The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing by James M. Dahle

Chapter One
 The Big Squeeze
 “Everybody who’s a physician, who makes vaccines, who wants to find the
 cure for cancer. Everybody who wants to do any medical good for
 humankind got the passion for that before he or she was 10.” — Bill Nye
 It will seem odd to a nonphysician to see this book. “How can a career
 in medicine NOT lead to the good life?” you may wonder. The idea that you
 should become “a doctor or a lawyer” to get rich because “doctors and
 lawyers are rich” is well entrenched in our cultural lore. Unfortunately, this
 “truism” is becoming less and less true every year. In fact, for the attorneys,
 the phrase is already essentially false. Sometime in the last decade or two,
 law schools seem to have transitioned into for-profit institutions, increased
 their class sizes to increase their profits, and pumped out thousands of law
 school graduates, apparently far in excess of the actual need for attorneys.
 The National Association for Law Placement (NALP) Survey of the class of
 2011 law school graduates found that only 85.6% of law school graduates
 found employment after graduation, and only 65.4% obtained a job that
 actually required bar passage. Of those in a job where bar passage was
 required, the median salary was only $61,500.
 Medicine has fared far better than Law in the last few years, mostly
 because unlike attorneys, the demand for fully trained physicians continues
 to rise. Physicians are facing their own challenges, however, which I like to
 refer to as “The Big Squeeze,” which is simply this: it costs more to get the

job, the job pays less once you get it, and increasing liability and
 compliance concerns make the job less pleasant.
 The Tuition Bubble
 Many pundits have referred to the rapidly increasing cost of higher
 education as “a bubble,” akin to the technology stock bubble of the late
 1990s, which burst in 2000–2002 or the real estate bubble whose bursting
 caused “The Great Recession of 2008.” I have no idea if we are in a tuition
 “bubble” or not, since the term “bubble” implies it will burst at some point,
 and the trend doesn’t seem to be slowing, much less reversing, anytime
 soon. When I started medical school at the University of Utah in 1999, in
state tuition was about $10,000 per year (it had been $8,000 just a year or
 two before). In 2013–2014, in-state tuition will be $32,000 per year. The
 price has essentially quadrupled in just sixteen years. If tuition were
 increasing at the general rate of inflation, it would be $11,600 in 2013, not
 $32,000. Is the education really four times better than it used to be? I highly
 doubt it. In fact, it has apparently gotten so bad that a few years ago they
 had to institute mandatory classroom attendance since so few students were
 attending, preferring to learn from texts, online resources, the class
 syllabus, and note-taking services. Is the job the degree qualifies you for
 paying you four times as much? Certainly not.
 Student Loan Interest Rates
 When my class graduated from medical school in 2003, those of us with
 student loans refinanced them at ridiculously low rates. Many of my
 classmates ended up with a fixed rate under 1%. Beginning in 2006,
 Stafford loans for graduate students were fixed at 6.8% and stayed that way
 until 2013, despite the fact that overall interest rates had dramatically
 decreased thanks to the actions of the Federal Reserve in response to The
 Great Recession of 2008. I found it absolutely bizarre that in 2013 I could
 get a 15-year fixed loan on a mortgage for less than 3%, but a medical

The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing by James M. Dahle