Contract Diagnostics BannerDear Reader,

I started this blog and website in May 2011 with the primary purpose of “helping those who wear the white coat get a fair shake on Wall Street.” Like many of you, I had received less than a square deal from several different types of financial professionals, including a realtor, a mortgage lender, an insurance agent, a financial advisor, an appraiser, and even a military recruiter. Part of the reason for my pitfalls was my own lack of financial knowledge, but that was significantly compounded by a lack of disclosure/transparency by the professionals. As such, with this website I strive to be fully transparent with regards to the sources of my income, and that’s the main purpose of this annual post. If you’re curious, you can find the 2012, 2013, and 2014 State of the Blog posts with these links.

Thank You

However, aside from the important disclosures (which also provide a bit of a voyeuristic look into my business- my new business manager says she is very interested in seeing the comments to this post), this is also a fantastic opportunity to talk about the mission of The White Coat Investor, LLC, and to thank you, dear reader, for your assistance in fulfilling it. The primary purpose of this business is to provide high-income professionals the information and education they need to optimize their financial lives and allow them to focus on their own families and practices.  By any measure, we have seen smashing success in this regard this year.

This site now consists of 51 pages and 630 posts, 172 of which I published in 2014. There are over 13,024 comments on the blog (not counting tens of thousands of spam comments) of which over 7000 are from 2014. I have received about 9000 emails and responded to every one of them that came from a reader (not sure exactly how many, but it’s at least 1500).

WCICoverfor SDNI published my first book, The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing, in February and it has been successful beyond my wildest dreams. 9559 copies were sold in 2014. It has received 222 reviews on Amazon, 90% of which were five star reviews, 7% of which were four star reviews and 3% of which were presumably written by whole life salesmen. The biggest criticism of the book is that “most of this stuff is available for free on the blog.” I can live with that. The book is still ranked #2, #2, and # 3 in its Amazon/Kindle categories, ahead of many books by authors that I greatly respect. More importantly, it has enabled me to reach an entirely new segment of readers who would not have received the important message of The White Coat Investor from the website alone.

The number of RSS readers has increased from 1477 to 2286 and the number of newsletter subscribers has increased from 1353 to 3339. Another 65,573 unique readers visit the site each month, providing a total of 242,332 page views. In the last 3 1/2 years, over 1.2 Million unique visitors have visited the blog, for a total of 5.2 Million page views. Although many of these visitors simply came from a search engine (found the site themselves) many more came as a direct result of word of mouth. If this site has helped you, and because of that you have shared it with colleagues, friends, and families, I thank you on their behalf.

The site is also listed on this list of Top Finance Blogs. Our initial position is 113 (out of 454), but if ranked purely by traffic to the site, it would be ranked 23rd. I guess I better spend more time on Facebook.

A Second Purpose of the Site

DRB_141201_bn_AR2_c_MedStudLoan_250x250[5]More and more each month, I have readers, both new and long-term, asking me for referrals to financial service providers who will treat them right. This was not something I anticipated when I first started the site (especially with all the negative things I say about financial service providers), but it has become a bigger and bigger part of what I do. While many readers are die-hard do-it-yourselfers like I am, most, especially occasional readers, are not. Many of those want a regular financial planner or asset manager, and even if an ongoing advisory relationship isn’t needed or desired, all of us have an occasional need for a mortgage lender, a student loan refinancer, a contract negotiator/reviewer, an insurance agent, a tax adviser, a practice retirement plan advisor etc.

So I see a second mission of this site to connect doctors and other high-income professionals with “the good guys” in the financial services industry. Of course, this also has the added benefit of being able to sell advertisements to “the good guys.” Although it is impossible to completely vet any of these firms, I do the best I can, and if we receive significant complaints about them, we don’t renew their contracts. So please continue to send me feedback, both good and bad, about advertisers. Thank you for supporting those who support this site. It helps you get a “fair shake on Wall Street,” it helps me earn an income, it helps the “good guys” to be successful, and it helps future high-income professionals get the same “fair shake” you received.

In order to make it easier to find these recommended professionals, you will notice a new tab at the top of the site, labeled recommendations. This includes not only the recommended book page and websites page, but also lists insurance agents, financial advisors, mortgage lenders, refinancing companies and other professionals.  We will continue to add to the lists as we see needs and find resources to fill those needs.

Feeding My Entrepreneurial Spirit

The third purpose of this site is to feed my entrepreneurial spirit. When I first started the site, I had hoped to provide a passive source of income for myself. While I have managed to provide a surprisingly good income, it has been anything but passive. In fact, much of the income I have seen this year is really payment for work I did during the first 2 years (when I made nearly nothing.) As the site’s income goes up, it also becomes a more valuable asset that I may even be able to sell someday.


I find it interesting to learn about and experiment with all the various ways to make money on the internet and really get under the hood to see how both the internet and business in general really work. However, I confess that there have been several times this year, especially during the summer when life gets really busy, that I thought about just dropping it all. I’ve laid aside a couple of hobbies I enjoy in order to keep up with the needs of the The White Coat Investor, LLC and its readers. Sometimes, frankly, it is a lot more fun to go play than to write, keep up with the comments and emails, argue with random insurance agents commenting on articles published years ago, or read and edit the numerous guest posts I have submitted each month.

So what keeps me going when the primary mission of the site (to help readers) isn’t cutting it? Two things- first, the money is nice and second, I’ve made a commitment to advertisers to keep going, at least until the term of their ad is up! Perhaps it would be better if I were a saint and willing to put in all this time and effort for free, but frankly, I’m not. Just as most of you don’t practice medicine (or law, or whatever) for free, I also don’t run this site for free and would have quit after a year or two if it wasn’t generating any income.

Starting this Fall, I have another contract that helps keep me going. As of September, I have a business manager, Cindy, who is doing a lot to free up some of my time. She has been managing the advertisements and other money-making aspects of the site and also helping with final preparation and publication of the posts. While I suppose I’ve been doing this in my practice for a long time, it’s really fun to know that my work is not only supporting my family, but also providing income for another family. Entrepreneurs create jobs, and I think that’s pretty cool. I hope there will be more opportunities to hire others, spread the workload, and accomplish more moving forward.

Financial Disclosure

Now, the part you’ve all been waiting for- what did WCI earn in 2014 on this crazy project? First, and most importantly, we’ll discuss where my income comes from. This blog has been for-profit from the very beginning, and I make no apologies for it. No margin, no mission.

Income

  • Ad-Serving (Primarily Google Adsense) – $6,727.72
  • Affiliate agreements (Primarily Amazon and SoFi)- $12,945.28
  • Donations- $30
  • Writing and speaking Fees- $14,081.92
  • Book Royalties- $83,587.07
  • Privately Placed Ads- $66,801

Total Income 2014- $187,862.99

Aside from the monetary income, I also received a T shirt, a dozen books (many of which I sent on to readers at my own expense), and hundreds of dollars worth of amazon gift certificates I received when a bunch of you signed up for QuantiaMD after I did some presentations there, and listed me as the referring source (thanks for that by the way, it was totally unexpected.)


This is the part where I thank the advertisers for trusting me with their limited advertising dollars, and you, readers, both for providing the eyeballs I sell to the advertisers, and also for purchasing the book for yourself and those you care about. As you can see, that’s where the lion’s share of WCI income comes from. Thank you.

Financial Conflicts of Interest

Of course, the point of revealing the sources of my income is to provide disclosure to you of my financial conflicts of interest. While I try not to let these affect the content of the site, I’m sure there is some small, perhaps even subconscious, effect in how I write, what I write, and what is published. Most conflicts of interest come from my relationships with private ad purchasers. My financial conflicts of interest might encourage you to do the following:

  1. Buy a house when you shouldn’t
  2. Use a mortgage with less than 20% down when you shouldn’t
  3. Get your contract evaluated when it may not matter
  4. Pay a financial advisor for advice you may not need
  5. Buy disability or life insurance you may not need
  6. Buy my book when you may not need it
  7. Buy other books you may not need
  8. Refinance your student loans when you may be better off not doing so

I can live with all of those and I bet you can too.

The redneck water slide at the WCI Retreat at Lake Powell

The redneck water slide at the WCI Retreat at Lake Powell

Expenses

Of course, any business also comes with significant expenses, although an internet-based business run out of your home minimizes these pretty well. These include:

  • Book related expenses
  • Travel expenses
  • Website related expenses
  • Paypal fees
  • Business and tax fees
  • Business Manager fees
  • Cell phone and internet fees
  • WCI Retreat expenses

I doubt you all care about the individual costs of these, since they don’t involve any conflicts of interest, and I don’t really feel like itemizing them all, but they totaled $17,381.37.

So our profit for 2014 was $170,481.62. I almost feel a little guilty telling the residents, military docs, many of the non-physician professionals, and some of the primary care docs out there that I made more on my website than they did in their practice. Such is the strange economic landscape in which we find ourselves- Society doesn’t always pay based on the true value of the work performed, but rather purely on the economic value. But I really don’t feel that guilty. Many of you have asked  how much time I spend on WCI-related activities. The truth is that many weeks during the year I spend more time on WCI than I do at the hospital. I suppose it’s okay to be paid for that time (I assure you my hourly rate for WCI time is far lower than hospital time.) Some of that, of course, is time taken away from the family so it’s nice to at least be able to have a little more income to show for that sacrifice. And, of course, all that income (at least the portion not going into the WCI Individual 401(k)) or donated to charity,) is taxed at a well-paid physician’s marginal tax rate.

What’s Coming in 2015


As you can see, one of the best things I did in 2014, both to fulfill the main mission of WCI and to boost its income, was to write a book, I hope to repeat the feat in 2015. However, I had hoped to really get started back in November, and here it is January already and I haven’t made much progress. I’m probably going to have to either cut back on my shift load or on my vacation schedule to actually get it done, and neither of those seem particularly appealing at the moment! More details to come.

We are also going to start a WCI Scholarship for a medical or other professional student. We see it as a great way to “pay forward” some of the success that we have seen. Besides, today’s students need all the help they can get. We hope to involve readers and advertisers in helping me to fund the scholarship, and a committee of readers in choosing the recipient. I think this will be a lot of fun. More details to come.

Aside from that, I anticipate continuing to publish 3 posts a week, including a guest post most weeks, and continuing to respond directly to readers as best I can via comments, emails, and the various forums I participate in. Although the latter activity is the biggest unreimbursed time-suck I have, it is also one of the parts I enjoy the most about this crazy adventure. Unfortunately, I am often forced to choose between doing an activity that benefits “the masses” a little bit at a time and one that benefits an individual’s personal situation a great deal.

I will also continue to write for other publications and travel for speaking engagements from time to time. Speaking engagements already scheduled or in the process of being lined up for this year are in Bend, San Francisco, Salt Lake City, Boise, and Tucson, and that’s just the first four months. I had hoped to limit those to about one per quarter, so you can see how good I am at saying “no.”

WCI in Tuolumne Meadows, August 2014

WCI in Tuolumne Meadows, August 2014

The monthly newsletter will also continue to be published. A lot of readers might not realize they’re missing out on some great stuff that doesn’t appear on the website, like this month’s article about taking advantage of little-known state 529 rules to get some extra tax deductions. The newsletter is just as free to you as the RSS/email feed of the regular blog posts, but you do have to sign-up for both of them individually. Speaking of free, it has been recommended to me from time to time to either sell subscriptions to the entire site, or to bottle it up as an online course and sell it directly to readers. While that may very well be a profitable activity, I prefer to keep this information free to you, the reader. In order to continue to do that, I encourage you to include our advertisers in your search for any financial services you may need.

I hope 2015 is a great year for you personally, professionally, and financially. If you have found the site helpful, please share it with your colleagues.

Jim

James M. Dahle, MD, FACEP
Editor
The White Coat Investor, LLC