Podcast #55 Show Notes: Basics of Investing
I've found that many of you read the blog but don't listen to the podcast and vice versa. So this episode was taken from a blog post I wrote earlier this spring. It is so important I wanted to make sure that both blog readers and podcast listeners get this information. It is basic investing 101 that everyone should know. You can listen to the podcast here or it is available via the traditional podcast outlets, ITunes, Overcast, Stitcher, Google Play. Or watch the video here or on YouTube. Or ask Alexa to play it for you. Enjoy!
Podcast # 55 Sponsor
[00:00:13] Splash Financial is a leader in student loan refinancing for doctors. Hundreds of you check your rate with Splash each month, and it only takes minutes to do so! Consolidate and refinance your federal and private student loans to save money and simplify your life. No application or origination fees and no prepayment penalties. Splash has new rates as low as 3.25% fixed APR which can save doctors tens of thousands of dollars over the life of their loans. Plus, WCI readers receive a $500 welcome bonus for refinancing with Splash. Visit Splash Financial to learn more and to check your rate in minutes.
Quote of the Day
[00:01:01] “Save money on the big, boring stuff so you can have something left over for life’s little pleasures.” -Elisabeth Leamy
[00:01:29] I wrote a blog post a few months ago called Investing 101 and I think it is so important that we ought to talk about these subjects on the podcast as well. The idea behind that post was to share all things I think everybody ought to know about investing. They are really the basics. We will go over them today and just make sure you have them down.
- [00:02:12] Don't buy investments that you don't understand.
- [00:03:12] Limit speculation.
- [00:04:10] Higher risk is a necessary but not sufficient condition for higher returns. Just because you are taking more risk doesn't mean you are going to get higher returns.
- [00:04:39] Diversify your investments.
- [00:05:05] Invest when you get the money.
- [00:05:51] Don't catch a falling knife.
- [00:06:21] Past performance does not guarantee future performance.
- [00:07:28] Stop playing when you have won the game.
- [00:07:52] Be careful adding new asset classes to the portfolio when you get interested in investing.
- [00:08:23] Make sure you rebalance your portfolio every now and then.
- [00:09:08] Make sure you stay the course in both the bull market and a bear market.
- [00:09:41] Don't mix your investing and insurance.
- [00:09:49] Use your retirement accounts. If you're given the choice always invest inside a tax protected account.
- [00:10:10] Remember that your costs, whether they be taxes or commissions or advisory fees, compound just like your investments do. So over the years they can really add up to a significant amount of money. Be sure to negotiate them at every chance possible.
- [00:10:26] Remember that the investor matters more than the investment.
Q&A from Readers and Listeners
- [00:11:18] “Can you talk about the best practices for your sensitive documents like taxes, passports and social security cards etc.?”
- [00:13:10] “When does USAA or another reputable insurer like Amica not make sense financially?”
- [00:14:44] “Am I able to deduct health insurance premiums from my wife's plan and the other plan with me and my son?”
- [00:15:41] “When do you recommend increasing disability insurance? Should you do it as soon as you sign your attending contract or after your first paycheck or later?”
- [00:16:24] “I have a small I 401k for survey money with Vanguard. As this is going to be a down income year compared to my future as an attendee, what do you think about closing that and rolling it into a Roth IRA?”
- [00:16:55] “Can you go over every section of your auto policy and explaining what each means or what kind of coverage you have and why?”
- [00:18:35] “Is jewelry insurance ever worth it?”
- [00:19:18] “How much is your time worth when you become an attending?”
- [00:20:16] “My husband and I are too well compensated subspecialists who have our financial affairs in order. We are considering setting aside some money for our kids as a jump start on life fund. I know this is a controversial topic but we've decided to go forward with it. I've narrowed this down after research to either doing a uniform transfer to minors account or a spendthrift trust fund. Thoughts?”
- [00:24:25] “I received a ten thousand dollar signing bonus for a 24 month commitment. Maybe 5800 after taxes. And then I decided to separate from the institution at 20 months. I reviewed my contract and realized that wasn't prorated but I basically had to pay it all back. H.R. asked me to send him a check and then hire an accountant on my own and amend my tax returns for the year bonus was paid, to recover the loss. I wonder if there was a less inconvenient way to do this. Like holding my last paycheck etc. I contact an attorney who recommended forget about it since they won't come after me for only 5800 bucks anyway and they probably won't take me to court. What is your opinion?”
[00:00:00] 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. Here's your host Dr. Jim Dahle.
[00:00:13] Welcome to podcast number 55. The basics of investing. Splash Financial is a leader in student loan refinancing for doctors. Hundreds of you check your rate with Splash each month and only takes minutes to do so. Consolidate and refinance your federal and private student loans to save money and simplify your life. No application or origination fees and no prepayment penalties. Splash has new rates as low as three point five percent fixed APR which can save doctors tens of thousands of dollars over the life of their loans plus WCI readers receive a 500 dollar welcome bonus for refinancing with splash visit. W. W. W. White Coat investor dot com slash splash financial To learn more and check your rate in minutes.
[00:01:01] Our quote of the day today comes from Elizabeth Leamy who said saved money on the big boring stuff. Can you say you can have something left over for life's little pleasures.
[00:01:10] Today I thought we'd talk a little bit about the basics of investing. This is actually the second podcast we recorded on April 17th and the reason for that is my assistant Cindy is getting ready to go to Fiji and she says we've got to get ahead on these so that she doesn't have to record any of them while she's in Fiji and I think that's a good idea. I don't know how I'd record these without her .
[00:01:29] I've discovered over the years that there's a lot of you that listen to the podcast and don't read the blog and others that read the blog and don't listen to the podcast. So sometimes when I get some information on only one of them it really doesn't get to a whole bunch of you. I wrote a blog post a few months ago called Investing 101 and I think it's so important that we probably ought to talk about these subjects on the podcast as well. The idea behind that post was that there are things that I assume everybody knows about investing but the truth of the matter is these are all things that I've picked up over the years that I think everybody ought to know about investing. And they're really the basics. But if you've never been taught them you need to learn them. And so let's go over them today and just make sure you have them down.
[00:02:12] The first one is don't buy investments that you don't understand. It seems so basic right. Don't buy stuff that you don't understand. If someone's explaining an investment to you and you can't figure it out in a couple of minutes just drop it. There are no called strikes in investing. You don't have to invest in everything. So if something is too complicated just skip it. On the other hand make sure you understand what the investments you are invested in actually do so you understand what they can do. You shouldn't be surprised in a big nasty bear market when half of the value of your stock index fund goes away. That's a stock index funds do in big nasty bear markets so it shouldn't be a surprise to you.
[00:02:51] You know it's interesting a lot of times I run into people who bought something they didn't really understand when they got into it it's usually an insurance product often something like whole life insurance and they just didn't understand how whole whole life insurance worked. And if they had understood it they would have never bought it. And so before you get into something especially something that's a lifelong commitment make sure you understand how it works.
[00:03:12] The next thing you should understand about investing 101 is to limit speculation. Hey you're looking for investments that actually make money not something that you just hope goes up in value. We're talking about bitcoin and gold and Beanie Babies. There's a really interesting picture floating around on the Internet that shows this couple in 1999 sitting on the floor in a divorce court dividing up their beanie babies because that was such a large part of their net worth. A few months later all those Beanie Babies value went to like three dollars and basically they lost all their wealth anyway. But it's such a classic picture just to think that they were people that cared enough about these little dolls the sold for I don't know five bucks that they would be arguing about them in divorce court. So limit speculation into stuff like that. If you must speculate on some limited to five to 10 percent of your portfolio.
[00:04:10] Next topic higher risk is a necessary but not sufficient condition for higher returns just because you're taking more risk doesn't mean you're going to get higher returns even though in general as you take more risk on something like stocks instead of bonds you're going to expect higher returns. Those expected returns don't always show up and don't assume that you're going to get paid more just because you're taking on more risk some risks like individual stock risk are uncompensated risks meaning you don't get paid to take them.
[00:04:39] Which brings us to the next topic diversify. OK diversify your investments. Diversification protects you against what you don't know and there's a lot that all of us don't know. You want to diversify both between asset classes like stocks and bonds and real estate as well as within real asset classes where you want to own you know preferably hundreds of different securities so that your retirement is not dependent on what happens with any one company.
[00:05:05] Invest when you get the money. A lot of people are worried about investing a lump sum. Well the truth of the matter is we get lump sums all the time every time you get a paycheck you get a lump sum and you've got to invest it. You're not going to divide that up over the next year and try to dollar cost average it just invest when you get the money. And over the years that you invest you take advantage of being able to buy sometimes at a low price sometimes at a higher price but over the years it will work out well for you if you just invest when you have the money. It's too hard to time the market and try to get it in there and buy low every time. It's just not going to happen and what happens is you get so tripped up trying to buy low end up not buying at all and buying later at an even higher price.
[00:05:51] Here's another one. Don't catch a falling knife. What I mean by that is when you see the market dropping you know if you're paying really close attention and you try to buy right after it goes down a lot of times it's just getting started on its way down. And so don't try to time the market. It's hard to do even after the price has gone down. Now the only thing you know when the price has gone down sharply is at least you're better off buying it now than you were a few days ago when the price was higher. But that doesn't necessarily mean it's going to go up anytime soon. It might just continue going down.
[00:06:21] Past performance does not guarantee future performance. This is such a truism that mutual funds are literally legally required to put it in their prospectuses. And so you want to really make sure that you understand that is the case. You cannot look at something and look at what it's done in the past and assume that that is what it is going to do in the future. Another important point. Among the basics of investing is that you better have a good reason to not use an index fund. The data showing index funds are better than actively managed funds is so robust and so well researched that you really need a good excuse to use something that isn't an index fund.
[00:07:03] Now a good excuse might be will I want to invest in this asset class it doesn't have an index fund or my 401k doesn't have any index funds in it you know. Those are reasonable excuses but just because you can find an actively managed mutual fund which has better returns than the index fund in the last five years is not a reason to buy the actively managed fund because that was probably just luck and chances of a persisting for another 5 years are not good.
[00:07:28] Here's another important truism. Stop playing when you've won the game. Remember that investing as a single player game you're not playing against your brother in law. You're not playing against the market you're only playing against your own goals. So when you reach your goals feel free to dial back the risk that might mean paying off your debt like your mortgage. It might mean a less aggressive asset allocation but don't feel like you have to continue taking risk after you don't have a need to take that risk anymore.
[00:07:52] Be careful adding new asset classes to the portfolio when you get interested in investing. There's always this temptation. Have more and more and more. As far as asset classes go and before you know it you got 15 or 20 I'm in a portfolio at that point you're just kidding yourself you are just adding complexity You don't need in your life. I think it can make a very good case for going to at least three to seven asset classes in your portfolio. But once you get beyond there the law of diminishing returns kicks in very rapidly and I see no reason for anybody to ever have more than 10.
[00:08:23] Make sure you rebalance your portfolio every now and then if you're rebalancing between a high expected return asset class like stocks and a low expected return asset class like Bonds rebalancing probably will not boost your returns. What it will do though is control your risk and that's more important in investing than boosting your returns. Remember that there are many roads to Dublin. There are a lot of different methods of investing that can be successful. You don't need to argue with people about why your method is better than anybody else's. The truth of the matter is there are a lot of very successful investors that have slightly different methods of investing and so it's OK to have something that's different than everybody else as long as it's reasonable.
[00:09:08] Here's another truism. Make sure you stay the course in both the bull market and a bear market. In the beginning when you're a beginner investor, The hardest thing to do is stay the course in a bear market when you're hemorrhaging money. But surprisingly as you become an intermediate investor it starts becoming hard for you to stay the course in a bull market. You feel like it's been going up so rapidly or it's gone up you know so much that it's got to go down next. Well the truth of the matter is you don't know. So stay the course with your written investing plan. Whether it's dropped a bunch lately or whether it's gone up a bunch lately.
[00:09:41] Don't mix your investing insurance when you do that you end up with a crummy investment and usually a crummy insurance product as well.
[00:09:49] Use your retirement accounts. If you're given the choice always invest inside a tax protected account. Taxes are some of the biggest investing costs out there and the more you can minimize them the better off you're going to be. Likewise don't let the tax tail wag the investment dog and don't do something just for tax reasons if it doesn't make sense as an investment above and beyond the taxes.
[00:10:10] And remember that your costs whether they be taxes or they'd be commissions or advisory fees they compound just like your investments do so over the years they can really add up to a significant amount of money. Be sure to negotiate them at every chance possible.
[00:10:26] And of course remember that the investor matters more than the investment. If you can concentrate on being a good investor it matters less what you invest in. And the reason why is because the difficult things to do as an investor is to control your own fear your own greed and avoid performance chasing.
[00:10:44] All right let's move on to some questions that readers have sent in. In fact I've got an entire podcast worth of questions from one reader here. This is actually a doc who as a resident arranged for me to come out and speak to his residency and he says I think I've converted at least 100 people to WCI enthusiasts. Well if you can convert 100 people to be in WCI enthusiasts I can probably feature you on the podcast here. So let's talk about some of his questions although truth be told he could probably be given a lecture on a lot of these questions he's had.
[00:11:18] He says I don't think that's been addressed anywhere. But can you talk about the best practices for your sensitive documents like taxes but passports and social security cards et cetera. And then talks about what he does which I think is a great idea. He says I keep hard copies in a filing cabinet home but everything is starting to go digital and everyone needs a backup in case the house burns down. And so he actually keeps digital backups of all this stuff as well as in a filing cabinet.
[00:11:43] I think another great practice there is a fire safe. Now I understand if the fire gets too hot like a forest fire comes through your neighborhood like it did for one of our fellow physician bloggers not that long ago that I think even the fire saves burned down as well. But I think that's a good idea to keep your social security card and your passport and maybe some money inside a fire safe in your house. But a backup electronic copy somewhere in the cloud is also a great idea. The only downside is it introduces some security risks you know as you have seen anything online can be hacked and so there is a certain amount of risk to having the security of a backup and you've got to be a little bit careful with that. You can also scan things with even your phone and send it right into the cloud. Any time you have it that helps keep your paperwork down. I mean I've got 2-4 drawer filing cabinets at our office and there are just about full and I think if I was really hardcore about it I think would be great to have electronic records of that stuff.
[00:12:49] This doc also uses a time machine for a local backup for his Mac and then also a paid service like back blaze that secures those files. I'm not familiar with either one of those but they are basically digital solutions to this sort of problem. The nice thing about having a system is once you put it in place it's kind of set.
[00:13:10] All right next question was when does USAA or another reputable insurer like Amaka not make sense financially. This is what I struggle with myself right. I've got USAA insurance that I picked up while I was in the military and they're well known for excellent service. I mean when you have a claim they'd bend over backwards and seemed to get it all taken care of right away. But I think a lot of people that go and compare the price their pay in the USAA to somebody else. For example Warren Buffett's firm what's the one with the lizard, Cindy says it is Geico, they've got these low prices a lot of times and they're cheaper than USAA so when do you give up that famous USAA service in exchange for a lower price. well at a certain point in life you don't care so much about the price. And so if you're at that point I guess I'd focus more on what you want as far as service goes but I think if it's a little bit cheaper it's probably not worth changing if it's a lot cheaper than maybe it is worth the additional hassle you could have an a claims process with a less reputable insurer. I don't know if I had to draw a line. I'd say if it's 50 percent cheaper it's probably worth changing over and dealing with the hassle.
[00:14:19] How many quotes would you recommend getting? I think two or three are probably enough. I mean who wants to spend all day getting quotes from insurance companies? This isn't something I shop around every year I'm not sure I've shopped it in the last decade which probably means if I went to GEICO I probably could get a 50 percent discount on my insurance. I wouldn't be surprised. I think it's like anything when you go and renegotiate your your cable and your internet and those kinds of things. If you're the squeaky wheel oftentimes you get an additional discount.
[00:14:44] All right the next question is about health insurance. If I am able to deduct health insurance premiums from my wife's plan and the other plan with me and my son. Well we file jointly but technically on the independent contractor her name is the only one on her health insurance. OK well this is kind of a unique situation where they've got different health insurance policies one on her and one on him. I don't know that I would go through the hassle of trying to have separate health insurance policies I'd probably try to get most of the family on one. It can make sense to have separate ones. If an employer is paying for one or the other but you've got to be in a pretty unique health situation for it to make sense for your family to actually manage to separate health plans. But I guess technically his question is if he's the only one who's self-employed. Only his policy can be deducted. I don't think he can go and deduct her policy. If he's the one who is self-employed and that's not a family policy that covers her.
[00:15:41] When do you recommend increasing disability insurance should you do it as soon as you sign your attending contract or after your first paycheck or later. I think the idea with disability insurance is your risk is never higher than when you're young and broke. So as soon as you can is the time to increase it to the amount you need and then you should be decreasing it throughout the rest of your career. I mean ideally as a resident you're buying as much as you'll need the rest of your life. But the truth is because it's expensive stuff most of us can't afford it as resident. And so we're forced to buy less than we really need. And then once we get a little more income as an attending we can actually by the amount we need. So I'd say as soon as you have the money to do it which probably means you're first attending paycheck.
[00:16:24] Ok I have a small I 401k for survey money with Vanguard as this is going to be a down income year compared to my future as an attendee. What do you think about closing that rolled it into a Roth IRA. I always think that's a great year the year you leave residency is a good year to do Roth conversions if you have the money to be able to pay the taxes to do it. And basically with an I 401k unless that allows you to do in plan Roth conversions which I don't think the Vanguard one does. You're going to have to close the plan and pull that money out.
[00:16:55] Then he asks for maybe post or podcast going over every section of your auto policy and explaining what each of means or what kind of coverage you have and why. Well I've got full coverage on our autos for a few reasons I think the main one is when I go rent a car. I don't want to have to buy their insurance. And that's probably the main reason I have full coverage on our autos. It would be kind of a drag to replace our new Sequoia is probably still worth 50 grand. That kind of a drag. So maybe that's worth having an insurance plan to replace it if it were totaled it and it were my fault. I don't know that I need to have that on my old Sequoia that thing is probably worth less than 10 grand and we could certainly replace that out of pocket. As far as the other parts on the policy I've talked to other podcasts about the importance of liability insurance. That's where I really focus when I buy auto and home insurance because that's my biggest risk. I mean your liability is way higher even than the value of your house and a lot of ways. And so I think it's key to go over your liability coverages with a fine tooth comb that understand what it covers and what it doesn't. And then as far as other coverage if you if it would be a financial catastrophe to lose the car and get full coverage. Otherwise I wouldn't sweat it so much. But what are the little things like the uninsured or underinsured motor coverage. You'd be surprised how little that actually covers covers in a lot of ways it's basically insurance that costs a fair amount and doesn't provide a lot of benefit. So when I go over that from time to time with somebody on the phone I ask exactly what does this cover and how much does it cost. And think about dropping those things that I don't need.
[00:18:35] Next question is jewelry insurance ever worth it. Well you know I think I do have a policy still on my wife's wedding ring. Do we still need it. Probably not. Is it dirt cheap Yeah. It doesn't cost as much it's a few bucks. I think when we first got married it was probably would have been a financial catastrophe to lose that ring at this point it probably isn't. But I think in general the key point here is to realize that your typical homeowner's or renter's policy doesn't cover jewelry. It doesn't necessarily cover expensive computing equipment and it generally doesn't cover expensive firearms. So if you've got any of that stuff and you want an insured it's probably an addition on that policy. And I think that's the moral of the story.
[00:19:18] All right. The last one of his questions that I think I'm going to go over on this podcast is how much is your time worth when you become an attending your hourly rate of pay is pretty high. And so you've got to look at everything else in your life and compare it to what your time is worth and probably to an after tax figure of what your time is worth.
[00:19:36] You know if you're spending hours and hours on the lawn but you could be spending that time work on another shift you know maybe ought to be hiring out some of that stuff and really looking at your whole life through the perspective of what your time is worth. But don't carry it away too much. I mean at a certain point I think there's some value in actually knowing how to do some things in your life and being a little bit of a jack of all trades. From a purely monetary standpoint a lot of stuff doesn't make sense for a high earner like starting a blog doesn't make sense. Most blogs are never going to pay you anything on an hourly rate. That's anything at all comparable to your you know what you can make as a physician.
[00:20:16] All right let's move on and talk about a few other questions that I've got from other readers in the last few weeks. This one comes from a doc who says My husband and I are too well compensated subspecialists who have our financial affairs in order. Many thanks to you and are considering setting aside some money for our kids as a jumpstart on life fund. Boy I wish I was there kids. I know this is a controversial topic but we've decided to go forward with it. My in-laws did that for my husband has been such a gift to us to be nearly debt free except for a Bay Area mortgage which I'm aggressively trying to pay off and I've narrowed this down after research to either doing a UTMA or a uniform transfer to minors account versus a spendthrift trust fund.
[00:20:57] I'm hoping to have quite a bit accumulated maybe 500000 for two kids by the time they're 30 ish so the dividends will likely exceed the kiddie tax threshold eventually their 529 is already funded as much as I care to do. Front loaded those 100000 dollars at birth. My concerns regarding the UTM is the kiddie tax rule and the low age of maturity. Although I think I can stipulate that as being 25 in California that's pretty unusual. I'm not sure if that's actually true. I'd have to look that up. My concern with the trust fund is the taxes trust rates which kick in a much lower threshold than income taxes.
[00:21:31] Well this doc has a pretty good understanding of the upsides and downsides of these two options. A UTMA is basically a child's taxable investing account which means when they turn 18 or 21 usually and maybe 25 in California I don't know I'd have to look that up. It's their money. If they want to blow it on cocaine they can. They want to blow it on a Porsche they can. You have to know the Kid well to know whether that's a good option for him and if that's not a good option for him then a spendthrift trust probably is. A spendthrift Trust is basically a trust that details when they get the money and under what circumstances you know you can require them to graduate from college or to have a real job or you know whatever you want, Provisions you can put in that trust and you can have them not get the money until they're 30 or 40 or 50 or 60 or whatever. That's all part of the trust.
[00:22:20] Sounds pretty cool to have that much control although I'm not sure I'd want to have quite that much control over my kids lives from the grave. But it comes with a significant downside. Number one it costs money to put a trust in place and to update it and keep it in force and all that stuff. Number two once you put money in that trust it's taxed at a pretty high rate. The trust rates max out pretty quickly on a relatively low amount of income and so that is a significant downside to it. What would I do if I were this couple. I'd probably split the difference. I'd probably put 100 thousand dollars or so of it into a UTMA account. Remember that if you invest that very tax efficiently it doesn't kick out that much in income. The problem with the kiddie tax is basically your first thousand dollars in unearned income that your kids have is tax free in the next thousand dollars is taxed at their tax rate. But after that it's all taxed at
your tax rate the higher trust rates. [Update shortly after publication] And so if you've got that invested in a stock index fund or something that's about a hundred thousand dollars before it starts getting taxed at your tax rate I guess you could put more than that in there if you invested in something like muni bonds that come out tax free. But for the most part that's kind of the upper limit on it unless you want to be paying taxes on it at your rate. So if you want to put five hundred thousand dollars for a kid away maybe I'd put 100 or 200 into the UTM A and the rest into a spendthrift trust. There's no reason why it has to be one or the other. You could do both. And that might help limit how much you pay in taxes as well as the fees on the trust that you have to pay to the attorneys.
[00:23:54] Good question really. First world problems like everything we talk about on this podcast. But you know the truth is no matter how much income you have you still have financial issues and concerns and worries. And we talk about those here at the White Coat investor because very few places do. Usually when you start talking about how you want to leave half a million dollars to your kids everyone just makes fun of you. And I think that's probably not appropriate. I mean just because you're a higher and very wealthy person doesn't mean you don't have some money worries even if they are first world problems.
[00:24:25] All right. Next question comes from another long term reader. I've read your website newsletter or book and everything WCI related since medical school when WCI started. Wow. Pretty impressed with that. Long story short I'm an anesthesiologist I received a ten thousand dollar signing bonus for a 24 month commitment. Maybe 5800 after taxes. And then I decided to separate from the institution at 20 months. I reviewed my contract and realized that wasn't prorated but I basically had to pay it all back. H.R. asked me to send him a check and then hire an accountant on my own and amend my tax returns for the year bonus was paid to recover the loss. I wonder if there was a less inconvenient way to do this. Like holding my last paycheck etc. I contact an attorney who recommended forget about it since they won't come after me for only 5800 bucks anyway and they probably won't take them to court.
[00:25:14] Well he's just looking for advice on this. The attorney is probably right in that they're not going to come after this big hospital system housing and come after him for five or six thousand dollars. That said I don't think your integrity is worth only five or six thousand dollars. I certainly wouldn't sell mine out especially for that price. And so I think the right thing to do is sign a contract that if you didn't stay for 24 months you'd pay at the bonus, you didn't stay for 24 months I think you ought to pay back the bonus. And I don't know of a really easy way to do this. That is fair to both the employer and employee other than just cutting them the check and amending those taxes. The good news is it's really easy to do a 10 40 X. It's literally probably a half hour of work to amend that and get it get your money back and so that's probably what I would do with that. So that's what I told the doc when he emailed that question to me.
[00:26:07] All right. I think that brings us to the end of our questions today. I hope it's been a useful podcast. I want you to remember the basics of investing because the truth of the matter is most investing is pretty basic and once you learn those basics you can use them throughout your life. And if you can apply the basic principles throughout your career it's amazing how quickly you can accumulate wealth versus if you only learn these things at the time of retirement.
[00:26:30] Our sponsor today Splash Financial which is one of the great refinancing companies that we're partnered with here at the White coat investor. They had a few changes recently one of which was they dramatically reduced their rates and so I think you'll find if you shop them as you're looking at other lenders that you'll find the rates are much more competitive than they used to be. And the second thing is they increased their limits on how much they will lend to you from one hundred fifty thousand dollars to three hundred thousand dollars. So I think that now gets most docs into their eligibility criteria. But they are a leader in student loan refinancing for docs and hundreds of you check your rate with Splash each month. It only takes minutes to do so. Consolidate and refinance your federal and private student loans to save money and simplify your life. No application or origination fees and no prepayment penalties. Splash has new rates as low as three point five percent fixed APR which can save doctors tens of thousands of dollars over the life of their loans. Plus WCI readers receive a 500 dollar welcome bonus for refinancing a splash. visit White coat investor dot com slash splash financial to learn more and to check your rate in minutes.
[00:27:37] Make sure you're keeping up with the site if you're not following us on social media you're missing all the latest and greatest so. Be sure to follow us on at WCInvestor or the white coat investor Facebook page. Head up shoulders back. You've got this. We can help. See you next time.