By Dr. James M. Dahle, WCI Founder
I wrote another book. As is tradition here at The White Coat Investor, our announcement of the book will be in the form of a review. Is it fair to let the author review his own book? Of course not. But it's my book and my blog so I get to do what I want! But yes, I'm obviously biased. Not only do I think it's a good book, I think you should buy a copy for yourself and all your friends. The fun part about an author doing his own review is that it gives you additional insight into the book you might not get from another reviewer—or even from reading the book itself. The book is called The White Coat Investor's Guide to Asset Protection and subtitled How to Protect Your Life Savings from Frivolous Lawsuits and Runaway Judgments.
Why Asset Protection?
There are a plethora of subjects that I could have written a book about. Why did I write THIS book? Why asset protection? Well, when I first started The White Coat Investor, I thought asset protection was a subject that I would be writing about all the time. It was one of only five or six categories on the blog. However, the more I looked into it, the less I worried and the less I thought about it. I realized the likelihood of an above policy limits judgment was extraordinarily low and that even if there was a massive above policy limits judgment that forced me into bankruptcy, almost all of the assets I had at that time (retirement accounts) would be retained. It turned out I only ended up blogging about asset protection once a year or so.
So, what changed? Basically, I got richer. As I acquired assets, the ratio of protected assets to unprotected assets fell and fell and fell. Now, the majority of my wealth was exposed to an above policy limits judgment. As I became financially independent and medicine went from the way I put food on the table to a well-paid hobby, I started thinking about peers and colleagues I knew who left medicine at financial independence in large part because of the fear of above policy limits judgments. As much as they loved practicing medicine, they were not willing to jeopardize their family's well-being and their financial independence to do it.
While I didn't want to lose everything I've worked so hard for, I also didn't want to stop practicing medicine. It was time to look into asset protection a little more carefully and see if there were some things I could do to further lower that risk for me personally. This book grew out of the additional research into the topic. Now you too can profit from my anxiety. It also serves as an excellent reference for me. As I will explain later, it includes the most comprehensive listing of state asset protection laws that I am aware of.
The book was originally going to be a relatively short e-book, but as it grew and grew (and didn't lend itself very well to the graphics that e-books are most known for), we elected to make it into a regular book and add it to The White Coat Investor series. Unlike the other books in the series, this book is not aimed at a relatively young, relatively poor audience. While those docs can certainly benefit from the information in this book, the book is aimed at mid-career to late-career docs who have already built some wealth, i.e., those who have something to lose. If this is you, I suggest you pick up a copy.
Most books on the subject of asset protection are written by lawyers, not doctors. They serve to establish the author as an expert in their field and to recruit new clients to whom they can sell trusts and other expensive and complex asset protection entities. To be effective, they tend to use a tone of alarm, and the client finishes the book terrified that if they do not hire the author, they will lose everything to their next patient. I knew that wasn't true.
I've known for years that very few doctors lose any personal assets at all to a malpractice lawsuit. But that number is not zero. I simply wanted readers of the book to have a realistic view of their risks so they could make proper decisions about what to do about them. Then, I explained the simple, cheap, and effective steps that they could take. In addition, I went through all of the complex and expensive techniques and discussed when they should be considered. Most importantly, I recognized that asset protection law is state-specific and that any approach that is not state-specific is completely inadequate. So, a large portion of the book is dedicated to a listing of all the state-specific asset protection laws.
What's in the Book?
Let's walk through the table of contents.
There's a foreword by attorney and WCI conference speaker Jay Adkisson, Esq. You can hear what he said about the book at the conference this year:
This is followed by an introduction, and then we move into the first chapter: Anatomy of a Lawsuit. Many doctors have no idea what it is like to go through a lawsuit. This walks you through, step by step, a process that may last for years. You also learn exactly how likely it is for you to get sued (very likely) and how likely it is to actually lose personal assets (not nearly as likely).
Next is a chapter on Reducing Risk. Perhaps the best asset protection technique is to never get sued at all. There are lots of liabilities you can't get away from in life; you might as well get rid of some of the ones that you can. I guarantee you won't want to take all of the “recommended” steps in this chapter.
Then, the book goes through some of the broad, overarching Principles of Asset Protection. How valuable is it for you to try to hide your assets? Why does asset protection have to be done in advance? Who are the worst creditors to owe money to? The following chapter talks about insurance, your first line of defense. It's super boring, but it's perhaps the most important chapter in the book. When I figure out how to make insurance interesting, I'll be a best-selling author. One of the more important parts of this chapter is where I explain what malpractice insurance covers and also the work-related risks that it does NOT cover.
Following this are two lengthy chapters that make up a large portion of the book. The first is on Cheap, Easy, and Effective Asset Protection Techniques. The second is on Expensive, Complex, or Uncertain Asset Protection Strategies. If there is an asset protection technique that a doctor has used or one that has been pitched to doctors and it is not in one of those two chapters, I don't know what it is. Learn them all, and then decide what you want to use.
The next chapter is the longest and perhaps the most important in the book, even if I guarantee you won't read most of it. It includes the most comprehensive list of state asset protection laws that I know of. This list alone is worth the price of admission. Be sure to read about the states where you live, where you have business dealings or property, and where you might consider relocating.
Once you know about your state's laws, I give Practical Advice on Asset Allocation. There are all these things you can do. But you shouldn't necessarily do most of them. So, which ones do you do? I even walk you through several case studies of doctors in various situations in various states to demonstrate how you might formulate an asset protection plan. There are additional resources and a glossary at the end, and as usual, I pass out my email address and invite readers to email me comments and questions.
There are 216, nine-inch pages in the book. You could knock it out easily in four hours or so, but if you'll put it on your bedstand, I bet you could string it out to put you to sleep for about three weeks in a row.
What Are the Strengths of the Book?
One of the strengths of the book is that it is unbiased. I have nothing to sell you as far as asset protection goes. Well, aside from the book itself. So, I can tell it like it really is. Compared to most books out there on the subject, this is a big deal. Another strength is that it is written by a doctor in terms that you either already understand or that are clearly explained. Finally, that chapter on the state-specific laws is pure gold and is a major strength.
What Are the Weaknesses of the Book?
The most obvious weakness of the book is that it is not written by an attorney, much less one who specializes in creditor-debtor law. However, the truth is most of those out there selling asset protection services don't specialize in creditor-debtor law either; they specialize in estate planning with a dollop of asset protection on the side. But then again, I've never had to defend or prosecute a particular asset protection strategy in court. If you want personal experiences giving details about all of the court cases that occurred when an asset protection strategy met the court system, this isn't the book for you.
We've also already gotten our first negative review of the book:
“I love my daddy with all my heart but his books are boring. They don’t have any pictures.” —Afton, age 6, when asked if she wanted daddy's book that had just arrived in the mail for her bedtime story.
Why Should You Get the Book?
You should get the book to learn everything you need to know about asset protection and also to keep it as a reference, particularly the chapter on state-specific laws. While these will change occasionally in the future, the list of laws includes references to the actual statutes, so you can quickly google your state's laws in the code to see if they have changed. This is not the first book on physician finance that you should buy, but if you've read a bunch of the books and they're all starting to sound the same, I guarantee this one will be different. It is in-depth and focused, and while it is understandable to a beginner, it is really designed for the mid- to late-career doctor who already has some wealth and perhaps has some concerns about protecting it. Heck, I'm using it for a reference to answer reader questions and I wrote it!
How Can You Get the Book?
Like all WCI products, you can buy it at the WCI store. Pick up some stickers, T-shirts, or other merch while you're there. If you want to buy 25+ copies, we have a bulk discount where they cost $18.99 apiece plus shipping. Email [email protected] to get that. Otherwise, you can simply buy it off Amazon. The cover price is $29.99 for the print version and $24.99 for the Kindle version, but as you know, Amazon will often sell it for a few dollars less.
Have you read the book? Did you like it? Was it worth the investment? What was your favorite part? Do you have any questions about it? Comment below!