Dear 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).
I 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
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:
- Buy a house when you shouldn't
- Use a mortgage with less than 20% down when you shouldn't
- Get your contract evaluated when it may not matter
- Pay a financial advisor for advice you may not need
- Buy disability or life insurance you may not need
- Buy my book when you may not need it
- Buy other books you may not need
- 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
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
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
Congratulations on your success! You almost earned more doing your side job than I did as full time 70th percentile internist; I’m sure you’ll exceed my income next year.
The next logical step is to cut back your ER shifts! You in a high risk specialty in terms of lawsuits. Why take the risk when you can earn more while taking less risk by writing books or giving speeches.
I’ve been giving your book to new doctors joining my group, as well as to my old residency director. May I suggest that instead of (or in addition to) starting a WCI scholarship, give a copy of your book to every residency program director in the country! I suspect you’ll do a lot more good by potentially reaching every new doctor in training. Furthermore, it may well generate a lot more sales of your book when every resident reached goes out and gets his own copy. A win-win situation!
Again, thanks for all you’ve done. Best wishes for even greater success in 2015. You earned every bit of it!
That’s a good idea. I hadn’t considered residency programs. I just ordered a box of books to start sending to med school deans and financial aid folks.
Start with the IM, FP, Peds programs – lowly paid PCP’s need all the help they can get. Of course, it’s not only about how much you make, but how much you spend relative to how much you make.
Thank you so much for your site and the work you do for doctors (and others too) . I am really happy you are making your hobby a financial success. Like many of your readers, I think you will have saved me tens of thousands or more due to my ‘WCI Financial Institute’ degree by implementing concepts from your book and site. I look forward to your continued success.
Jim,
Congratulations on your success an thank you for your efforts. I have referred many colleagues to your blog and most all have remarked how valuable they also find it
Don’t be ashamed of the money you have made….Anyone who has followed your past state of the blogs (or just reads the links in this one) understands that the money you made this year was really a culmination of the first 4 years of work in which you made very little money and just offered us all great information. Looking at the numbers in any detail, and one understands that the book made you the lion share of profit this year. Although, you are tying that to the website, writing a book and getting people to buy it is no small feat! Hope many more people buy it including those out there who don’t wear a white coat. Awesome that you have an employee now too! Didn’t realize you had a newsletter, so you have at least 1 new sign up for that today. Looking forward to more good info in 2015. Thanks,
Oh yeah….and I just facebooked a link to your blog….other chronic readers like myself should consider doing the same if you have learned as much as I have.
Jim,
I work for a large university-academic medical center and have access to a 401 (a) defined contribution plan from my employer plus a 403b and govermental 457b. In addition to the employer 401a contribution, my assumption is that I could put $18,000 in a 403 b plus additional money into a 457b to equal a total of $53,000 contribution limit.
Am I interpreting the plan limits incorrectly? Am I allowed to contribute more than $18,000 to both the 403b and 457b in order to equal the 53K?
The 457 limit is completely separate from the 403B limit. The 401(a) is also separate as I understand it. Read the plan documents. Chances are you will be able to put $18K into the 457(b), $18K into the 403(b) (possibly with a match, but probably not given the presence of a 401(a),) and then a certain amount into the 401(a) that is probably involuntary. Chances are good the total in the 401(a) may be just $17K (for a total $53K) but I don’t know that is technically a requirement.
Chances are low that you will be allowed to contribute more than $18K to your 403(b) or 457. Some 401(k)s, and perhaps some 403(b)s allow for post-tax, non-deductible contributions that some use to do a mega backdoor Roth.
I can’t emphasize enough though that you (and everyone else with an employer provided retirement plan) needs to go get a copy of the plan document and read it. Yes, it’s boring. Yes, it’s tough to understand. But getting into that habit is probably worth hundreds of thousands over your career. Being financially literate really pays off, and what better to understand than your own retirement plan? I’ll bet your plan document answers all your questions quite clearly.
Jim,
Thanks for the reply. The document states that the employer contributes 8.5% of salary up to $265K per year ( $22,525) as a benefit in lieu of social security without any employee mandatory contribution. In addition, the employer may contribute an additional contribution based on the individual physician’s contract. It states that up to $53K may be contributed to the 401a per IRS limits. In my 401a, I receive the maximum $22,525.
The 403 b and 457 b state that the maximum contribution is $18K for each plan. If I am interpreting this correctly, I can contribute $18 k to both the 403b and 457b plus the 22 K from the 401a?
Sounds right to me. You’re right that the 401(a) has to officially come from the employer, but it’s not like you can take it as salary instead, so it’s mandatory.
1) Can private practices set up a 401a plan? or is it limited to government employees?
2) I am already maxed out on my 401K (53K). Can I have my C-corporation add a 401a on top of the 53K I am getting in my 401K?
1) I haven’t heard of one in a private practice, but I don’t know the answer to your question.
2) If your C corporation is a separate, unrelated employer from whoever the employer of your 401(k) is, and you get earned income (a salary, not just dividends) from the C Corp, then yes.
Hey Michael:
I am not a financial planner … I don’t even play one on TV, but I love the 457 plans … I have one myself.
It looks like you have the trifecta of the mandatory 401a, and the optional plans of the 403(b) and 457(b). You are correct, most plans have caps on the mandatory (401a) which is different from the SEPARATE caps on the optional 403(b) and 457(b). With these plans, you can really put away some significant cash into retirement savings.
I think your interpretation is correct, ($22k to 401a, $18k to 403b, and $18k to 457b) but contact your plan’s representative to help check your numbers. They can run you through the numbers, and set up your paycheck deductions so that you maximize the plans. (You are paying them with administrative fees, so you might as well use them.) You will also need to determine how you invest the money once you are doing the paycheck deductions just like other retirement plans.
When you are at it, also see if the 457(b) is “qualified” or not. It has tax implications when you separate from the employer and are able to tap the 457(b).
I really don’t know why universities don’t let physicians know about these incredible benefits. It helps to make up for the “lost” retirement funding years.
Cheers:
Jeff
(This is intended as educational purposes only – not finance advice.)
Impressive results on the blog. Congrats. I’ve really enjoyed reading this blog since finding out about it (through your book by the way).
What’s your next book?
Probably going to focus on tax reduction.
Cannot wait!
Jim:
Congratulations on a great year!
The book sales are phenomenal!
For those of you who are unfamiliar with self-publishing, earning $83k+ in royalties is killing it. Most self published authors earn less than $5k a year. Source: (http://www.digitalbookworld.com/2013/self-publishing-debate-part3/)
Strong work …. I’m looking forward to your next book.
Cheers:
Jeff
Congratulations and thank you for all you do! I hope your enterprise continues to grow!
Congrats and well deserved on the income. If you want any help or feedback let me know…the Eastview Community Foundation, that I am on the board of, gives out about 100 scholarships a year.
looking forward to that book as well
Congratulations on a(nother) successful year at WCI. As someone who is married to, and friends with, many physicians, I’m appreciative of the knowledge your blog and book have given me, and that I’ve been able to share that knowledge with several close friends who could really benefit from it. All the best in 2015!
hell yeah! this is only the tip of the iceberg too
Congratulations! It’s awesome that all the work you’ve done has yielded success.
Jim,
I have been a long time lurker but I couldn’t help but post this time around.
First and foremost, a happy new year and congratulations on the financial, but above all “blogger helper” satisfaction. As echoed by many here, the financial advice definitely have benefited many (including me) in life and in dollars, probably more than your own income. That in itself is probably very gratifying.
Second, while I was in later years of medical school I sort of traveled the same beaten path you had before you started the blog. I became financially “literate” from reading books/articles and later eventually did come upon your blog a few years later. I also nurtured new skill set (Programming) and became an entrepreneur while in residency. I have learnt a lot from physician entrepreneurs and in this regulatory environment I believe every physician should diversify their skill set beyond just medicine.
I completely agree; having the same stable income as a physician outside of medicine requires exceptional skills and some mobility/luck. Doing so while being a physician is doubly so. I am sure many folks in medicine were chronically frustrated and some went ahead and became financially smart and managed their own money but very few, if any, put in the work you have to start a blog to help other physicians in an entrepreneurial spirit. Kudos to that! This relates to what I mentioned earlier: you went outside your “comfort zone” in medicine and started this and now it is bearing fruit (financially speaking at least)
I would leave with a couple of questions: how did you motivate yourself to write the book and did you have any help? How difficult is it to self-publish?
Thank you and will continue to follow the blog.
The motivation came from a lifelong desire to write a book, a desire to make some money on it, and the same burning passion to help other doctors to avoid the mistakes I made that motivates me to write the blog. I also hoped I would reach a new audience through the book. That said, it was still a ton of work. There were many days I came home from a shift and all I did the rest of that day (either before or after the shift) was work on the book. The writing was actually the easiest part!
I’m a do-it-yourselfer at heart, so it’s not a surprise I went the self-published route. While it is a lot more work to be your own publisher (and most importantly, marketer), the royalties per book are also 20 times higher, so that helps a lot. But I read several books and dozens of pages on the internet and attended a one hour class at a blogging conference and spoke to several self-published and regularly published authors prior to doing it myself. I’ll be able to save a lot of the effort on my second book, of course.
Thank you for the reply back Jim. Would it be burdensome/too much time on your part if I were to personally contact you for any useful references or books if one is interested in pursuing self publishing a book (essentially resource you thought were great and essential to get it going minus the motivation part).
I’d start here: http://www.amazon.com/Killing-Blogging-Facebook-Guerilla-Marketers-ebook/dp/B007XVWEIU/ref=pd_sim_kstore_5?ie=UTF8&refRID=19GYTBXVY1NJNWE1TSR0
Bravo! Good to hear your doing well with all the hard work you put in on this blog. Thanks for your hard work.
Congrats Jim! You have done the medical community an invaluable service! I make sure to direct everyone of my co-workers to your blog and book… Keep up the good work. Cant wait for your next book on Tax reduction.
Congratulations Jim…fantastic numbers. We really enjoy working with WCI readers – they are a different breed for sure! It is pretty funny we can usually tell if they are a reader or not by the questions they ask us on their contract.
We have been sending WCI books to spread the word throughout the residents/fellows with a Seth Godin ‘Tribal Marketing’ spin and look forward to watching the numbers grow and grow. It also takes up a slide in our Keynote we give to programs throughout the country.
Happy to be a part of it and provide any value to the blog/readers/you we can.
Congrats again – looking forward to a great 2015 with you and your readers!
– Jon Appino
Contract Diagnostics
Just wanted to say thank you for all your hard work from a faithful reader.
Congratulations on your success with the blog. I know I’ve told dozens of colleagues about it as I feel its message is one that needs spreading in our field.
Just curious – why no home office deduction? Seems as or more likely to withstand IRS scrutiny than the WCI retreat.
I don’t qualify for it. In order to take the home office deduction, you have to have an area of your home exclusively used for business. I don’t have that. However, I do legitimately qualify for a retreat as it was only co-workers and their families invited. Would I get caught taking the home office deduction? Probably not, but it seems dishonest to take a deduction I don’t qualify for. I can’t find a part of my house that somebody else doesn’t want to use at some time or another.
Have you thought about making the ebook available to libraries via an aggregator like Safari Books? I don’t know anything about the business aspect of it. But we have The Investor’s Manifesto, Personal Finance for Dummies and others available electronically for our students via Safari. Personal Finance for Dummies is available via Kindle on Amazon so I don’t think that is an issue. The ebooks on Safari are not downloadable. Might make you some more money.
I don’t know if they’ll do it or not. Those titles you list are not self-published though, which is the big issue. I remember somewhere in the process that I had to do something special (physically put the price on the book maybe, or a different type of ISBN, can’t recall) in order to get books into libraries and physical bookstores and decided it wasn’t worth it. Might revisit it next time.