I received this email yesterday in response to yesterday's blog post:
Is this a joke? Regularly scheduled programming while every physician is on the front lines of an all out war with COVID19?? My private practice anesthesia group is cancelling all elective cases….Cmon now….Either put it on hold or help
Typically 1% or less of people bother sharing the way they feel with me about a given post. So if I get one email, I assume there are 100 or more who feel that way. So I thought we would interrupt our “regularly scheduled programming” today to share a few quick thoughts and explain our plans for the next couple of months.
# 1 We Care About Your Safety
Unlike most posts (which are written months in advance) this post is being written the day before publication from an emergency department where I am working my first shift since things got serious in my city. Two emergency physicians in this country are currently critically ill with COVID-19, one in Seattle (younger and stable) and one in New Jersey (older and not so stable.) I cannot ever remember feeling so anxious to go to work as I did before this shift, and that includes my first shift as an attending. Please do all you can to keep yourself, your family, and your patients well. Know that we are thinking of you, praying for you, and perhaps most importantly, right here alongside you fighting against the pandemic. Thank you for what you do. The work you do matters. You have always known this, but events like this will remind the rest of the world. People in China are applauding the health care workers as they walk past their apartments to the hospitals each day to do battle. As we so often say to our warriors–
Thank You for Your Service!
# 2 We Can Only Read So Much About Coronavirus
I think I spent 6-12 of the last 24 hours reading about and thinking about coronavirus. There is nothing else in my email box, my social media feeds, or on the news. At a certain point, reading more is not helping, it just makes me more anxious. The Happy Philosopher explains it well:
I don't think you should ignore the news completely, but I agree that limiting your consumption is likely good for your mental health. In the coming weeks as we go from work to home (with cooped up kids) and back to work, my readership is not going to suffer from lack of information about coronavirus, but we are likely to seriously benefit from a little bit of distraction every now and then to get our minds off of the serious health, personal, and economic consequences that are occurring and are likely to worsen before they get better.…[Dr. Weil] had some interesting ideas, a few that sounded crazy, but perhaps the most fascinating to me was the concept of the ‘news fast’. Basically he advocated taking intermittent breaks or fasts from news with the idea that constant exposure to news creates stress, therefore lowering the effectiveness of our immune system and leading to a greater propensity for disease.
I kind of blew it off along with most of the other things in the book until years later, when a cascade of events rekindled the idea. Enter the economic crisis of 2009. I was entering a period of maximum work related stress and burn-out just about the time I was simultaneously watching 30% of my wealth evaporate. I was seeing a slow down or actual reversal of my work volume which I figured would probably translate to a lower income. I was consuming countless news stories about the end of financial systems as we know it. Peak oil was threatening to end civilization, politicians were never more partisan*, danger was everywhere. I consumed this negative news with the zeal of a heroin addict looking for his next fix. I was checking the stock market and spot gold prices daily. I ordered a three month supply of Dungeons & Dragons style iron rations which would feed my family through the inevitable disruption of social order.
I felt terrible all the time. I was worried and anxious; the stress felt like a thick fog everywhere I went. Maybe I really was safer, but it sure didn’t feel that way. Then I just stopped and paused. Some part of me dug way back to the idea of Dr. Weil’s news fast and I asked myself two important questions. Was my consumption of news helping or hurting me? Was any of it actionable?
Answer: It was absolutely hurting me. Little, if any of it was actionable. In fact, looking back in the rear view mirror, consumption of news has hurt me in the aggregate. It has led to poor decision making. Overall it has been destructive to my emotional health and taken time from more productive activities…and it is doing the same to you.
There is no doubt that personal finance and investing are not the most important subjects in the world, but that isn't new–it has always been like that. The material on this blog and podcast will not be coronavirus-focused over the next few months. That is on purpose. It isn't that I am not thinking about it. It isn't that I lack the ability to come up with a coronavirus angle on everything I write. It is a deliberate decision to offer you a break from what you are doing the other 23 hours and 50 minutes of your day. Take what you find useful and leave the rest.
# 3 Many of My Readers Are Less Busy Than Usual
As I mentioned, I am sitting in an emergency department right now. There are no patients here. My partner saw no patients overnight. Our volumes are down dramatically. We are not alone. Even in Seattle, emergency department volumes are down 25%. I guess it turns out that all those patients weren't so emergent after all. Many clinics are closed. Elective surgeries are canceled. The fact remains that many, perhaps even the majority, of my readers are less busy than they were two weeks ago. You're not all infectious disease specialists and intensivists. Some of you are dermatologists and attorneys and small business owners. All of your non-work activities have been canceled, and many of you are out of work. No kids' sports. No bar crawls. No March Madness. Can't go to the gym. Movie theater is closed. Your vacation is canceled etc. You have time to learn some new skills and gain some new information. For many of you, the next few weeks will provide you an opportunity to become financially literate and put a financial plan in place for the first time in your lives. I don't want you to miss that opportunity.
# 4 The White Coat Investor Feeds a Lot of Families
There are five families who depend on The White Coat Investor, LLC for a large chunk (the majority for most) of their household income. WCI is also a major referral source to dozens of other businesses who in turn have families who rely on them for their income. As other business owners know, that responsibility is not one that we take lightly. If we are able to work safely, we will continue to do so.
Luckily, all members of The White Coat Investor staff have a home office. This entire business has always been run from home. Our biggest challenge in the coming weeks will be getting our work done while keeping the kids from killing each other. Certainly, that will affect our productivity, but we certainly won't be “putting it on hold”. Even with all of us continuing to work just as much as usual, we still expect a drop in business revenue of 75%+ over the next 3 months for various reasons. Luckily the business has no debt and even some cash reserves that should be able to tide us over and allow us to make payroll during these trying times. I fear that many businesses in the world are not in the same position.
# 5 The Need is Great
As I write this, the stock market is down over 9% today and down 28% from its recent peak. This is the bear market I have been warning my readers about for years. For many of you, this is the first time you have suffered through the loss of real money that you invested for your future instead of spending on a new car, a kitchen renovation, or a Paris vacation. We will be here to reassure you that while every bear market is different and our crystal ball is just as cloudy as yours, we've seen this movie before and we know how it ends.
This is the time to stay the course and follow your reasonable, written financial plan. No, you should not take your emergency fund and invest it in stocks to take advantage of a “bargain.” But neither should you be afraid to rebalance and continue to invest for your future as per your routine. The money you invest in the coming weeks will have the best long-term return of any money you invested for the 5 years before and after this event. As Shelby Cullom Davis said, “You make most of your money in a bear market, you just don’t realize it at the time.”
Readers will need reassurance not to sell low (like three of my partners who did so near the market bottom in 2008 only to need to work a decade longer to recover from that mistake). Those readers who have not gotten around to putting a written financial plan in place will now feel more impetus to do so. Some will need to learn how to tax loss harvest. Others will be more convinced of their mortality and more willing to buy that insurance and do that estate planning they have put off. Let us know what financial subjects you would like to see on the blog and podcast in the coming weeks and we'll interrupt the previously written and scheduled content to meet you where you're at.
So my dear reader, in this trying time know that we are here thinking about you, praying for your safety, and working hard to serve you just as we always have. Do not assume that just because we are talking about silly stuff like the stock market or budgets that we do not know there are more important things in life. Hopefully, you will find the information we provide in coming weeks to be useful in your life (or at least a healthy distraction.)
What do you think? Is it appropriate for bloggers and podcasters to talk about anything but the pandemic right now? Should they quit publishing at all? What would you like to see/hear on the blog/podcast in the coming weeks? Comment below!
Thank you so much for being on the front lines of this. An ED colleague just diagnosed the first COVID-19 case at one of our area hospitals with a presentation that many without the right detail or two may have seen as consistent with a CHF exacerbation. That high index of suspicion and appropriate isolation from the beginning prevented exposing many of our staff. I’ve been following this blog from the beginning and will continue to do so even if you never write a thing about COVID-19. I’ve got plenty of places to read about COVID-19 – I’ll take the 10 minute distraction here every now and then. Thank you for all that you do.
Keep up the good work! Enjoyed the WCI conference. I hope you can keep the wonderful blog posts coming. Prayers and good wishes for you and all the docs, nurses and staff to stay healthy and safe. I made many new friends at the WCI conference and I want everyone to come through this pandemic.
I’m not sure if he has done it yet, or if you have considered, but hearing a new post from POF about sequence of returns, his decision to retire right before a major market crash and whether or not he will return to ventilating people if needed. This would be a well timed post. It would be not only financial, but also COVID related. I for one would be very interested to hear his voice along with yours as to what you are experiencing from an economical standpoint due to this strain. I may send you a guest post based on the 2 small businesses I own. Depends on how much time I have this weekend.
Thanks,
I’ve talked to him about it and he certainly has no plans to return to practice. Bear in mind his website income covers all of his expenses plus, so he isn’t even using that substantial portfolio of his. I’m sure he’ll address it in an upcoming post.
Small businesses, including this one, are being hammered, so I think your post would be well received.
Thank you for your timely post. I understand how busy you have probably been the past few weeks planning for the conference in addition to your remodel. I banned social media several months ago because it is an unnecessary distraction so I appreciate the time you took to write this post. It was nice to hear -stay the course, follow your plan, tax loss harvest. Thanks for being a trusted voice and financial leader. I’m thankful I heard about your site/podcast a couple of years ago. It has saved my THOUSANDS upon THOUSANDS of dollars in AUM fees.
You’re welcome.
Great post. I have come to the site for a distraction from the chaos around us. I think this was well said and was helpful to address the elephant in the room. I think the positive that will come from this will be a reminder for society as a whole as to what is really important and really what matters (God, family, friends, have a sound financial plan, etc). This will be different for everyone, but it certainly isn’t the new car or fancy clothes. Stay safe everyone!
Via email:
Thank YOU!
It is imperative to keep our bodies healthy in order to continue to treat patients but as important is keeping our minds sane. For some, it means sitting down and reading a quick non coronavirus related email after being bombarded with coronavirus related news that seem to be coming out of numerous sources impossible to keep up with. While dealing with in person PPE shortage, staff shortage, slow test results turn around time, we have so much to deal with. The level of anxiety that one may not notice is there after hours, days, weeks of non stop coverage.
Keep the blogs & podcasts coming !
via email:
The criticism that you shouldn’t be posting is the most absurd criticism I’ve heard of your site yet… I’m sorry you lost the time it took to respond to that. You’ll never please morons.
We’re all facing difficult, unprecedented circumstances that we are not sure what is the best way to react to. Not sure that necessarily makes anyone a moron just because their opinion differs from mine. I’ve heard back from several bloggers who felt like they couldn’t post until they read this post and it allowed them to get back to work.
via email:
This may be the most human and sincere email I have yet to receive about a business response to covid19. Thank you for your efforts, and your news break:)
Really appreciate your honesty. Keep doing what you’re doing. It’s during times like these that your work here on The White Coat Investor is most important. You have made a real difference in my family’s financial future and I will be forever grateful.
Thank you for all you do, Dr. Dahle. I have learnt a lot from your blogging and feel comfortable in my financial plan.
Pertaining to COVID-19 and trying not to get lost in the rapidly evolving literature, I found the following podcast by IBCC (by Dr. Josh Farkas, a PCCM attending at University of Vermont) very helpful:
https://emcrit.org/pulmcrit/covid19/
Thank you again for all your hard work! Stay safe while you continue to work in the ER.
Recently started as an attending, big fan of your work. I have some limited medical school debt with goal of PSLF, on track so far, and a house also on track, cars paid off. Otherwise I have been pouring my extra money into index fund at Vanguard, happy with the returns, until now.
I’m planning to just keep the money in there and sit tight, dollar cost average as I have been and not freak out… It’s tough! Any words of encouragement for someone in their first recession? Thank you.
When do you plan to spend that money?
Do you really think it will have a negative return between now and then?
If not, then why wouldn’t you stay the course?
Yes, stay the course. This too shall pass. In the next bear market you’ll be telling these stories about the Coronabear and how stocks dropped almost 40% in the first three weeks of the bear and this is nothing.
https://www.whitecoatinvestor.com/stay-the-course/
I agree with this post wholeheartedly. #3 is certainly true. Much more downtime as we await the expected storm. There are plenty of places to get Coronavirus information. I come to WCI for a break
Please keep doing what you normally do! Your work has made a tremendous difference in my family’s financial future.
Thank you!
We need you now more than ever WCI! Please keep on keeping on, and thank you for everything you do.
love this site, learned most of the finincial stuff through here!
with this is your recommendation still to buy the vanguard total market fund and index fund although there is a risk of large corporations going bankrupt (like any recession) or should we wait
I have been saving money for the next bear market to come and it is here,
do you have any recommendations of stock/bond ratio for different investor ages?
thank you
I have no idea whether the stock market will go up or down from here in the short term, but I am confident it will go up in the long-term, even if some corporations go bankrupt. Without a crystal ball, I can’t tell you which way the market will go on Monday, but I can tell you I am buying every time I get money.
A common rule of thumb is to hold your age in bonds, but there is substantial variation there.
https://www.whitecoatinvestor.com/determine-ratio-stocks-bonds/
https://www.whitecoatinvestor.com/investing/you-need-an-investing-plan/
I am not a physician/health care worker. I am in hospital administration working closely with health care professionals. I thank you for WCI. I visit often but have never replied. Folks still need help with personal finance more than ever. Keep it up and thank you.
Jim: I think we’re all going to need a break over the next 2-3 weeks as the cases continue to significantly rise in the U.S.
I agree with you that we should have plenty of down time to work on our businesses and educate ourselves financially in the areas we lack in.
I was enjoying your updates on your home remodel as we too are in the middle of a major home remodel that we recently put on hold due to the current situation.
Thanks for risking your life taking care of patients, Stay safe!
We’re four weeks from the end, but if all the workers are forced to stay home we might be 6 months from completion.
Long time WCI reader. (Enjoyed both conferences.)
I come here for financial insight. (Getting plenty of pandemic information elsewhere).
Don’t change what you do. It’s working.
I suspect your content in the coming months may reflect on the financial and business consequences of COVID-19 as it pertains to those of us who wear a white coat or other high net worth individuals, and that would be welcome.
Thank you for doing what you do, Jim!
Thanks WCI. What’s most offensive is all the geniuses on the forum/facebook who keep insisting that covid-19 isn’t an actual problem. Those claiming we are wasting our economy on “septuagenarians”… “It’s just like the flu, no big deal”… That mayors/governors are blowing this out of proportion… Makes you wonder if many in your audience understand medicine or are just worried about their 401ks!
It’s difficult to weigh the health benefits of shutting the economy down against the economic benefits of keeping it open. Reasonable people can disagree on the proper course. Bear in mind there are health risks of economic downturns too such as increased suicide and domestic violence and people dying from strokes and MIs because preventive care isn’t happening.
Thanks for such a wonderful article! I want to share my experience. My company is also involved in assisting with financial planning for all who need it, and with the onset of these difficult times, many people are exposed to the negative news of the crisis, panicking, thus unable to reasonably manage their finances, in what I help them. So people need to calmly accept the situation and look at the current situation, panic is not the way out, rational thinking is very important now, so before making hasty conclusions, one must evaluate the situation carefully. Have a nice day and take care of yourself!
I’m on the phone, and on hold with myfedloans now trying to figure out what they’re doing with my direct loans. Overnight on the website it now says my interest rate has come down to zero, but I’m in “pay ahead” status and next month’s payment is $400 more than I usually pay. I’m hoping all this means is not paying interest for a few months, (still paying the same amount though) and having those payments count toward PSLF. Have you or your colleagues found any further answers? The confusing part is that I think April is the month that my monthly amount changes due to yearly reapplication, but my income has not changed. Hoping that you stay as safe as possible out there in the madness. – Jen
Update – they did say that for folks doing PSLF, the monthly payments should not change, and you can call and change the pay ahead status (my monthly amount was actually less than the calculated payment – I was just panic dyslexic reading). The amount being taken out of my direct debit does not change. So at the end of the day my payment will count toward the principal “for the indefinite future”, and continue to count toward PSLF payments.
Staying the course and continuing to dollar cost average in the Covid19 bear market makes sense and is what I’m advising my 30-something kids and nephews to do. I’m not sure that makes sense for the early-retirement person at the precipice of a sequence of returns disaster. Fortunately I am only 40% in equities and for a variety of reasons I will not have to liquidate equities until RMDs kick in for me in 4 years. I do have the concern that 1. The economic disruption will be worse than the Great Depression and 2. The current market and CARES response assume a 1-2 month disruption, where it will likely be a 1-2 year disruption and 3. the best I can hope for is to get back to is a fraction of what my assets were in February. Should I “stop playing when you’ve won the game” and go to 10% equities now to avoid further losses from which I will likely not recover?
What’s the alternative, sell low? I don’t understand why even someone who just retired in February can’t just live on his or her bonds for the next 10 or 15 years while waiting for a market recovery. Certainly it should be easy to weather this sequence of returns with a 40/60 portfolio.
While my crystal ball is cloudy, you seem VERY pessimistic, overly so in my opinion. I disagree that you are unlikely to recover your the equity losses on a mere 40% of your portfolio over your substantial investing career still ahead of you. What are you down at this point overall, 10%?