By Dr. Jim Dahle, WCI Founder
An enterprise like WCI gets lots of criticism: some bizarre, some unfounded, some accurate, and some perhaps even deserved. I try to read the criticism for a couple of reasons. First, it tells me if we're straying too far from our mission. As a for-profit business, we need to make a profit. No margin, no mission.
But making a profit isn't our No. 1 concern. It isn't even mentioned in our vision or mission statements, which read:
If we're straying from that too much, I want to hear about it so we can course correct. Of course, there are a lot of people, even very highly educated people, who have zero understanding of how the business or financial world works. Not only do they want me to work for free, but they want the employees of WCI to do so as well. The generation of any amount of profit is too much for them.
Sometimes you can help folks like that understand, and sometimes you can't. But so far, nobody has run us out of business by successfully starting a nonprofit WCI and doing what we do as an entity other than a business. In fact, most people trying to copy us tend to charge a whole lot more for their products and services than we do and reach far fewer people. So, it really makes me chuckle when people long for the “good old days” of WCI before I “sold it out” for money. Given that ads were put up on the site the first week of our existence, the “good old days” probably lasted 72 hours or less in 2011. There very well might be “too many” ads on a given podcast or newsletter, but I can tell you right now the right number of ads is not zero. If there were no ads, there wouldn't be a WCI at all. The community has been very clear they want the majority of content to remain available free of charge—without a subscription fee or behind a paywall. The only way to provide that in any sustainable way is with advertisements.
The second reason I try to keep up with criticism is that it shows me when our messaging is not clear. This worries me a whole lot more than the anti-profiteers or the people who just disagree with my political or religious views. We try to have a diversity of faces, voices, and experience on the blog and the podcast. There are many roads to Dublin when it comes to being financially successful, and I certainly don't expect every WCI columnist or guest poster—much less the readers—to follow the exact same path I or anyone else did. But I do get concerned when people misunderstand the basic principles we espouse.
So, I thought I'd spend today disabusing people of a few misconceptions out there.
Misconception #1: WCI Is Only for People Like Me
Over the years, I have been criticized for
- Writing articles about,
- Interviewing on the podcast,
- Allowing into the Facebook group/WCI forum/subreddit/conference, and
all of the following people:
- People with an MD from a Caribbean school
- People that did not have to borrow money to attend medical school
- People who did not match into or complete residency
- People who are not practicing medicine full time
- People who received an inheritance
- Physician assistants
- Nurse practitioners
Sometimes people get mad for silly stuff—like saying “APC” instead of “mid-level” or “mid-level” instead of “APC.” There was even a big to-do on Reddit and Facebook (“I can never read WCI again, it's worthless”) because I used the term “Naturopathic Medicine Physician” on a podcast instead of “Naturopath.”
Newsflash! WCI was not founded JUST for people exactly like me or exactly like you. The truth is that 95% of personal finance and investing is the same for everyone. Another 4% is the same for everyone in the upper tax brackets. Only about 1% of it is really exclusive to physicians.
We're just trying to help as many people as we can. Yes, perhaps a broader audience also helps the business be more profitable. Or maybe it doesn't. It's really hard to tell sometimes. But try to show a little bit of tolerance. WCI is about helping people with their finances—not correcting all social ills, settling every turf battle in healthcare, or dictating the one true way medicine should be practiced or money should be earned or invested. Get over yourself. It doesn't denigrate the value of your residency training to tell a chiropractor how a 401(k) works. Give me a break.
More information here:
Misconception #2: WCI Says You Should Save Everything
I'm really not sure where this idea comes from, but I see it all the time. Here are some examples:
“95% of the posts are ‘Don't ever spend money! Why spend when you can save! Live like a pre-med!'”
“Why would I save everything for age 60 when I might die before then?”
“Saving up extensively for retirement is nothing but foolishness.”
I think the message is very straightforward, but apparently, it's not getting out clearly. Let me spell it out. Here is my advice on how much to save:
#1 When you first get that high income, try to keep living about like you were before for a short period. Something like 2-5 years for most doctors. This is the “live like a resident” period I talk about so often. IT HAS AN END. Guess who gets to decide when it ends, when enough is enough? That's right, YOU DO. And even before it ends, you are still allowed to spend like the average American household (something like $60,000 per year).
#2 Save 20% of your gross income for retirement. Maybe a little more if you think you'll want to retire early. Spend the rest on whatever brings you happiness. Since you paid off your student loans in that live-like-a-resident period, you should be able to have a pretty darn nice life on 80% of a physician (or other high-earner) salary.
I know there are some FIRE-obsessed folks in the WCI community saving 40%, 50%, 60%, or more of their gross income. Heck, I confess I've even done that myself in some years. But that's certainly not a requirement or even a recommendation for most people with typical financial goals. I usually tell people that they can probably even spend a bit more than a resident during that initial period and still be fine. We probably gave ourselves something like a 25% raise for our four-year live-like-a-resident period. A 50% or even 100% raise wouldn't be crazy for many. But the point is that you want your spending to grow much more slowly than your income just did.
We spend a ton of money these days (and give away even more), and we think you should too. But it's also smart to “take care of business” early in life. Find a balance. Moderation in all things. The WCI message is to spend consciously and don't spend everything; it most definitely is NOT “don't spend anything.”
More information here:
Misconception #3: The Advice at WCI Has Changed
Some people say, “WCI used to be good, but the advice has changed.” First of all, all of the blogs and podcasts that came out “in the beginning” are still there. So, if only the classics are good, just read those. Second, I'm writing just as much as I ever have. On average, we still run a couple of original posts from me per week. That's as much as I ever wrote. Just because we offer you MORE doesn't mean what was originally there isn't still there. Third, my financial life and focus have certainly changed from the time I was a parent of young kids, was just finishing my live-like-a-resident period, and wasn't even a partner with my group to now where those kids are leaving the house, we're financially independent, and I'm running a 15+ person company in addition to practicing.
Naturally, I'm going to be learning about, thinking about, and writing about some different topics. After all, the first book I wrote was not about asset protection. The same old “boring” advice is still being given. In 2012 (probably long before you started reading), I published The 10 Commandments of The White Coat Investor. Here they are:
- Thou Shalt Realize Thou Hast a Second Job
- Thou Shalt Do Continuing Financial Education
- Thou Shalt Save 20% of Your Income for Retirement Beginning the Day You Leave Residency
- Thou Shalt Insure Against Catastrophe
- Thou Shalt Not Mix Insurance and Investing
- Thou Shalt Favor a Passive Investing Approach
- Thou Shalt Hire Only Competent Advisors
- Thou Shalt Minimize Expenses and Taxes
- Thou Shalt Minimize Debt and Manage Necessary Debt Well
- Thou Shalt Protect Thy Assets, Plan Thy Estate, and Stay the Course
It's pretty much the same stuff I'm telling people today. There are lots of useful rules of thumb out there. They might not be perfect (seems there's always some random exception to everything), but all of the following is still true:
- Not getting an employer match is like leaving part of your salary on the table.
- You should invest in retirement accounts before investing in a taxable account.
- You should know your state's asset protection laws.
- Diversify your portfolio.
- Make a written plan.
- Don't panic-sell in a market downturn.
- Index funds beat the majority of actively managed funds in the long run, especially after-tax.
- Financial literacy is worth learning.
- Avoid extreme portfolios.
- Don't adopt an investing plan that requires you to accurately predict the future if you cannot accurately predict the future. If you can accurately predict the future, you're in the wrong line of work.
- The more you can competently do yourself, the lower your fees will be and, thus, the higher your after-fee returns will be.
- Take on a reasonable amount of risk.
- Your savings rate matters more than your investment return, especially in the beginning.
- Don't add complexity without good reason.
- Self-insure when possible.
While one can have a legitimate argument about whether you should put small value stocks or international accounts in a tax-protected account, there isn't much you can argue about with the core message. The rest is just details. Don't mistake details or some random comment on a podcast for the core message. One of my favorite recent criticisms in this regard?
Who do you think ran Bogleheads University in 2022?
Misconception #4: WCI Is Only Good for Beginners
We get complaints that everything on WCI is too complicated. We also get complaints that everything is too simple. We're writing for people with all kinds of levels of financial expertise and wealth. Not everything is written just for you. But this idea that we never get into the weeds is bizarre. We cover lots of very advanced topics here at WCI. If you already know everything we're talking about, you're an extremely rare person. One of my partners says he doesn't read the site anymore because he has a good plan set up and now he just follows it. Nothing wrong with that. I think it's wonderful if doctors don't need us anymore. But if finance is his hobby and he wants to learn more, there is plenty available here to learn.
More information here:
Misconception # 5: WCI Is Useless Because of This One Thing
“I can't stand WCI because he doesn't think Tesla (both the stock and the car) is going to change the world.”
“I think WCI gets Bitcoin wrong, so I don't trust anything they say.”
“I'm not going to buy a $1,000 course or go to a $2,000 conference so WCI isn't for me.”
“I bought a house in residency and it worked out great for me so WCI is a fool.”
“I don't like this one company that sponsored a WCI podcast so WCI is crap.”
I guess some people just really find it hard to take what they find useful and leave the rest. I get asked my opinion all the time on all kinds of random financial topics—like a creative options strategy, cryptoassets, muni bonds, how much to leverage a rental property, or the latest retirement withdrawal strategy or insurance product. So, I share my opinion. But my opinion on these niche topics is hardly gospel. If you think I'm wrong about the long-term returns on growth stocks or the proper length of time to own a car before selling it, don't throw the baby out with the bath water. That likewise goes for people who look at our premium products (courses and conferences) or sponsors and conclude that WCI is not for them.
We expect less than 1% of our audience to buy our premium products. Most white coat investors NEVER buy one of our premium products. That's fine. We don't need you all to buy them for it to be worth our time and effort to create them. Some people need and like online courses and conferences. I'm not one of them, and you might not be either. But they really help some people, so we'll continue to make them. If you're a typical white coat investor, you've read a lot of free blogs and newsletters. listened to some free podcasts, bought a book or two, and maybe patronized one or two of our sponsors over the years. Great! Thanks for coming by. We're glad we could help you.
In conclusion, keep the criticism coming. Like anyone, we prefer to get it in a private, constructive manner rather than being blasted on social media, but however it comes, it's helpful. So, thank you. But don't lose sight of the forest for the trees. The WCI message is timeless and valuable. Doctors and others will benefit from it now and for years to come.
What do you think? What's your favorite bizarro WCI criticism? Comment below!