By Dr. James M. Dahle, WCI Founder

Long-term readers know I frequently say there are five money activities in your life and that you should strive to be excellent at all of them. In this post, I'll go more into depth about each of them and help you understand what you are the best at and where you could use a little work. The activities are:

  1. Earning
  2. Saving
  3. Investing
  4. Spending
  5. Giving

For each of these activities, we'll talk about what being good at it looks like and why it matters.


#1 Earning

Most of the time, earning money is a noble activity. It means you are producing a good or service that is seen as valuable by other people. You are improving their life by trading that good or service for their money. When you earn money well, you are happy, you are helping others, and you are raking in the cash. There are A LOT of people in this world who suck at earning money. They hate their job. They perform poorly, leaving employers and customers wanting. They are not getting paid what they're worth. Their job is a poor match for their abilities and desires. The vast majority of people dramatically overestimate the difficulty of doubling their income. Earning is rarely the most significant problem for readers of this blog, but it is the major financial problem for most in the world.

Rate your earning ability with the following questions:

How much do you enjoy your work?

  • My job is toxic. I don't just hate my boss; I hate my coworkers and customers too [1 point]
  • I'm definitely feeling burnt out [2 points]
  • My job is actually pretty good. They call it work because someone has to pay you to do it [3 points]
  • My job allows me to contribute to the world in the way I am best able to do so [4 points]
  • I would do this even if no one was paying me [5 points]

How much good does your work do?

  • I'm amazed anyone pays us to do what we do. Success stories are few and far between. [1 point]
  • My job is mostly data entry into an electronic medical record. [2 points]
  • It's a mix. Lots of what I do is pointless, but I do help some people. [3 points]
  • Saving lives, stamping out disease, and passing out turkey sammiches. [4 points]
  • It's like Mother Teresa around here. [5 points]

How well are you paid? 

  • I don't actually know what anyone else doing this job makes. [1 point]
  • I'm underpaid. [2 points]
  • I make about average for someone working as hard as I do. [3 points]
  • I work hard and make good money. [4 points]
  • I'm killing it. I can only think of a few people I know doing as well as I'm doing or better. [5 points]

Now, add up your points and give yourself a star rating:

  • 3-5 points: ⭐️
  • 6-7 points: ⭐️⭐️
  • 8-9 points: ⭐️⭐️⭐️
  • 10-11 points: ⭐️⭐️⭐️⭐️
  • 12-15 points: ⭐️⭐️⭐️⭐️⭐️

Not happy with your rating? Here are some things you can do that can improve your earning ability:

pay off student loans quickly
  • Address your burnout on a personal level by reading a book, taking a course, or hiring a coach
  • Push for burnout improving changes at work
  • Hire others to do the work you find less meaningful
  • Change work settings
  • Ask for a raise
  • Interview for another job
  • Inquire about promotions
  • Ask co-workers how much they make
  • Ask other people in your profession how much they make
  • Discuss how higher earners do it
  • Look at a salary survey
  • Improve your coding and billing
  • Learn new skills and develop additional areas of expertise with education and training
  • Make your practice more efficient
  • Put efforts into marketing to increase the number of patients/clients
  • Start a side gig
  • Change professions

More resources and information on Earning can be found here:


#2 Saving

The first two steps to becoming wealthy are to 1) earn a lot of money and 2) carve a big chunk of it out in order to build wealth. If you never save anything, there is nothing left to invest. This step can be surprisingly difficult for many physicians, and primarily because of that difficulty, one-fourth of physicians of retirement age are not millionaires (11%-12% have a net worth under $500,000). Saving is not a difficult concept to understand, but it requires immense discipline and sacrifice to do well. My general recommendation to attending physicians is to save 20% of gross income for retirement (in addition to other savings), but much more than 20% of your earnings should be going toward wealth-building activities (paying off debt, investing) in the first few years out of training as you Live Like a Resident.

Rate your savings ability with the following questions:

What was your retirement savings rate last year (amount saved for retirement divided by gross income)?

  • I didn't save anything (or I spent more than I earned) [1 point]
  • I probably saved something in the 5%-15% range [2 points]
  • I saved around 20% [3 points]
  • I saved 25%-40% [4 points]
  • I saved >40% [5 points]

Are you on track to reach your financial goals?

  • I don't have any goals or a written investing plan [1 point]
  • I have a plan, but I'm not hitting my goals [2 points]
  • I am on track [3 points]
  • I am ahead of where I should be [4 points]
  • I have already reached all of my financial goals [5 points]

How difficult is it for you to save?

  • My partner and I fight about how much one of us spends all the time [1 point]
  • I am a natural spender, but I manage [2 points]
  • I worry about running out of money in retirement [3 points]
  • I'm actually pretty good at saving [4 points]
  • The only people I know who are better at saving than me I met through WCI [5 points]

Now, add up your points and give yourself a star rating:

  • 3-5 points: ⭐️
  • 6-7 points: ⭐️⭐️
  • 8-9 points: ⭐️⭐️⭐️
  • 10-11 points: ⭐️⭐️⭐️⭐️
  • 12-15 points: ⭐️⭐️⭐️⭐️⭐️

Not happy with your rating? Try some of the following:

  • Get a written financial plan
  • Budget
  • Stop buying stuff
  • Vacation closer to home
  • Start calculating your savings rate each year
  • Meet with your partner once a month to review spending and progress toward financial goals
  • Cut up credit cards
  • Cancel subscriptions
  • Sell any vehicles you have a payment on and buy something cheaper for cash
  • Pay yourself first
  • Eat out less
  • Delay purchases as much as possible

More resources and information on Saving can be found here:


#3 Investing

People come to The White Coat Investor for investing information, but they realize that working on one or all of the other four activities will help them even more. Investing might be the most complicated of the five activities, but it is also the easiest to master. Effective and sophisticated investing plans can be surprisingly simple.

Rate your investing ability with the following questions:

How much do you know about investing?

  • My money is sitting in cash because I know so little [1 point]
  • I don't even know how my money is invested [2 points]
  • I know just enough to be dangerous [3 points]
  • I can readily identify stupid investing ideas [4 points]
  • I know a lot about investing techniques I would never consider actually using [5 points]

How is your investing discipline?

  • I chase performance and panic sell regularly [1 point]
  • I have done a lot of stupid things in the past, but I'm getting better [2 points]
  • It is hard for me to stay the course when markets tank, but I can usually do it [3 points]
  • I am more tempted to panic sell at market tops than bottoms [4 points]
  • I have a written plan and I follow it religiously [5 points]

How comfortable are you with investing?

  • Managing money is one of my least favorite activities [1 point]
  • I know it is important so I do it, but I have real hobbies [2 points]
  • I have been investing for a long time. I am competent and have a reasonable plan [3 points]
  • I'm a hobbyist. I love this stuff [4 points]
  • I am the go-to resource for most of the doctors I know [5 points]

Now, add up your points and give yourself a star rating:

  • 3-5 points: ⭐️
  • 6-7 points: ⭐️⭐️
  • 8-9 points: ⭐️⭐️⭐️
  • 10-11 points: ⭐️⭐️⭐️⭐️
  • 12-15 points: ⭐️⭐️⭐️⭐️⭐️

Not happy with your rating? Try some of the following:

  • Read some books
  • Take an online course
  • Read the plan documents from your employer-provided retirement plans
  • Go over your plan with your financial advisor
  • Subscribe to the WCI blog or podcast

More resources and information on Investing can be found here:


#4 Spending

You might not have expected to see this one on the list. Spending money well can be surprisingly difficult. When you spend well, it means you spend your money on the things that make you happy rather than wasting it on stuff you end up not using and just have to store. It means not buying experiences and instead purchasing services that you don't enjoy and that didn't help you. It means not overpaying. It means not feeling guilty about using some of your money on you and yours. The data from the happiness literature is very clear that the spending that brings us the most happiness is spending on shared experiences with people we care about.

Rate your spending ability with the following questions:

Are you spending on what you care about most?

  • I really don't know where my money goes [1 point]
  • I waste money all the time on stuff that really doesn't help me [2 points]
  • We budget, but we're not very good at it [3 points]
  • We pay ourselves first and then spend what's left without guilt [4 points]
  • We intentionally plan out our spending and follow that plan [5 points]

How well do you research your purchases?

five money activities

  • I almost always buy on a whim with little or no research [1 point]
  • I think about my purchases in advance, but I have no patience to really compare or research options [2 points]
  • I am ridiculously meticulous about how I research and try to find the very best deals [3 points]
  • I will read a review or two and check at least two places before buying something [4 points]
  • I methodically plan and research my purchases in a logical manner. I spend a lot of time researching large purchases but don't waste time driving across town to save a few bucks on minor purchases [5 points]

How do you feel before and after spending?

  • Spending is not just hard for me; it's emotionally painful [1 point]
  • I'm a natural saver, but I manage to spend appropriately [2 points]
  • Spending money really does not affect me emotionally [3 points]
  • I rarely regret a purchase [4 points]
  • The way I spend money actually increases my joy; I never feel regret about it [5 points]

Now, add up your points and give yourself a star rating:

  • 3-5 points: ⭐️
  • 6-7 points: ⭐️⭐️
  • 8-9 points: ⭐️⭐️⭐️
  • 10-11 points: ⭐️⭐️⭐️⭐️
  • 12-15 points: ⭐️⭐️⭐️⭐️⭐️

Not happy with your rating? Try some of the following:

  • Get a spending plan (budget) in place
  • Force spending. Set an amount each month that if you do not spend must be given to your favorite (or perhaps least favorite) charity
  • Cut up the credit cards if you spend too much
  • Use credit cards if spending is painful
  • Have a spouse or partner do most of the purchasing if spending is painful
  • Practice buying things that you don't absolutely need but that would make your life easier and more fun
  • Buy some of your time back—house cleaners, lawn care, snow removal, tax preparer, nanny, chef, travel agent, etc.

More resources and information on Spending can be found here:


#5 Giving

Giving money well can be just as hard as earning it, saving it, investing it, and spending it. It can be hard to have enough excess that you can give some away. Then, you actually have to physically do it. Just like you have to hold back spending in order to save, you also have to hold back in order to give away a significant amount of money. Then, there is the process of determining who, how much, and how to give money to individuals without hurting them. Charities also have to be evaluated for efficiency and effectiveness. In some ways, giving well is the hardest of the five money activities.

Rate your giving ability with the following questions:

How much of your income do you give each year?

  • I don't really give anything—trivial amounts at best [1 point]
  • I plan to give later when I have more money or when I die [2 points]
  • I regularly give at 1% or more of my income [3 points]
  • I give around 10% of my income [4 points]
  • I give significantly more than 10% of my income [5 points]

How well do you evaluate charities before donating?

  • If it seems like a good cause, I give [1 point]
  • I ask others who they give to and why [2 points]
  • Sometimes I investigate a charity myself before giving [3 points]
  • I always look up a charity on at least two rating websites before giving [4 points]
  • I have a systematic, written giving plan with a mission statement. I ensure a charity is efficient, effective, and the best charity for my chosen cause before I give a cent to them [5 points]

How often do you look for opportunities to help others with your money?

  • I can't remember the last time I gave to someone that wasn't my kid [1 point]
  • I do give sometimes, but I don't think about it a lot [2 points]
  • I give every year [3 points]
  • I inspire others to give; I am considered generous by others [4 points]
  • I am constantly thinking about ways to use my money to improve the world [5 points]

Now, add up your points and give yourself a star rating:

  • 3-5 points: ⭐️
  • 6-7 points: ⭐️⭐️
  • 8-9 points: ⭐️⭐️⭐️
  • 10-11 points: ⭐️⭐️⭐️⭐️
  • 12-15 points: ⭐️⭐️⭐️⭐️⭐️

Not happy with your rating? Try some of the following:

  • Add a “giving” category to your budget
  • Write down the most important charitable causes to you
  • Become familiar with the strengths and weaknesses of the various charity rating websites
  • Pick five charities and give something to each of them, even if it is only $10
  • Go to an underdeveloped country and spend more time there than it takes to do the usual tourist activities
  • Endow a scholarship at your alma mater
  • Double what you donate to your religious institution
  • Calculate your giving rate (the amount you gave divided by gross income)
  • Including charitable causes in your will and/or trust

More resources and information on Giving can be found here:


How did you do overall? My report card looks like this:

  • Earning: ⭐️⭐️⭐️⭐️⭐️
  • Saving: ⭐️⭐️⭐️⭐️⭐️
  • Investing: ⭐️⭐️⭐️⭐️⭐️
  • Spending: ⭐️ (Don't laugh; I almost got two stars)
  • Giving: ⭐️⭐️⭐️⭐️⭐️

Look at the areas where you scored the lowest and resolve to get a little better at them. I promise it'll improve your life. While my one star on spending doesn't look very good, I'm a couple of points better than I was a few years ago. I'm hoping I'll make it to two or even three stars soon.

What do you think? What does your report card look like? What are you doing to work on your money weaknesses? Comment below!