By Dr. James M. Dahle, WCI Founder

I get plenty of resistance and pushback from docs because of what I teach about personal finance and investment, whether it's driving Teslas, buying whole life insurance, speculating in crypto, or timing the market.

However, the one that always surprises me the most is the reaction of some to four simple words:


Live Like a Resident


Take a look at a recent thread on Facebook. And no, not in some random Facebook thread. This is in The White Coat Investors Facebook Group. Check it out:


Now, that thread was a lot of fun. A lot of people were just joking around. Some actually tried to give serious answers to what probably wasn't a very serious question. But there were enough in there to demonstrate the very real pushback I see that it's worth talking about.


Live Like a Resident Is Temporary

First, let's discuss just for a minute what I'm talking about when I say live like a resident. I'm saying the most reliable path for physicians to pay off their debt and build wealth is to live like a resident for 2-5 years after finishing training. It works every single time. It is highly reliable. The greatest wealth-building tool for  physicians is their income, and living like a resident unlocks that income so that it can be used to build wealth instead of funding consumption.

If you spend $50,000 on your lifestyle and earn $250,000 gross, you should have something like $150,000 to put toward building wealth each year, whether that is paying off debt, maxing out retirement accounts, buying real estate, speculating on the latest meme stock, or saving up a down payment. That's more than $12,000 a month. All while enjoying the average American household income.

However, note what I said, especially the part about 2-5 years. Not 10. Not 20. Not an entire career. If you're in a pretty good place financially, two years is plenty. If you're in a bad way, five years is still plenty. We're talking about your 30s (your 20s are already gone), not your 40s, 50s, 60s, 70s, or 80s. Once the live-like-a-resident period is over, your schooling should be paid for. That means 20% of your gross income should go toward retirement and YOU SHOULD SPEND THE REST on whatever makes you happy. Maybe some of it goes to college savings or charity or whatever, but you can have a pretty nice life on 80% of a physician's income.

More information here:

When Is It OK to Start ‘Enjoying’ Your Money?


Live Like a Resident IS the Answer

What too many critics don't understand is that living like a resident is the answer to many of the most important financial questions that doctors have.

Q. A pre-med student asks, “Does it still make financial sense to go to medical school and become a doctor?”

A. Yes, if you will live like a resident for 2-5 years after residency, you can easily pay off those student loans.

Q. A medical student asks, “Can I go into preventive medicine and still pay off my $300,000 debt?”

A. Yes, if you will live like a resident (or go for PSLF).

Q. A new attending discovers they hate medicine and asks, “How can I retire as early as possible?

A. Live like a resident.

Q. A senior resident realizes she wants to start a family and wants to cut back for a few years to raise the children. How can she make that work financially given her student loan burden?

A. Live like a resident.

Q. A new attending wants to know how he can max out his retirement accounts and pay off his student loans at the same time.

A. Live like a resident.

Q. A new doc wants to build a real estate empire and become massively wealthy but wonders, “Where can I get the cash to get started?”

A. Live like a resident.

Q. A tech-savvy doc sees crypto assets as the wave of the future and wants to get involved now. How can they get a meaningful amount invested ASAP?

A. Live like a resident.

Q. A dentist wants to move from being an associate to owning their own practice. How can they get the cash to pay for it?

A. Live like a resident.

living like a resident

Q. A senior resident dreams of driving a Lamborghini Aventador. What is the smartest way for them to get one within five years?

A. Live like a resident.

Q. A graduating doctor already has three kids and she doesn't want them to have the same student loan burden she had. How can she save up enough for them before they're 18 to go to Ivy League undergraduate schools and professional schools?

A. Live like a resident.

It doesn't matter how you want to invest or what your pathway to wealth will be. Whether it is index funds, entrepreneurship, real estate, or speculation, having a bunch of extra cash from living like a resident will facilitate it.


Nobody Actually Lives Like a Resident

I'm going to let you in on a little secret. Ready? Here it is. Nobody actually lives like a resident. Katie and I didn't even live like a resident. It's a principle, not an exact prescription. Most financially savvy docs give themselves a little raise. Heck, give yourself a 50% raise. That would be huge in corporate America. Go ahead. Live on $75,o00 instead of $50,000 for a few years. It'll still work for all but those with the very highest debt-to-income ratios.

More information here:

From Fourth Year to the Real World


You Can Do What You Want

Now, we get to where the rubber hits the road. You're going to stop reading, and you'll have to make some decisions. If you live like a resident or if you don't, it's not going to impact me one bit. I really don't care what you do.

If you make the sacrifice, you will reap the reward. If you don't, you won't. It's really that simple. The decision is yours. But if you choose to grow into your attending income instantaneously and then find yourself at mid-career working 1.5 FTEs and feeling burnt out with two big mortgages and two big car payments hanging over your head and still owing six figures in student loans, don't come crying to me. Choices and consequences. They're two ends of the same stick. When you pick up one end, you're going to get what is on the other end. There's just no way around it.

As for my family, we chose to live like a resident (or close enough to it), and it made all the difference. We became millionaires seven years out of residency (on an average income of $180,000), and we had massive financial freedom in our 40s that will allow us to live our ideal lives for the next 50ish years.

Now, it's your call. What are you going to do?

What do you think? Why do so many people think wealth-building requires endless sacrifice and never being able to enjoy the fruits of your labor? Why do so few people realize that the “Live Like a Resident” period is supposed to be temporary? Comment below!