, which is incredible to have that kind of shrinking. Simultaneously, there were a number of other things going on from a medical perspective. I wasn't sleeping as well. I just had low energy. In retrospect, my mood was poor. I think I was entering into a realm of depression.

My pituitary basically stopped working. I developed panhypopituitarism, which means I tipped into full diabetes insipidus, where I was urinating nonstop. I remember one night I woke up eight times that night to get out of bed. I was able to start medicine for that.

Similarly, I had adrenal insufficiency, which one of the hormones that the pituitary releases tells your body basically to release steroids that allow for normal living and functioning. I immediately started on steroids. I was already on testosterone, increased my levothyroxine. I entered this domain of basically replacing all my pituitary function, which I've had to do. Even as the tumor shrank, I haven't had any recovery of the pituitary.

In the interim, the tumor has continued to shrink. My last MRI was in December. It was by volume; it had shrunk almost 98%, which is really incredible. My next MRI is actually next week. By the time this airs, I'll probably have had my next MRI.

The long-term hope is that we stay on this and treat it entirely with this. We basically wait until it begins, in the words of my oncologist, to die. Then on serial MRIs, there's no residual change. Whatever remains is hopefully scar tissue. Then we stop with very close follow-up.

That being said, there's no long-term data, very limited midterm data, and a little bit of short-term data. There might be 12 patients in the US that have had these meds that have been on them for more than a year. We really don't know what's to come. There's a very reasonable chance it may recur. I may need radiation. I may need surgery after all. I really think this gives me my best odds of recovery without disability and without death, and having a high quality of life.

At the moment, I'm doing reasonably well. That being said, these meds come with side effects, like anyone knows. On the spectrum of chemotherapy, they're on the more mild end. I've been in and out of rhabdomyolysis. For those who aren't medical, basically, when your muscles become inflamed or break down a little bit, they release an enzyme that can damage your kidneys. It's called a CK level. My CK level has climbed. It wasn't in a place where it's hit my kidneys yet. We've held one of the chemo meds. It came down. We've restarted at half the dose. I seem to be tolerating that okay.

There's always this balancing act of you want a high enough dose that impacts the tumor, but not so high that it does permanent damage to healthy tissues in your body. Anyone who's dealt with chemotherapy knows that dance. I've had to do that as well.

That's the rundown from a medical perspective of where that brings me to now. In the midst of this, I've been able to work. I took a little bit of time off on the front end. My vision recovered fast enough. I can read echoes again. I've continued to work. My colleagues have been supportive and helpful. I have a little bit lighter clinical load than I have in years past.

I've been able to continue my job. I'm fully engaged at home, four young kids, coaching my four-year-old soccer team right now, doing a lot of the normal life things in the midst of balancing some difficulties. I don't mean to minimize that, but there's an aspect in which many parts of my life are still really good.

Dr. Jim Dahle:
So many things to touch on. I wanted to allow you to tell that story to the podcast audience so that the rest of what we talk about today is really in context of knowing what you've been dealing with. If nothing else, we ought to talk just for a minute about the miracles that modern medicine is doing. This is incredible. You're one of a dozen people that has had this treatment. It's been very successful. Your life's been extended. You're living longer. You're still very functional, able to work, coaching a team, raising kids, writing guest posts and columns for White Coat Investor, and being on this podcast.

What people are doing out there in medicine is incredible. You ought to give yourselves a big pat on the back for developing these therapies and using these therapies to really improve people's lives. You're a great example of someone whose life has been dramatically improved.

The Bible story is of Jesus healing somebody by putting some mud on his eyes. He's asked by the Pharisees later, “Who did this to you? It couldn't have been Jesus.” He says, “Look, here's all I know. I was blind before, and now I see.” Really, you were blind before, and now you see. It's pretty incredible. Sometimes we forget just how important what we're doing out there in our medical centers, in our clinics, et cetera, is in the lives that we're affecting. Any of you out there feeling a little burned out, don't forget what you're doing is really, really important.

Dr. Josh Daily:
I have two reflections related to that. One, our medical system is broken in many respects. We provide technological advancement and incredible care like this, but the actual system navigates really hard. I had the blessing of being a doctor, and I was able to cut through all that. It was eye-opening to recognize what my patients have to deal with every day to cut through that.

But then secondly and more powerfully, I had been so deeply reminded of the incredible impact of a doctor who deeply cares and is highly competent. In the midst of what I do on a day-to-day basis, things can feel rote. It doesn't feel like I'm making a big difference. There are exceptions to that. I often forget how important what we do as physicians is.

Having a doctor who's one that really deeply cares about me to go out of their way and step out of a conference to take a phone call in Tokyo, another one that's willing to read for three hours a night before seeing me to learn everything about this specific tumor and do all this extra work to see me whenever I need to be seen, I'm so grateful for that. Priscilla Brastianos at Harvard and Sam McCool here in Little Rock are the two doctors I'm so grateful for.

Not only that, sometimes I think in this day and age we emphasize just caring and intention. There's something to be said for skill, being really, really good at what you do, not just base-level confidence, not just good enough, but being great. If Dr. Brastianos hadn't said, “I want to figure this thing out” 10 years ago, I don't know where I'd be today. If they didn't push the envelope and weren't really good at what they did, I really don't know what would be happening. It has just been deeply encouraging to me about the opportunity for impact in the lives of our patients and in the case for skill, for mastery, for just becoming great at our training and how much of a difference that makes in the lives of our patients.

REDEFINING SUCCESS, MEANING, AND THE GOOD LIFE

Dr. Jim Dahle:
All right, let's transition a little bit to talking about life, philosophy, and what a good life is. As I sit here and I complain about my little tiny health problems, which are nothing compared to what you're dealing with, and I think, “Well, what's my life expectancy?” Probably 35 years or so. You don't know what your life expectancy is.

What thoughts have you had as you've dealt with this over the last four and a half years on what the good life is, how to make a good life, maybe not knowing how long that life is going to go and what abilities you're going to have during that life? How has that affected your philosophy on the good life, for lack of a better term?

Dr. Josh Daily:
Yeah, that's something I deeply wrestled with. There wasn't one moment in time where the clouds parted, the sun shone down, and I felt like I had some revelation about how all this works. It's been iterative, and there have been stages. I continue to wrestle with that.

I've wrestled a lot with my own mortality. One, even if this goes well, I'm probably at least halfway through my life. Even if I'm recovered from this, there's just a reality that at 43, I'm probably over halfway there and we will all die. I've wrestled with some of that. That's been at the forefront of my mind in a way that is different from any others.

Then there's been the aspect in which the risk of my dying from this is relatively low. The risk of disability and dealing with really complex medical issues, and dealing with medical fragility the rest of my life is really high. That's actually been the harder thing for me lately. I did not picture being in my mid-40s dealing with medical fragility. I just didn't think I was going to be there.

I went out to Colorado this fall for a conference and brought my 11-year-old with me. We ended up staying a day late and went for a hike. In my mind, I'm like, I got this. I'm fine. I'm in good shape. I felt terrible. I hiked a few miles, was constantly winded, was hurting, and it dawned on me, I'm probably never going to overcome. That's probably unwise for me to do it anymore. There was some real loss in that, not in just that actual event, but what that represented. There's some strength and capability that I've lost. And it's probably permanent. I'm probably never going to get that back.

Now there's good life on the back end of that. There's so much to be grateful for, but there's real loss in the middle of that. And sometimes even when we deal with a difficult situation and loss, that's very uncomfortable for us, whether we're the one dealing with it or interacting with someone in that situation. And the tendency is to basically shine a light on it and put silver edges and to say, “Well, at least you're still alive. At least you can still work. At least you can still be involved with your kids.”

And there is a room for hope and gratitude, and that's deeply interwoven in my life. But there's also room for loss and grief and lament. And so, I've even tried to enter into some of that recently. And not that I become hopeless or that I allow it to take over me, but I do allow it to watch over me some.

And so, I've even dealt with just being okay crying and acknowledging what I've lost and what that may mean for the future. Couple it with practices of gratitude and connection with those around me. But I've dealt with that a lot as of late. And I've done some reflection about my life that a lot of people naturally do in their 40s, and then it has probably been accelerated for me and then morphed in a little bit different ways as I've dealt with all this in the midst of this.

What I want to focus on next season of my life. What are the things that are most important? What are the things that I may have emphasized a lot that are of very little importance?

If you talk to the version of myself from 10 or 15 years ago, I would have anticipated that my life would look very differently now than it does. And in particular, well, I probably would have envisioned moving up the ladder with academia, pursuing leadership positions, having impressive titles, having a lot of people knowing my name, that kind of stuff.

And that has just faded in the background for me. Not because I'm deeply mature, but just the reality of life that those things aren't that important to me. And so I've done some transitioning there on that end.

I've also discovered some things that I find deeply meaningful that I really enjoy. And that's in the domain of communication, both verbally and through written words. And it's not just like, I like giving a lecture about ventricular septal defects and cardiology. I enjoy that, but it's not as deeply meaningful as some other things. If a medical student learns about that, maybe they'll remember it. They'll forget most of it. It probably won't impact the care they provide to the patient.

But when I get to teach in an area that really matters in their lives, in this domain of suffering, human flourishing, meaning, and significance, and I can connect with them in that area. And often money is a doorway into that, which is one of the reasons I'm so drawn toward engaging in the financial area. You get at values and principles and priorities and those kinds of things.

I come alive in that space. It feels deeply meaningful and significant. And then I also think I have aptitudes and gifting to align with that, such that I experienced some of the state of what's called flow, where you're engaged in a task and your knowledge and skill are equally matched to the task at hand. And you're so caught up in it, you lose track of time. I get that more in those kinds of spaces than anywhere else.

I'm even restructuring some of my life and pursuing some of those things right now. And then, as I've reflected on life on a couple of different levels, one from a relationship perspective, when you look at the literature and the research surrounding human flourishing as a whole, it is very, very clear. The primary determinant of human flourishing is high-quality relationships.

And I find it very interesting that as doctors, we know a lot about what the evidence says about our specialty, the care we provide for our patients, and we'll practice evidence-based medicine. But when it comes to living our lives, most of us don't really know the evidence first. We don't know the research, we can't cite the studies, and we're more influenced by our friends, by culture, by movies, by all these other things that ultimately influence what we prioritize.

I've been very aware of that. I've done a little bit of a deep dive, even in some of those specific areas, and even restructured some of our finance class around, not just what's a Roth IRA, although we do that, but some of these other parts, what makes a job great? What really matters in the context of vocation? Those kinds of things. How can you prioritize deep connections with others in the midst of being a fantastic doctor? And how are those balanced?

I've done some restructuring in my own life along those lines, and now I both write and teach in those spaces as well. I'm also a lot more than willing to take risks, especially risks without a lot of downside.

For instance, even with White Coat Investor, I'd written a couple of guest posts, and I enjoyed that. And I thought, “I like doing this, maybe they'll let me be a columnist and write more.” So I reached out to Josh, and he said, sure. And in about three months, I wrote 25 posts, enough for like three years. I had to slow down a little bit. I've enjoyed that so much. You have to ask Josh. He has a huge list of posts from me. They're going to last a while.

Dr. Jim Dahle:
He mentioned that to me. He was like, “Sweet, he can take over from me. This is great.”

Dr. Josh Daily:
And that has been so deeply fulfilling. Boy, I've enjoyed that. That has been life-giving. And even if 10 people read it, even wrestling with those issues for the written word helps me sort it out in my own mind in a more meaningful way. I've thoroughly enjoyed that.

And then this has been more recent. One of my areas of focus in medicine, especially on the academic side, is how physicians make decisions, especially in high-stakes arenas in areas of uncertainty. I do a lot of teaching and writing in that area of cognitive bias and motivated reasoning and groupthink, and how all those intersect.

And as I've developed expertise in that, one, I've recognized these same mistakes that we see really intelligent, highly trained doctors make. They certainly provide money. And so if you look at many of my posts, most of them relate to that in some way. That's kind of a theme woven through it.

And then I've also recognized that my faith is very important to me. I'm a Christian, and that's a big part of my life. That same lens that I've applied to the people of my faith, I see those same mistakes, but they manifest in very distinct ways with spiritual language and the same underlying motivated reasoning.

And then there's some confusion about beliefs and God and so forth that can be really destructive. So, just in the last six months, I became really interested in that. I write a lot on that now as well. And I decided to write a book. I've never written a book before, but I wrote a book in the last few minutes on that subject, about the interplay of the science of high-quality decision-making and scripture and God's will and theology, bringing all that together in hopefully a helpful framework to help people of faith make better decisions. I've loved that. I never thought I'd want to do that.

Dr. Jim Dahle:
What's the title of the book? Do you have a title?

Dr. Josh Daily:
I have multiple working titles, and it depends on what the publisher ends up deciding on. The initial title is Choosing Well: How Christians Can Make Better Decisions in a Fallen World. The more provocative title is The Peace Trap.

One of the things I talk about a lot is how, at least in Christianity, we use this language of saying God's peace, and we treat it like a compass. And if there's some open door and then we don't feel good about it, we say, God just hasn't given me peace about it. And it's like this, it puts up this armor around it where you can't argue with that because it's God's peace. He hasn't given it to me. So why would I possibly pursue that?

Or we baptize our own desire in spiritual language. Maybe there's something we want to do, but we feel very uncomfortable just saying, “I just want to do that.” So we say things like, “God calling me, God's leading me, God's giving me peace about this.”

And basically, what it means is that no one can actually give you healthy feedback. No one can actually penetrate this spiritual armor that you put around you. And so you end up making dumb decisions. And there's a lot of confusion around that.

A lot of the book focuses on that. So the topic, the title may be a little bit more along those lines, but we're still wrestling with that. And even within that, I'm a first-time author. It may not get published by a big publisher. I have an agent for sending it to all the big publishers now. We'll see.

But one of the things I talk about in it is base rate neglect. And that would be dumb for me to ignore that. And the odds of a first-time author getting published are between 1 and 5%. And so I probably am subject to that as well. I'd like to think I've done some to modify those odds in an upward direction, but there's a chance that that may not get published.

But either way, I have loved that. And I never would have tackled those kinds of things that I've not been dealing with all the medical issues. So while there's real loss and real suffering and pain in the full spectrum of negative emotions, there's some real blessings that have come out of this. First and foremost, through my own perspective on life and relationships and God, and then through some of these other things I'm pursuing that I never would have pursued before. I'm so grateful for this. If I were to go back, I'd still rather not have the brain tumor and learn these things another way. But I am very grateful for them on the back.

Dr. Jim Dahle:
I can totally relate to this sense of simultaneously feeling incredibly grateful while at the same time mourning the loss of some ability you used to have, and realizing life is now different. There's a before, and there's an after, and they're two different lives. And I can relate to that in large part after my little fall a year and a half ago. I totally understand that.

WHAT ACTUALLY LEADS TO HAPPINESS AND HUMAN FLOURISHING

A lot of your work that you've submitted to the White Coat Investor is on things like happiness. One of your posts that I think we published last December was, “Does money buy happiness?” What the research really says. What should people know about how money can buy happiness and how it can't buy happiness?

Dr. Josh Daily:
Well, it's interesting. People often have beliefs and attitudes surrounding this that they may not be fully aware of. If we are standing in a conference, not the White Coat Investor Conference, any other conference, and ask people, “Do you think money buys happiness?” No one would raise their hand. They'd be embarrassed to think that or say that. Yet they simultaneously act like it really does.

They pursue money and spend money willy-nilly and all sorts of things like it's going to make them happy. It's like there's this unspoken belief that if I just have more, I have more things, more experiences, and more money that can buy those, I will be happier. Yet we're embarrassed to admit that we believe that. So we pretend like it doesn't matter, but we act like it actually does.

The reality is that in the domain of human flourishing, money is not one of the primary drivers of flourishing. There are other things that matter far more, things like high-quality relationships, things like having autonomy and control over your life, meaning and significance in the work that you do, growth and mastery, this idea of competence in the domain that you're working in, and this time affluence, work-life balance. Those are the primary drivers. Those matter far more.

But money does matter. It does impact happiness. And the research is pretty darn clear on this. And there was previously research that suggested there was a threshold effect by the Nobel laureate, Dane O'Connor, that suggested, at least in 2010 dollars, once you make above around $70,000 or so, extra income doesn't buy more happiness. Below that, it really does. And there's been additional research in the last few years that have somewhat debunked that. If you're interested in the actual methodology of how that's been figured out, feel free to look at my article on the Whitefield Industry. But the bottom line is, at every income level, happiness continues to increase.

Dr. Jim Dahle:
Although the slope changes. The slope is pretty steep below $70,000 or $100,000, and not quite as steep once you get into the six figures, seven figures, et cetera, as I understand it.

Dr. Josh Daily:
Well, this is fascinating. It's more nuanced than that. Kahneman did this initial study back in 2010. And then Killingsworth came out with this other study in 2021 or so. It seemed to suggest the slope just continued. At all income levels, at a similar slope, it sounded contradictory. And I'm so grateful for them.

The two of them got together and said, “Let's combine our data. Let's figure this out.” They published a third study a couple of years ago where they combined their data and analyzed.

And one of the things they found is that not everyone is the same. There's this subset of people who are the bottom 25% of happiness, kind of the curmudgeons. And there's a pure threshold effect there. It helps up to 60s and then nothing beyond that. If you're an unhappy person in general, a lot of extra money is not going to make you happy.

So you lump everyone together, and it shows one pattern, but when you divide it and break it down by groups, it shows different patterns. The highest unhappiness group, as your income exceeded that threshold, the slope actually increased. It actually went higher.

Dr. Jim Dahle:
Interesting.

Dr. Josh Daily:
Which is really interesting to me.

Dr. Jim Dahle:
That their baseline is they're relatively happy people all the time. They're the ones who more money actually makes them happiest, huh?

Dr. Josh Daily:
Yes. And some of that is some of us are pre-programmed to be happier, but a lot of it has to do with high-quality relationships with others. But then, probably the most powerful finding, in this Killingsworth study, 75% of the relationship between happiness and income was explained by how respondents answered a single question. And that's “To what extent do you feel in control of your life?”

Dr. Jim Dahle:
Control. It's all about control. It's about autonomy. I think this is why the fact that far more physicians are employees now than there used to be is contributing to so much burnout. I think it's a major factor. The fact that docs don't own their jobs, not necessarily because they make less money, but because they have less control over their work. And I think it really does contribute a lot to people being unhappy, being burned out, et cetera.

Dr. Josh Daily:
Yeah, very much so. And the autonomy certainly is autonomy in the workplace. You have control over how  your patient flow is when you work; when you don't have that structure, which as an owner you do, as an employee, you may not. Although some employees do, especially if you leverage negotiation, you also have control over your life. This idea that if I'm working 60 hours a week, I've increased my consumption lifestyle to completely match what I make. I'm barely getting by month to month. I'm flying home to get the kids in bed. I have no margin whatsoever. I have no control that are arresting me for burnout. And you're not going to be happy.

Dr. Jim Dahle:
So inasmuch as you can take that high income and leverage it for margin in your life, for more control of your life, both at work and outside of work, that will make you happy. That's kind of the bottom take-home message of all of those studies and happiness and money and the inner fight, which is really fascinating.

Now I have often preached to people that you're going to get more happiness by spending your money on shared experiences with people you care about rather than buying stuff. And I get a fair amount of pushback. People are like, “Well, I just bought this really sweet car or this nice truck or this boat, and the boat allows me to go have fun experiences. No, I'm getting a surprising amount of happiness out of some of the stuff I'm buying.” What do you think about that? What's your take on that?

Dr. Josh Daily:
Well, I think what you're seeing there is motivated reasoning. People spend their money in the way they want to spend it. They want to justify their spending to feel good about it. So if you provide disconfirming evidence or an opinion that suggests that they're spending their money in dumb ways, it's not going to make them happy.

We have a lot of cognitive dissonance, which is deeply uncomfortable. We want to discharge that dissonance, and we want to explain away the data in a way that allows us to preserve a positive view of ourselves and our decisions. And that's this underlying force that impacts how we interpret data constantly and how we interact with things.

I think the research is pretty clear, and I completely agree with you. Experiences tend to provide more happiness than things. Now, there's a nuance to that that a lot of people don't understand. So let's say you're working 60, 70 hours a week, and you think, I just want to get away and sit on the beach and do nothing, and that's going to make me happy. If you do that, there's a reprieve at first. You get some more sleep. It's no good to sit there. But if you go by yourself and you just don't do anything, you don't actually feel recharged at the end.

You mentioned this, but a lot of people miss it. It's shared experiences that promote deeper connections. And it's that relational connection and shared experience that I think is really the key to flourishing in the midst of the experience, not just the experience itself.

Dr. Jim Dahle:
There are a couple of concepts I've encouraged people to explore when trying to figure out how to have a happy life, and that's to balance your eudaimonia with your hedonia. Eudaimonia, think of as a purpose in life, to have some meaning in your life. And hedonia, of course, is fun. You've heard of the hedonic treadmill. That's where that comes from. And you've got to get those balances right.

Last Thursday, I had a shift in the ER. I left early Friday morning to go to New Orleans to speak to a group of rheumatologists. Got back Saturday evening. And by Monday morning, I was like, “I don't want to work anymore. I don't need the money. Why am I even working? I should retire.” The whole flight home from New Orleans, I'm like, “What am I doing? I should just retire.”

The fact was, I just let the pendulum swing a little too much toward eudaimonia and not enough hedonia. I basically took yesterday, which was Monday, off. I went skiing for three and a half hours. I couldn't find anybody to go with me, so I went by myself. I skied 10 runs. I just got my snowboard repaired, so I put my snowboard on and did three more runs. I came home. I played video games for a couple of hours. I literally did nothing that day except have fun. I took my daughter to her hockey practice that evening. I actually wrote two blog posts during her hockey practice because by then I'd kind of recharged. The pendulum had swung back.

I think it's important to keep both those concepts in mind. Sometimes we need more purpose in our lives. And sometimes we need just a little more fun, some time off. And that's okay. It's not bad to take a break sometimes and go have a good time. The data is pretty clear that if you have that good time, not the way I did yesterday morning skiing by myself, but with people you actually care about, it's even better and generates even more happiness.

Dr. Josh Daily:
Yeah, I think there is some research around this idea of silence and solitude and time by yourself. And that being said, if that's all you do; that's not good for you. But that being a part of the rhythm of our life, like a deep connection with others and shared experience with moments of slowness and silence and solitude, especially in nature, the combination of all those, I know can be very life-saving.

Dr. Jim Dahle:
Now there's some data out there. I'm changing the subject a little bit here. There's some data out there suggesting, in fact, quite a bit of data suggesting that givers, people who give away not just money, mostly money, but also time and effort and energy, are not only wealthier, but they're happier and they're healthier. Does that surprise you to hear about studies showing that effect?

Dr. Josh Daily:
Not in the least. And I think anytime there's correlation, you have to be a little bit careful about assuming causality, although what I naturally want to say is that that aligns with the teachings of Christianity, for instance, which I hold to. So, of course, I'm going to want to endorse that.

But I do think some of that may be that happier people who are deeply connected with others are naturally more generous. It's not purely that acts of generosity foster other things, although I clearly think that works in both directions. And the research is very clear. Those things all cluster together, and whether the causal link is from A to B or B to A or some combination, all those, in a day, pursue them all. You're going to have a much better life. Deep connections with others, a life marked by regular generosity, pursuing meaning and significance, all three of those make a really good life.

And that's, I think, really clear-cut, both from a psychological perspective, and if you look at the research, and from the perspective of major world religions. That is a theme that's true in most people who are spiritual individuals, of some component of generosity. And what's interesting about that is that it also highlights this idea that emotion, and what we feel like we're drawn toward, can sometimes be a very helpful signal, but sometimes lead us astray.

Generosity, off on the front end, feels like loss or giving something away, and then you end up gaining so much more on the back end. And if you operate entirely based on emotion, which is called the affect heuristic, where emotion is a reliable indicator, “Do I pursue or withdraw?” It's really good for very, it's very nearsighted. Emotion is very good at indicating what's going to actually make you feel better or worse in the next hour or two. It's terrible at 5, 10, 20 years down the road.

I might feel really hungry. It's like, I want to go have a cupcake after this. That's going to feel really good in the short term, but in the long term will not. And generosity is one of those, where in the moment to give up my hard-earned money, and to give it to somebody else, there's some pain in that. But there's so much life on the back end of that, and joy, and happiness. And some of that's an act of faith, of trusting that that will come on the back end. Not in that it's promised if you get a dollar away, you get $2 back. But that this is, you want to be the kind of person that's a generous person, and that will reap the benefits on the back end.

Dr. Jim Dahle:
All right, let's get into a little bit more nuts and bolts. We're going to move into kind of a rapid-fire round. We don't have a lot of time left, but I want to touch on some of the pieces you've submitted recently to the White Coat Investor, or at least those we've published. I guess we've got a whole stack of them that you've submitted that we haven't published yet. And I just want you to give the 22nd floor elevator message of what this post is about. One of them is, you wrote, “Is a Residency Retirement Match Really That Valuable?” What was your point in that post?

Dr. Josh Daily:
The bottom line is that residents should not prioritize that in picking a residency. It's a nice benefit if it's there. And if two programs are otherwise equivalent, sure, weigh it in the balance. But at the end of the day, you want to go somewhere you get great training. That'll matter far more to your lifetime earnings than if you get a little bit of matching.

Dr. Jim Dahle:
Yeah, totally agree. The big factors are the people you're going to be with, the quality of your training, the locations, probably a big factor for most people, and your residency retirement match or what your salary is when you get there. I'm not even sure they're in the top 10 things you ought to be considering when making your residency rank list.

Another one was “Why buy the cheapest home in a nice neighborhood could be horrible advice.” This has been going around for a long time. I think the idea is that if you buy a cheap home in a nice neighborhood, it'll appreciate more quickly than anything you could have bought for the same amount of money. Why is that? Or why can that be horrible advice?

Dr. Josh Daily:
That's because of what I like to call the housing ripple effect. And that's the way in which the home that you choose to purchase has ripple effects throughout the entirety of your life. So if you live in a neighborhood, you tend to be friends with those people you live around, your kids tend to be friends with those kids, you drive your 10-year-old Honda Accord parking your driveway, and you notice your neighbor has a Lexus, the other one has a Tesla, the other one has some $100,000 pickup truck. And the next thing you know, you feel far more dissatisfied with what you have.

All of your neighbors send their kids to the elite private school. You can't be the one doctor who sends your kids to a public school; that's not a good education. Suddenly, your camping trip over spring break pales in comparison to the trip to Europe that the neighbors across the street are making, and so forth.

And you become less content with what you have, you naturally compare yourself to those around you, and whether you intended or not, your lifestyle tends to increase. And then there's the impact on your kids. And I deal with this all the time. Now your kids are friends with all these other upper-class families that have all these other special things.

I still vividly remember my son coming home and informing me he had to have the $200 plus pair of basketball shoes, which I can't remember if they were Jordans or whatever they were, he's gotten really into all this sneaker stuff to play at a high level basketball because all the players on the team have them.

But there are all these expectations that impact your family and you. And even if you end up with your home appreciating a little bit more, it is not enough to account for all of those behavioral effects of living in an expensive neighborhood and having friends that spend a lot of money.

Dr. Jim Dahle:
But people want to be in the safest possible neighborhood. They care about their children. They want them in the best possible school district. This is what people say; people justify buying cars this way. They're like, “Oh, I don't want to drive a 2023. It doesn't have three more safety features that they have put on cars since 2023. I care about my kids. Why don't you care about your kids?” You can use these sorts of arguments to justify all kinds of things.

All right. Another post you wrote was “Flourishing at work. What physicians get wrong about career happiness?” What do they get wrong?

Dr. Josh Daily:
We talked about this a little bit earlier in the post, but we tend to highlight prestige and compensation and working our way up the ladder. And those things don't really matter very much from a flourishing perspective. We already reviewed some of this literature, but the primary drivers are high-quality relationships, autonomy in your life, growth and mastery, the meaning and significance, and then, really, time affluence for most physicians matters way more than it does actual financial affluence.

Dr. Jim Dahle:
Yeah. And yet we shop by the finances. That's how we choose way too much to compare.

Dr. Josh Daily:
We are drawn towards highlighting metrics that are easy to compare. So, job A is offering me $300,000. Job B is offering $400,000. Well, job B is clearly better. It's harder to measure some of the other things, but just because something's hard to measure doesn't mean it's not really important.

Dr. Jim Dahle:
Yeah. Good point. Okay. This is another topic you've spoken about before, you've written about before. And that is the idea that we don't really know our future self as well as we think we do. Your post was titled “Your future self is a stranger. Here's how to change that.” Why do we all think we know what's going to make us happy 10 years from now? And then we are surprised when it turns out that's not what makes us happy.

Dr. Josh Daily:
This combination is two biases. One, the present bias, but we tend to focus on the present, and the distant future is not very vivid. It's hard to imagine. And then we presume that the things that our present self cares about, our priorities, our values, will persist in the future. It's hard for us to envision that the things we care deeply about now, we may not care about.

And then that's combined with something called an affective forecasting error. And that relates to our difficulty with anticipating how future events will actually impact our emotional state. We're good at valence. I recognize that if my target's total, I'm going to be less happy. We don't think it's going to make us happy, but we're terrible with magnitude, how unhappy or happy that will make us, and with duration. And we significantly overestimate both in both directions.

We think I'm going to be in a penny and make all this extra money. I'm going to be super happy, but I'm going to get this new house. Or in my case, I have a brain tumor. I have panhycopic. My life is over and terrible. And hedonic adaptation works in both directions. In both, you tend to return to your baseline.

We really struggle to anticipate how future events will impact our emotional state. And then we make decisions, assuming that things are going to have a much bigger impact than they actually do. And often undervalue or underprioritize the variables that actually tend to matter.

One of the biggest things, though, one of the things outlined in that article is our future selves, we can't picture them. They are this vague sense. Oh yeah, one day I'm going to be old. We can't look at a picture of them. We can't have a conversation with them.

And so one of the interesting research studies that was done is you take a picture of yourself and you age progress it, and you look at it. And then you decide how much to save for retirement. You save more money if you look at an age-progressed picture of yourself than if you do not.

There's even some really cool say, this is some ways that large language models are being used, where you can have a conversation with an age-progressed video of yourself. And that was even more profound, these studies are just coming out now about how you can actually look at them and talk to them, hear them talk about what's important to them.

One of the easy things anyone could do today is write a letter as if you're 75, writing to yourself today, thanking yourself for the things you did to take care of them. And then read that. There are these various practices we can do to make it more vivid, make it more real, and to help us prioritize the things that will actually be important in their future state. But we are so hardwired to focus on the here and the now and to prioritize that. And we struggle so much to actually accurately predict the future and prioritize what's likely to happen.

Dr. Jim Dahle:
So, are we better off trying to divine what we're going to be like in 10 or 20 years and what's going to make us happy? Or are we better off just trying to maximize flexibility so that we can change our lives to whatever it is that's making us happy at that time?

Dr. Josh Daily:
Well, I think one big part is flexibility that gives you more autonomy and allows you to pivot and adjust. I've had to pivot and adjust a lot in my life. Another part of it is that you don't have to make predictions just off what you feel and think. There's research out there. And this is an area in which, at least my faith greatly influences my assessment about what actually leads to life and flourishing in the future.

So, I read and study the Bible every day. I memorize and meditate on scripture, and I try to fix my mind on the things that matter most from that perspective. We're not left to just guess. There's really good data from a research perspective on what drives human flourishing. And then from a faith perspective, from whatever faith tradition you come from, all of them deal with what really leads to life on the back end. And so, I think I would, one, prioritize flexibility dimension, but also pursue the things that have been shown to matter, even if they don't feel like they do.

Dr. Jim Dahle:
Last rapid-fire question for you here. And that is, you've got whatever 20,000 or 25,000 or 30,000 people listening to this, White Coat Investors out there. What's your pet peeve right now? What's the one thing out there that way too many White Coat Investors are getting wrong, and you want to tell them to quit doing this thing or quit thinking this way? What's your number one piece of advice that you can give to White Coat Investors in general?

Dr. Josh Daily:
Well, I have a long list of pet peeves. I won't go through all of those. And many of them are things that I care a lot about that probably the grand scheme didn't come out of that much. I'm going to choose to pick something that I think actually matters more.

And I alluded to this earlier, but that's the fact that most doctors don't really know what leads to human flourishing. We haven't really read a good book that summarizes that. Little has yet been read of the primary research. And we devote so much of our lives to getting experts in our field of clinical practice. And we know the latest literature in those areas, but we are completely unaware of the things what the research says about the things that matter most.

I wish every doctor would read one book on happiness or human flourishing that's research-based and have some basic understanding of what the research really shows about what matters in life and what's going to lead your flourish in the future.

Dr. Jim Dahle:
Very good. And if you had to name a book or two, they ought to choose from, what should they be considering?

Dr. Josh Daily:
The Good Life, which was published a few years ago. That’s an excellent one. And it was written by the PIs of the Harvard study, which is the longest longitudinal study of looking at human flourishing. I won't go into it. We can do a whole podcast. It's fast. But they summarize a lot of the research. I think that would be a great starting point.

Dr. Jim Dahle:
All right. We've been chatting with Dr. Josh Daily, a WCI columnist, a physician and financial educator. Josh, thanks for all that you're doing in your life. Thanks for contributing to the podcast today. We appreciate your time and your expertise.

Dr. Josh Daily:
Thanks, Jim. It's been really great being here. I'm very appreciative.

Dr. Jim Dahle:
All right. I hope you enjoyed that conversation as much as I did. Josh is great. I could talk to him all day. I'm looking forward actually, to seeing him here in a couple of weeks at WCICON. I think by the time this runs, this is actually not going to drop until like a month or more after that. We're a little bit recording in advance, which we often do, when we come up to WCICON, just because we know it's going to be a busy period for us.

But I hope his insights are helpful to you. As somebody who's been to the edge of serious medical problems and back, I think there's some value in listening to what he has to say about what's important in life.

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INTRODUCTION

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

Dr. Jim Dahle:
This is Milestones to Millionaire podcast number 274.

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All right, we have a fantastic interview today. I love having unique Milestones to Millionaire episodes. And this one's definitely unique.

INTERVIEW

Dr. Jim Dahle:
My guest today on the Milestones to Millionaire podcast is Chelsea. Chelsea, welcome to the podcast.

Chelsea:
Thank you. I'm happy to be here.

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

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

Dr. Jim Dahle:
Okay, and tell us what milestone we're celebrating today.

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

Dr. Jim Dahle:
Okay, eight children. That's like more of a milestone to me than paying off a mortgage. Tell us about your family. When did you start your family?

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

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

Chelsea:
Yeah, that was our original plan was wait until I was done with training to start our family. But my husband, who is an attorney by training, didn't have a job pan out after law school. And so we decided to get pregnant. And two weeks later, he had a job offer. That was complicating for us. We just had to prioritize as a couple. We decided early on that we wanted to raise our own kids and not rely on full time child care. That meant my husband stayed home while I was in residency. And we have both worked part time since I got out of residency and just set up our lives in a way that one of us is always here with the kids.

Financially, we've always bought old cars and used kids clothes. And our vacations are usually driving somewhere and staying in a hotel for a night or two. And we eat a lot of beans and noodles and cheap foods. We don't really go out much, but it's worked out. We're really happy.

Dr. Jim Dahle:
Yeah, I assume when you say cheap cars, we're talking some sort of a van here to have eight kids in it.

Chelsea:
Yes, a twelve passenger van.

Dr. Jim Dahle:
The Suburban does not fit a family of 10. Yeah. Okay.

Chelsea:
Correct.

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

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

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

Chelsea:
It was. Yeah, we were both in student loan repayment plans. I was doing public service loan forgiveness, and my husband is on IBR. And so we had our little student loan payments every month. And we decided we were just going to… We never had a car payment or credit card debt. We just decided we did not want to be in debt. And so we were going to work hard to pay our mortgage off.

But the biggest factor was deciding a year ago to move from where we were living. Which was turning into a higher and higher cost of living area to the Midwest. We did some geographic arbitrage, as you call it. And did the math of how much we could sell our home for and how much we could buy land and a home for out here. And it just made financial sense. And we sold our home for more than twice as much as we bought it for seven years later. And then moved here and were able to pay cash for a home and 50 acres and no more mortgage.

Dr. Jim Dahle:
Yeah, that is some pretty serious geographic arbitrage. At least one benefit of having a big family is your IDR payments are very low. Because they're based on…

Chelsea:
It's true, it helps a lot, yeah.

Dr. Jim Dahle:
Yeah, they're based on your income. They're based on your family size. So low income, big family. The payments get very small. So have you already received your public service loan forgiveness?

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

Dr. Jim Dahle:
Oh my goodness. So you've been on the cusp of PSLF for a year and a half. How about your husband?

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

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

Chelsea:
Oh, that was the $430,000 mortgage.

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

Chelsea:
Exactly, yeah. We were able to sell our old place for $1.3 million and then paid cash for a $650,000-ish dollar home here. And then had a bunch of leftover that we just tucked away.

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

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

Dr. Jim Dahle:
Well, it can be interesting at times. The wind can be a little high. Every now and then. Okay, very cool. So tell us about what else you're working on financially. You're got a plan for the student loans. The mortgage is taken care of already. What do you guys invest in?

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

Dr. Jim Dahle:
He's been doing that for a while, or is that a new thing?

Chelsea:
About a year, a year and a half.

Dr. Jim Dahle:
Okay. And he's also being a stay-at-home dad, I'm assuming, taking care of these kids. You guys are both working part-time and splitting the childcare duties, or how's that working out?

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

Dr. Jim Dahle:
Okay. And what does that add up to for a household income?

Chelsea:
We are about $280,000 a year as an AGI.

Dr. Jim Dahle:
Okay. And how does that compare to what you were making when you were in the higher cost of living area?

Chelsea:
It's pretty similar, actually. We've always made between $240,000 and $280,000 ever since I finished residency.

Dr. Jim Dahle:
Okay. And what do you end up putting away every year versus having to spend to maintain your family? What percentage of it's going toward investments, et cetera?

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

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

Chelsea:
I would say, especially for people who are considering a family or when to start, my advice would be, if that's important to you, go ahead and go for it. And your priorities will kind of sort themselves out. Things will fall into place.

I think open communication with your spouse or partner is super important. My husband basically had to give up his dream of becoming a judge or climbing up high in the legal profession so he could stay home while I was in residency.

I've had to make job decisions to work part-time and not seek leadership opportunities because I want to be home with my kids and really find that work-life balance that both of us are happy with and just checking in with each other often to say, “Is this working for you? Should I be picking up more shifts? Should I be taking less shifts?” I think that open communication is important. And then being open to perhaps moving somewhere where it's not so expensive to live. It was a life-changing decision for us. And I'm really happy with our choice.

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

Chelsea:
I don't know. I've set myself up where I have flexibility. I'm a family medicine hospitalist. I have the option to moonlight in urgent cares, emergency rooms, hospice care. I've worked in all of those settings since graduating residency and I plan to keep all my options open. And we'll see what I feel like is important to me 10 years from now.

Dr. Jim Dahle:
Now, every now and then you see a study out there that says a kid costs a bazillion dollars. They throw some huge figure out there, $300,000 or $400,000 or something like that. Do you think they're right? Do you think kids have to cost that much? You're raising eight of them. You should have a pretty good idea of what it actually costs to raise a kid. Do you expect that each of your kids are going to cost that much? In sum total, that would be something like $2 million to $3 million is what they would cost if these studies are right.

Chelsea:
Well, my husband grew up on a dairy farm, the eighth of 10 kids. And they tell you what, they did not have $2 million per kid or whatever. And they're all happy and healthy and good people. And I don't know, I reject that concept. I think the most important thing for a kid is probably having time with both parents and having a stable intact home to the extent that that's possible.

And some of it is choosing what you are and are not going to fund for your kids. We haven't done private schools. We haven't done extensive vacation. We don't buy name brand stuff. We don't plan on paying for all of college. We're hoping to make a contribution towards college. But I think you can choose how expensive you want it to be to raise a kid, I guess, is how I would answer your question.

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

Chelsea:
We are rebuilding in our savings. We want to have a full six months’ supply, basically in cash. And then, I don't know, I've calculated your make 25 times your annual spending in order to be financially independent, which puts us at about $4.5 million, which sounds like a ridiculously unattainable goal.

But now that we're a lot closer to that than we were, I think we'll start working towards something in that ballpark. It's also been really important to us to give back generously. We give to a lot of causes and that are important to us. And so, being able to keep ourselves in a position where we can continue to contribute to those causes is important.

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

Chelsea:
Thank you.

Dr. Jim Dahle:
Okay, that was a lot of fun. And I think there's a lot of great lessons you can learn here. The first one is the one I already mentioned that you should spend your money on whatever you value. This family clearly values family, time with family, being able to have a large family. And so they sacrificed elsewhere in their financial life. They're not living in DC. They're not in Manhattan. They're not in the Bay Area. They did geographic arbitrage.

They've got a good income. There's nothing wrong with the income they have. That's more than twice the income I had as an attending physician when I was in the military. You can certainly live a very nice financial life on that income, but it allows them both to work part time.

How many of you out there would love to all both be working part time and be able to afford your lifestyle? Yeah, they've got a lot of kids. This isn't terribly unusual to somebody who lives in Utah like me. We've got four kids. The family next door has six. The family next to them has four. The family next to them has four. There's one down the street with 13.

Large families aren't terribly unusual around here, even if they are a little smaller on average than they used to be and certainly smaller than the average family in the country.

I think we're below a replacement rate right now. I think the average family is something like 1.6 kids. So, it is unusual to have a family with eight kids, but I'll tell you what, there are none of my kids I regret having. They're wonderful. And maybe if I'd had twice as many, I'd be happier. I don't know. It certainly would be challenging in a lot of ways, and not least of which is financially.

I've always been amazed when I see these studies that say how much it costs to raise kids. And then I talked to White Coat Investors on this podcast and elsewhere, and they're spending $30,000 or $40,000 a year per kid in private schools, and they've got them in travel sports, and they've got the greatest, latest sneakers, and they got to have the fanciest, newest cars. They have all the safety features in them. And I understand why you could spend a gazillion dollars per kid, but my parents didn't have a gazillion dollars. I was one of six kids. And my wife's parents didn't have a gazillion dollars. She was one of six kids as well.

Clearly you don't have to spend that much in order to have a family. I do think it's important if you want to have a family, especially if you want to have a large family, that you get started before you're done with the medical training pipeline. You just don't have enough time. If you wait until you've been out of residency for a couple of years, you're probably now 33, 35, 36 years old. Maybe you can have one or two kids, and then you're going to need an awful lot of help from our MFM friends helping you to get pregnant. It's just the way the biology works. So if you want to have a larger family, you have to get started, at least by the time you're in residency. If not in medical school.

I love the moves they made though. There's a lot of places that you can move with what you have now in home equity and not have a mortgage. All these people moving from California to Utah, they find out a house here is only $800,000, and they say, “Oh, only $800,000? I'll take two.”

And that's the way probably when you move from Utah to Indiana or Wisconsin or wherever someplace with an even lower cost of living. It is an option. You don't have to stay in your high cost of living area, especially if there's nothing tying you there. If your job's not the most incredible job ever, if you don't have a bunch of family there, if there's not some recreational pursuit there that you just can't live without, surfing or something like that, then consider a little bit of geographic arbitrage. It's amazing how much progress you can make in your financial goals just by moving a few states over.

FINANCIAL BOOT CAMP: REVOCABLE TRUSTS

Dr. Jim Dahle:
Let's talk about revocable trust. First of all, what is a trust? A trust is an entity that's separate from you, that can own things, that can do things, that can transact in business. But it's not you. It's something totally separate, like forming a corporation or an LLC. It's something else.

Any trust has got a beneficiary. Any trust has got somebody running it, a trustee. And any trust has a grantor, somebody who puts the assets into the trust, grants them to the trust.

The two main types of trust are revocable and irrevocable trust. An irrevocable trust, once you put the money in there, the trust owns it and you can't get it back. That's not the case with a revocable trust. A revocable trust, you can put assets into it. You can pull assets back out the next day. You can put them back in the day after that and pull them out the day after that. You can do this the whole rest of your life if you want to. That's the nice thing about a revocable trust is it's not even close to being permanent. You can just move things around.

Why would anybody use a revocable trust? Well, the main reason is to avoid probate. What's probate? Well, probate is a state-specific process for looking at your will and determining where your stuff goes. The beautiful thing about a trust is that it has its own rules that you write about where those assets go when you die. So it's not in your will. It's something totally separate. And the beautiful thing about that is you can put assets in the trust and those assets don't go through probate.

This is a state-specific process. Some states it's more painful and more expensive than others. And if you want to avoid that, you want to avoid that expense, you can set up these revocable trusts and put your assets in there at some point before you die. You don't have to do it years before, decades before. If you know when you're going to die, you can do it just before then and avoid this probate process.

Obviously, a lot of us don't know when we're going to die and we might get a little bit demented or something before then. It's probably a good idea to set it up beforehand in those sorts of situations.

The other nice thing about avoiding probate is probate is a public process. And so if somebody wants to see what you own, they can. And the nice thing about a trust is that's not a public process, it's very private. Most people need a will. Not everybody needs a trust, but a lot of White Coat Investors are going to want to avoid probate or have their state avoid probate. And so they're going to put a revocable trust in place at some point before they die.

What point should you put it in place? Well, there's no awesome rule of thumb. A lot of people say, “Well, when your net worth's seven figures, you should do it.” And there's nothing magic about that rule of thumb, but it's reasonable because you're not doing it right at the very beginning of your career, nor are you waiting until you're already well into retirement before you set it up.

I don't think it's an unreasonable rule of thumb, but the point is you got to put it in place before you die and you don't know when you're going to die. And so, that's what you want to be considering when you decide when to set one up.

Now, what does it cost to set these up? It can be pretty inexpensive, but I'd caution you not to just do it willy-nilly necessarily with an online form or something. By the time you're interested in setting up trust for your estate planning, you're usually fairly wealthy. You can afford to get good advice. Go to a high quality estate planning attorney in your state to set up trust and talk about what else you might need to do.

And maybe you want to set up some other things as well. Maybe your will needs revised. Maybe you want to put together a living will or some of those other documents. Power of attorney and those sorts of things. And that's also the time to look and see if you have estate tax problems and might need to consider some irrevocable trust or more exotic techniques there. But that's usually the time when people put together revocable trust as well. And then of course, like any estate planning technique, you want to review it every year or two or three to make sure it still meets your needs.

Now, how do you find a good estate planning attorney in your state? Well, you can start with Google like anybody does. And you can interview two or three of them if you like. You can ask for referrals. If you know people in your area that have done estate planning, you can ask them if they like who they used and take referrals that way.

There's no great database that rates them all or anything like that. When you interview them, make sure you're asking questions like, “Is this all you do? Are you doing other types of law as well? How many estate plans have you set up in the last year? How many clients like me do you have?” Those sorts of questions are the important ones to be asking an estate planning attorney.

Now, you have to fund the trust. Just setting it up doesn't do any good. You have to actually move the assets into them. And the way you do that is by retitling the assets. So if you have a brokerage account that you want in the trust, it has to be not in your name, it has to be in the name of the trust. Likewise, if you want to put your car in the trust, you need to title the car in the name of the trust. Likewise, bank accounts, your home, et cetera, they all need to be titled so they're owned by the name of the trust.

And that can be a hassle, but it's really silly to spend the money to get a trust set up and never put anything in it. So make sure you fund your trust if you're going to go to the trouble of actually putting them together.

Now, revocable trust is a general rule. These are passed through entities to you for taxable purposes. Now, you can still have some types of irrevocable trust. They're called intentionally defective grantor trusts that actually pass through that income to you as well for tax purposes, but pretty much every revocable trust, you just pay the taxes on your personal tax return. You don't have to get into these trust tax rates, trust tax returns. After you die, that trust exists separate from you though. And so a trust tax return will need to be filed then, and it will be subject to trust tax rates, which can be fairly high on relatively small amounts of income. So, keep that in mind as you set up your trust.

Now, a lot of people worry about asset protection and they think trusts are a great way to keep creditors from being able to get your money. Remember, asset protection is a process that usually requires you to declare bankruptcy to really use most of its techniques. And some states allow you to keep things in bankruptcy that you want to keep, like retirement accounts are a very common one. Maxing out your retirement accounts is a great asset protection technique.

You know what is not a great asset protection technique? Putting stuff into a revocable trust. That does not help you. Your revocable trust, sometimes called a living trust, is useless as an asset protection technique. It's for avoiding probate. It's not for asset protection because if you can revoke it at any time, if you can move the assets out of it at any time, the judge is going to expect you to do so in the event you have a judgment against you. And if you declare bankruptcy, all of the assets in your revocable trust are going to be accessible to your creditors.

So, it's nice for estate planning purposes, no use in asset protection whatsoever. If you want to think about trusts that help you with asset protection, we're talking about irrevocable trusts with their additional costs and downsides. So, keep that in mind. I hope that's helpful to you as you understand the purposes and benefits of putting together a revocable trust.

SPONSOR

Dr. Jim Dahle:
This podcast was sponsored by Bob Bhayani at Protuity. One listener sent us this review. “Bob has been absolutely terrific to work with. Bob has quickly and clearly communicated with me by both email and or telephone with responses to my inquiries usually coming the same day. I have somewhat of a unique situation and Bob has been able to help explain the implications underwriting process in a clear and professional manner.”

Contact Bob by calling (973) 771-9100, emailing [email protected] or just going to www.whitecoatinvestor.com/protuity to get your disability insurance in place today.

Thanks for listening to the Milestones to Millionaire podcast. If you'd like to be a guest on the podcast, you can go to whitecoatinvestor.com/milestones and apply today.

Thank you so much for what you're doing. We'll see you next time. Keep your head up and your shoulders back.

DISCLAIMER

The White Coat Investor podcast is for your entertainment and information only. It 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.

Umbrella insurance is a personal liability policy.

Different from a professional liability policy like your malpractice policy, it’s called an umbrella policy because it sits over the top of your auto policies and recreational vehicle policies, like a boat policy you might have, and your homeowners or renters policy and provides additional liability coverage. Each of those individual policies typically has an amount of liability insurance, and you’re required to have that on your car in every state in the union. But the amount you’re required to have is often ridiculously low, sometimes as low as $25,000 or $50,000, which is really nothing when people are out there driving around in $100,000 cars. If you total their car, that’s $100,000. If you also send them to the hospital, that could easily be hundreds of thousands of dollars, and you need liability coverage or you’re going to be paying out of pocket for that.

In general, the recommendation is to increase your personal liability coverage to a few hundred thousand dollars and then add on an umbrella policy on top of that. The amount of the umbrella policy is typically seven figures. Common amounts are $1 million or $5 million. You can get something in between those two. I hear these days you can even get as much as $10 million, although that was hard to get a few years ago the last time I shopped this around. It’s not about how much net worth you have. It’s about the liability you have, right? Because if you hit somebody and cause them serious damage worth millions of dollars, it doesn’t matter whether you have $300,000 or $3 million or $30 million. Your liability is the same. And so that’s what you’re buying when you’re trying to decide how much umbrella policy to buy.

Now what you will find is that, like with malpractice, when people get a million bucks they feel like, “Okay, I’ve been compensated for the damages. This is a lot of money in my life. This is nice. Me and my attorney are willing to walk away with policy limits on this.” That’s kind of the million dollar mindset that goes on out there. And so typically that’s the amount I recommend people have. Obviously that’s going to pay for your defense, just like with malpractice. It’s also going to pay for any settlement and any judgment that might come out against you.

Now, is it possible to have a judgment against you for more than a million dollars? Yes, it is. But the higher you get, the less likely it is, and the less likely it is that that person decides, even if they get a judgment above policy limits, to go after your personal assets. It’s just much harder to get personal assets than it is to get the money out of a liability insurance policy. But that’s how it works, right? It just gives you additional liability coverage.
You might be surprised to learn that most of these claims are not from people slipping and falling on your walk, from being bitten by your dog, or a kid being injured on your trampoline or your pool or something like that. Most of them are auto related. Eighty percent of umbrella claims are auto related. So if you’re maybe not the world’s best driver, nobody thinks they are, maybe it’s worth having a little more liability coverage. If you’ve got teenage drivers, right, they’re far more likely to get in a wreck than you are. That’s a good reason to have significant umbrella coverage.

You’ll pay for it, of course. As soon as they find out you’ve got a 16-year-old boy in your house, especially once he gets a ticket or two or has a wreck or two, you’re going to find your insurance goes up pretty significantly in price. But in general, lots of people find that they can buy $1 million of umbrella coverage for $300, $400, or $500 a year. It’s dramatically cheaper than your disability insurance. It’s cheaper than your life insurance. It’s dramatically cheaper than your malpractice insurance. It’s not that expensive.

Now, if you decide, “I’m a belt and suspenders kind of person. I want a whole bunch of liability coverage,” and you want to get yourself a $5 million policy, you might be paying $1,500, $2,000, or $3,000 a year for that. And who should get that? Well, if you’re getting to the point where you’re considering expensive, complex asset protection techniques, you’re thinking about an overseas trust or a family LLC or a grantor trust like a SLAT, something like that. You’re thinking about paying thousands of dollars to attorneys to come up with these additional asset protection techniques. Well, at a certain point, you’ve got to go, “Well, maybe I’d just buy more umbrella coverage too.” For a couple thousand dollars a year, it’s way cheaper than setting up a bunch of trusts, and it seems like a reasonable addition if you’re still concerned about asset protection situations.

But it covers all kinds of personal liability, right? You can even cover things like libel. Read the coverage in the policy. Every one is a little bit different, but it’s going to cover damage from car accidents. It’s going to cover people getting hurt at your home. It covers things like libel. It covers all kinds of things you might not expect it to cover. So if you have some sort of a claim against you, make sure you check your umbrella policy. You might be surprised that you do have coverage for that thing.

It’s not, however, going to sit over the top of your malpractice coverage. It doesn’t give you additional professional liability insurance. So if you were thinking you were going to get another million dollars you could pay to a patient if they sue you because you damaged them, that’s not the case. None of them cover that, so be aware of that. Basically, it just sits on top of your auto and home policy limits. So your auto policy pays out its whole amount, and then you go to the umbrella policy. Often it’s with the same company. Sometimes it’s not. That’s how it works. Your auto policy is only going to pay out policy limits, and above and beyond that, it’s up to the umbrella policy.

So I think the main takeaway here is that this is just one of those insurances you need to have, right? You need to have health insurance. You need to have disability insurance or something if you’re not yet financially independent. You need to have some term life insurance if anybody else depends on your income too. You probably ought to insure your house so if it burns to the ground, you can replace it. Most of us can’t afford to self-insure our house. And liability coverage, right, both malpractice and personal liability coverage. So the place people usually start is just to go to whoever’s providing them their auto policy or their homeowner’s policy. Often that’s the same company. But we’ve got a service here at WCI. If you go to our insurance page, we’ll get you connected with that. If you go under the recommended tab, you will find that, and we can help you get not only home and auto coverage, but umbrella coverage as well.

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.