This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.

Dr. Jim Dahle:
This is White Coat Investor podcast number 326 – Finances for doctors with a terminal diagnosis.

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QUOTE OF THE DAY

All right, our quote of the day comes from one of my favorite prior WCICON speakers, Morgan Housel, who said “A big enough bonus can convince even honest, law-abiding finance workers selling garbage products that they're doing good for their customers.” And that sure is true. It's hard to look past that conflict of interest.

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You can find that link at whitecoatinvestor.com/best-credit-cards-for-doctors. So you can find that on the website and make sure you have the card that's working best for you. Obviously, if carrying a balance on your credit card, you shouldn't have any credit card at all, but this is assuming you're paying it off every month, using it responsibly. And it is actually a convenience card for you, a rewards card for you, et cetera, not a credit card.

GUEST INTERVIEW: ADAM MACLAUCHLAN

All right, we're going to get into an interview today. It's kind of an interesting interview as you may recognize from the title of this podcast. This is not the sort of thing we deal with every day on the White Coat Investor podcast, but I think it's very interesting. I think it's very eye-opening to think about what your life would be like if a huge, terrible diagnosis were dropped on you very early in your career. So, let's bring our guest on the line and we'll talk more after the interview.

Our guest today on the White Coat Investor podcast is Dr. Adam Maclauchlan. Did I pronounce that right, Adam?

Dr. Adam Maclauchlan:
Yes sir. You did. That's impressive.

Dr. Jim Dahle:
Welcome to the podcast.

Dr. Adam Maclauchlan:
Thank you. Thank you. I'm honored.

Dr. Jim Dahle:
We're going to be talking about a lot of sensitive topics today. We talk about money all the time with people, particularly on the Milestones to Millionaire podcast, but we're not only going to be talking about your money, we're also going to be talking about your health today.

It's a little bit of a double whammy, and I want to thank you right at the beginning for being willing to come on and being so accessible and so vulnerable, and to be willing to share your experience that I think will help a number of people out there. I think it'll help everybody out there, but I'm sure there are a few people that it's going to help a lot.

So, let's help people get to know you a little bit. Why don't we start with just talking about where you're from and your upbringing, your education, and your career to this point?

Dr. Adam Maclauchlan:
Yeah. I grew up around the Richmond, Virginia area. Really had a great upbringing, great parents. My dad was a mechanical engineer. My mom worked as a project manager. And so, like I said, I grew up in Richmond, Virginia area. I ended up going to Randolph Macon College, which is a Division III school. I played football there.

My financial background, I would say my parents were good blue collar people. They saved into 401(k)s, things like that. They didn't do too much investing outside of that. They did retire a little bit early because of how much they saved and paid down debt.

So, I had a little bit of financial background from them, but not a whole lot. I decided to pursue a career in medicine. And I could not get into a United States Medical School. I continued to apply and apply for a few years and was not able to get in. And so, I ended up going to a Caribbean school, Saba University. And so, that kind of created a chip on my shoulder.

But I tell you what, it was such a blessing from God because that's where I met my wife and we ended up couples matching into Indi University, IU Methodist that was in Indianapolis. And we were there for three years in residency. And then we worked out there west of Indianapolis at Avon, Indiana. And we were there for three years.

Dr. Jim Dahle:
Very cool. Indianapolis is very well known in my field. It's kind of a big name program for emergency medicine. I went out there and interviewed and I think I ended up ranking them forth or something on my match list.

Dr. Adam Maclauchlan:
Yeah.

Dr. Jim Dahle:
I wouldn't say I know it well, but I know it a little bit.

Dr. Adam Maclauchlan:
Yeah, they're a great program out there. Yeah, the ER program, the people, the residents I met there, they were awesome. I still have some friends from that program, which is good.

Dr. Jim Dahle:
Cool. So, what did you guys train in?

Dr. Adam Maclauchlan:
We've trained in family medicine, it was in the Midwest. So, I actually had trained in doing screening colonoscopies as well. So when we got out, I did outpatient medicine with screening colonoscopies. And my wife, she's the hardest worker I know. She ended up getting, did OB as well, C-section trained as well during her three year career in residency. And so, we dabbled in that, we both did outpatient. She was doing OB and I was doing screening colonoscopy. So, we were quite busy.

And then I ended up doing kind of a side gig as well for a non-narcotic pain management clinic. We basically just really tried to pay down our loans. We took a full salary from residency and started paying down our loans.

Even before residency, we took a job at a golf course at a bar. And all the money that we saved before residency, we threw into our loans. And then basically 10 months out of residency, we had paid close to about $400,000 worth of loans.

Dr. Jim Dahle:
Let's go back to how you got the loans. You mentioned that you applied several times. I don't know if she had the same story. That often means there's like a post back, there's some more degrees, there's some more debt, and then I don't know of any Caribbean medical school that's particularly cheap.

Dr. Adam Maclauchlan:
Correct.

Dr. Jim Dahle:
So tell us about the debt you guys had.

Dr. Adam Maclauchlan:
Yeah, correct. Like you just said, I did a post-back program at BCU, that was in Richmond. I still had a little bit of undergrad loans, but my parents pretty much knocked those all out for me. And luckily SoFi was a huge lender that I had used because I was coming out of medical school. I had about… I think 11% was the interest rate on my loan.

Dr. Jim Dahle:
Because you couldn't get federal loans, or why was it 11%?

Dr. Adam Maclauchlan:
Correct. Correct. I could not get federal loans being from a Caribbean school. Finally, SoFi was able to pick up those loans. I got them down to about, I think it was about around 5%. I had about, let's see, a little over $300,000 worth of loans. My wife was a little bit luckier than I. She had only about $60,000. Her family helped her out quite a bit, a little over that. So, like I said, we had a little under $400,000 total worth of loans together.

Dr. Jim Dahle:
Okay. And you paid them off in how long out of residency?

Dr. Adam Maclauchlan:
It was about 10 months. 10 months out of residency.

Dr. Jim Dahle:
Wow.

Dr. Adam Maclauchlan:
Correct.

Dr. Jim Dahle:
Wow.

Dr. Adam Maclauchlan:
Yeah.

Dr. Jim Dahle:
What percentage of your income was going toward that?

Dr. Adam Maclauchlan:
Quite a bit. Probably like maybe 70% of it. At Indiana University, we would get a stipend from residency every year, which they don't do that anymore. And when we signed on, we got $10,000, and the second year we got $5,000. Third year residency, we got another $5,000. So, we just took all that money and we threw it into our loans.

Also, when we signed on with the hospital based system, they gave us some stipend each month, and we took all that money, didn’t spend it and threw it right to the loans. So, we were pretty aggressive with it.

Dr. Jim Dahle:
Yeah, clearly you were inspired by something to do all of this. You mentioned you found the White Coat investor before we started recording, you mentioned as an MS-4, I think. Was that the impetus? What caused you to do this? This is very unusual, right?

Dr. Adam Maclauchlan:
It was that, along with when I realized how much interest I had to pay on my medical school loans, and, it just lit a lit a fire underneath me, and I was handing out your book left and right to all my residency friends to get into this. And of course, most doctors are not the most financial savvy, so I was trying to preach it to them.

Dr. Jim Dahle:
Oh, you noticed, did you?

Dr. Adam Maclauchlan:
Yeah. Just a little bit.

Dr. Jim Dahle:
All right, that would make for an excellent Milestones to Millionaire episode, but you're not on the Milestones to Millionaire Podcast. You're on the regular White Coat Investor podcast, and the reason why is because something else happened to you in your life. Do you want to tell us about what happened to you a year or two ago?

Dr. Adam Maclauchlan:
Absolutely. Yes, sir. First and foremost, I want to thank my Lord and savior Jesus Christ. He's been a blessing to me in this actual diagnosis that I'm about to talk about is actually just an absolute blessing as well. My wife has been a rock in this and I wouldn't be anything, I wouldn't be here without her. She's the hardest working person I know.

But basically what had happened is, I actually had identical twin boys. This was September, 2020. We were working as a hospital-based system. My wife, she ended up having preeclampsia. She delivered, I think it was about 32 weeks. So the boys did fine. They're great, they're healthy. We're so blessed.

And about a year later after that, in about September, 2021, I was starting to have some pain throughout my body. I played four years of college football. I get up every single day, 05:00 o'clock, I exercise, and I was doing some heavy weight lifting here and there. So, I was starting to have scapula pain, lower back pain, hip pain, shoulder pain.

Like I said, I had worked for a side gig with actually a chiropractor, non-narcotic pain management clinic. I would see car accident victims, and I was having this left shoulder pain. Actually, both my labrums are repaired from college football. So I thought maybe I just had injured it and tried to do some home physical therapy, just wasn't getting any better.

So, I decided to get an X-ray at the chiropractor's office where I worked at. And I saw the left shoulder look great, but obviously, the the upper left part of my lung was all whited out. I wasn't quite sure what was going on. And when I kind of thought back to it I was starting to have a lot of fatigue after work. But listen, I was working full time. I was working a second job, and I was raising two twin boys. So I was like, this is normal.

But it got to the point where I would get on the floor after playing with the boys and it took every strength of me just to kind of get up. So I started to think maybe something's going on. Like I said, luckily working for a hospital based system, I was able to get in contact with a pulmonologist right away. I ended up getting an X-ray right after that, that shoulder x-ray, which showed a huge mass in my right upper lobe of my lung. And after doing some more testing, I had lymph node biopsies, MRI of the brain PET scan, all that good stuff.

I basically found out that I had stage four adenocarcinoma of the lung. And it has an EGFR mutation, which this is a huge blessing. Actually, I had found that mutation out when my wife and I were interviewing for a private practice job in Virginia that we're currently doing right now. So, during the interview process, I found out that I had the mutation, which was a blessing.

And so, the cancer had spread, had about nine tumors in the brain. I had lesions all up and down my spine, my scapula, my rib, and my thyroid kind of all over. Luckily, like I said, I have the EGFR mutation, and so far I have been taking just a daily pill, $17,000 a month medication that I take daily. It's a basic kind of like a receptor type blocker medication and have not had to go under any type of chemo or radiation. They did want to do a gamma knife radiation on my brain. I didn't want to do that at that time. I’m glad I had not.

And so, I've been taking this medication day in and day out. I have not had a single side effect from this medication. My diet is very, very rigorous. I'm on a ketogenic diet. I do quite a few things outside of probably traditional medication. I do cold therapy and ice plunges and ice baths and saunas. And I do 24 hour intermittent fasting.

I do quite a bit of things. I'm up every single day, 05:00 o'clock in prayer, in scripture, and also exercising every single day and preaching this to my patients. As a doctor we're not always on the other side of the chair talking with a patient. And so, it's really opened my eyes and it's really helped me be a better physician and more compassionate physician as well too.

Dr. Jim Dahle:
All right. Let me interrupt you for just a minute. At this time you're what? 33, 34 years old?

Dr. Adam Maclauchlan:
Yes, sir. Yes, sir.

Dr. Jim Dahle:
And you get told you have lung cancer.

Dr. Adam Maclauchlan:
Yes, sir.

Dr. Jim Dahle:
Lung cancer, you're supposed to get this when you're 70 and you've had emphysema for 15 years, right?

Dr. Adam Maclauchlan:
Yeah. I've never been a smoker.

Dr. Jim Dahle:
Never been a smoker. Do you have some sort of asbestos risk factor, some sort of reason to have this lung cancer?

Dr. Adam Maclauchlan:
No.

Dr. Jim Dahle:
That can make the rest of us somehow feel comfortable that this can't happen to us.

Dr. Adam Maclauchlan:
I know, I know. No, not a single risk factor. I've never been on any medications. My labs have all been stable. In fact, when they got labs on me, everything was stone cold. They couldn't figure out what it was.

Dr. Jim Dahle:
Your shoulder hurt. You go in and you have metastatic lung cancer at early thirties, mid-thirties. How did you feel when you got the diagnosis?

Dr. Adam Maclauchlan:
To be honest with you, not once have I felt afraid or anxious or scared or angry or anything like that. I was ready to fight and I knew that God put this on me, and it was now my responsibility to start professing his name and to start reaching out to patients and being a patient advocate. I just felt like this was always in the cards for me. And doing podcasts like this and getting my story out there and helping people, that's the biggest thing. I know my road is not done yet. I've got a lot more things that God still wants me to do.

Dr. Jim Dahle:
Now, you are a doctor and you've got cancer. If you're like most of us that get cancer, you become an expert in your cancer.

Dr. Adam Maclauchlan:
Correct.

Dr. Jim Dahle:
What's the expectation of most people that get this cancer? Is this something where the average life expectancy is a year or five years or lots of people beat it? Or what's the expectation?

Dr. Adam Maclauchlan:
Yeah, definitely. Expectation is less than a year but these new medications that they keep coming up with and the diet plan. That's a big issue sometimes I have with, I think oncologists are fantastic. They're special people. But I think sometimes we need to focus on not just the disease, but the whole person.

And I think that incorporating not just traditional medicine, like what I'm taking, but also incorporating that with the right foods in your diet. Anti-cancer fighting foods, anti-inflammatory foods. Like I said, exercise, getting good sleep, which is huge. And then relationships. Cancer is a mind thing. If you let it take over your mind, it's going to destroy you.

I think we as physicians, we counsel on diet and exercise, but we don't counsel enough on relationships. Relationships, the deep relationships you have with people decreases the stress. Just look at what COVID has done with all people who were just secluded in their homes, and they were lonely.

Loneliness and not having relationships with people, that's worse than smoking, that's worse than obesity. That's worse than diabetes. That will kill you. And so, I think the relationships that you build with family members, with patients, that is huge. And I think that's what's really been keeping my cancer at bay.

Dr. Jim Dahle:
It's interesting you mention that. I have a family member who died with pancreatic cancer. I have a hard time saying this family member died of pancreatic cancer because the tumor was invisible on a scan just a month or two before death. And it just kind of felt like the family member kind of gave up. And so, I think there is a lot to mindset for sure, absolutely in treating anything like this.

But at some point, relatively early on, you realized you'd been given a terminal diagnosis. Now none of us get out of this life alive, of course. And you clearly being a religious person have a very eternal perspective on life. But what went through your mind when you realized your time was maybe more limited than the average person in their mid-thirties? What priorities did you think about? What was your thought process with what you wanted to do with the rest of your life?

Dr. Adam Maclauchlan:
Yeah. Multiple things went in, and one of the big things, and I think the reason why I'm on this podcast is my finances was a big priority for me. I wanted to make sure that my kids were well off. I've always wanted to create generational wealth. And like I said, I am blessed that my wife works as a physician. So we had dual income.

I'd say one of the two things that really popped in my head was that my family is financially secure and that I have the time with my family as much as I can creating that balance of not working too much, but working enough to create a little bit of wealth for them, but still spending as much time as I could with them, putting the phones down, being with my boys, staying away from the media, then all that stuff and just being in the now and creating, like I talked about that deep relationship, not just with my wife, but also with my boys.

I think there's this statistic that you have about 80% of the time that your kids are in their home is between when they're born until they're 18 years old. Then after that, you don't see them as much. And so, it is crucial to kind of be with them and teach them as much as you can. And I wanted to teach my kids about finances. And so, I've been constantly journaling and writing things. And I have a stack of books, financial, yours is one of them, that I want them to read when they get older, if I’m not here.

Dr. Jim Dahle:
So the financial perspective. What else? Did you create a bucket list or anything like that?

Dr. Adam Maclauchlan:
I don't think I created necessarily a bucket list because I didn't let my mind get to that point. I knew that I was going to be here for the long run. I just felt it. It just lit a fire under my butt to be healthier and to keep my mind in the now and just keep that stress level, those cortisol levels as low as I could by kind of all the things that I talked about.

Dr. Jim Dahle:
And I assume you're getting periodic scans from time to time and how is things going? Is it progressing? Is it getting better? Is it pretty stable? How's the cancer doing?

Yeah, God is good. I get scans every three months. I typically get a brain MRI and then I get a CT scan of the chest and I get lab work done. My oncologist is over at UVA right now. And so, like I said, I do that every three months. I just had a scan right before my birthday in June, end of June. And everything is stable, looks good. There's no brain lesions that are seen. The mass in my chest is mostly kind of scar tissue right now. The sclerotic lesions in my bones are continuing to heal.

Dr. Adam Maclauchlan:
Luckily I was able to convince my oncologist to lengthen these scans instead every three to every four months to decrease a little bit of radiation that I get exposed to in my body. Right now, I'm in talks with, it's called the EGFR resistors. It's a lung cancer foundation that I'm looking to kind of get on the board and start being a patient advocate and stuff like that. So, things are slowly going in the right direction.

Dr. Jim Dahle:
I think you better explain EGFR for the rest of us. I'm not sure most of the people listening to this podcast actually know what you're talking about when you talk about that. When I think about EGFR I think about glomerular filtration rates.

Dr. Adam Maclauchlan:
Yeah, yeah.

Dr. Jim Dahle:
But tell us what you're talking about with that. It sounds like it's particularly good protein to have on your cancer, something that makes it a little bit easier to fight. Tell us what it is.

Dr. Adam Maclauchlan:
Yeah. It's basically epidermal growth factor receptor. And so, basically what this is, it's a mutation that is found on the cancer gene. And so, there are a number of mutations. And some people may have had it. There's EGFR, there's ALK mutations. And so, these mutations and specifically lung cancer are actually, if you're going to have it, you want to have a mutation because they have developed these medications that can basically target these mutations on the cancer gene and prevent them from replicating.

So, people that tend to have lung cancers that do not have this mutation, it becomes very difficult to fight. And that's why a lot of times they start with chemo and radiation and blasting you at all sorts because they do not have this specific way that the cancer is working and replicating. And so, like I said, it is a blessing that I have this mutation. I'm on a medication called TAGRISSO that targets this mutation. I think it's a third generation tyrosine kinase inhibitor.

And so, over the years they've started to develop more of these tyrosine kinase inhibitors, and they're working better and better each time. They're having less side effects as well, which is good. And also they're coming out with other medications, immunotherapy type medications. You've heard of KEYTRUDA and things like that. And then of course the last ditch effort is basically kind of chemo and radiation and things like that.

And so, just talking with EGFR resistors, they are continuing a lot of research into newer medications. Lung cancer tends not to be the cancer that has the most funding. You see more for things like breast cancer. And I think the reason why you see this is that, like you said in the beginning, typically with people with lung cancer, you typically get people who are mostly in their kind of 60s and 70s who are getting that. And most of the funding is coming from the patients.

Dr. Jim Dahle:
And sometimes I'll bet people feel, “Oh, they did this to themselves. They've been smoking for 50 years.”

Dr. Adam Maclauchlan:
Correct. Then you get that stigma as well.

Dr. Jim Dahle:
That probably doesn't help funding.

Dr. Adam Maclauchlan:
Correct. Correct.

Dr. Jim Dahle:
$17,000 a month, that's what your medication costs. How much does insurance pay?

Dr. Adam Maclauchlan:
Like I said, God is good. Insurance pay, I don't pay a dime for it right now. And so, I'm working with AstraZeneca, which is the drug company. And I basically have to reach my max out of pocket, which I do pretty much after two months with all the scans and medications that I'm on.

My wife and I have separate HSA accounts, and so I just use my HSA account to pay for these scans and what's left over, usually the medication is paid up till about nine or 10 months throughout the year. And then I have to come up with the rest of the cost. But again, like I said, with a high deductible plan HSA, my max out of pocket is about $4,500. So I pay $4,500 every single year. So, not too bad.

Dr. Jim Dahle:
How would you feel about taking that medication if you had to come up with the cash for it yourself?

Dr. Adam Maclauchlan:
That would be difficult. I would think of a lot of different investing ideas. Like I said, and we can get into it as well. But yeah, I have a little bit of real estate investing that I do. If I had to pay $17,000 for that drug, I'd have to do something, probably in real estate, come up with something.

Dr. Jim Dahle:
Yeah. Yeah. It's an interesting dilemma. I'm glad you don't have to face it. I'm sure there are people out there who do. And difficult decisions like, “Do I start taking out home equity loans and leave my family worse off after I'm gone?” That's sort of a dilemma. I'm glad you don't have to face that. Good job getting health insurance. Did you also get life and disability insurance?

Dr. Adam Maclauchlan:
Yeah, that's an interesting topic. With my wife and I both being a dual income physician, we always had life insurance and disability through our jobs, which wasn't a lot though. And so, we always were a little risky. And in fact, I had a financial advisor who I just recently fired a few months ago, but that financial advisor had told me maybe you should think about possibly disability life insurance. I know that you guys are both dual income physicians, so it's kind of up to you.

And so, like I said, outside of our jobs, we do not have any other type of life insurance or disability. My new private practice, I get a little bit better life insurance and disability. And in fact, I pay a few dollars a month for an extra a hundred thousand dollars on my life insurance policy that no questions asked. But this is my thoughts on it. Like I said, these disabilities I feel like are almost kind of a bridge.

And we're getting to the point that our finances, it's got a lot of momentum going right now. I feel like we're closer than we think to financial independence. And maybe in a couple years from now, I would probably have canceled my life insurance anyways.

And so, that's kind of the way that I think about it. Obviously, if I could go back, I would obviously get more life insurance disability. Absolutely. But I'm not going to worry about the past. And I think that also kind of lit a fire under my butt even more to save more and invest more. And so, I don't need those type of policies, but I do think there is a time and a place for them.

Dr. Jim Dahle:
Now, this is a very reasonable decision lots of dual income dual doc couples make. They decide each other are going to be their life and disability policy. They figured the family can live on just one physician income. So, this is not an uncommon decision.

I'm curious obviously knowing that you got this you'd buy more, but I'm curious what your advice would be to just a regular dual income physician family that was thinking about making the same decision you made. Do you think it was a bad decision or do you think you just got unlucky?

Dr. Adam Maclauchlan:
I don't think it was a bad decision. I think it all depends on what type of dual physician income you're talking about. I think if it's a dual physician income that are not saving… We probably save, realistically probably 50% to 60% of all of our income. And I think if you have a dual physician income that is maybe only saving 10% or something like that, then it's going to take them longer to reach financial independence, meaning they're going to have to work longer.

And so, then at that point, I would say yeah, you'd probably need some disability insurance, life insurance, things like that. But I think it's a conversation between you and your spouse. If you guys aggressively save and you're both physicians, then it’s a conversation you guys have and come up with. But I think everybody's situation is a little bit different.

Like I said, I, I still don't regret it. I don't. I think that just puts bad thoughts in my head. And so, if anything, like I said, it was a blessing because it kind of fired me up even more. Blessing in disguise.

Dr. Jim Dahle:
Yeah. Now, clearly, financial independence and early financial independence is really important for you. It sounds like it was important before you had your diagnosis. Is that correct? What was your career plan, your financial independence plan before you were diagnosed?

Dr. Adam Maclauchlan:
Yeah, I think it was similar. It’s just I wasn't as passionate about it. I love being a primary care doctor. I love the relationships with my patients. The one thing that I don't like seeing where medicine is going is I think a lot of physicians are becoming burned out. And I can see it especially in the primary care world where we know they want us to see 30 plus patients, and I just don't feel I can deliver that great of care with 15 minute appointments.

I would love to have an hour appointment with a patient and talk about the most important thing, not medications. It's diet and exercise and sleep and relationships and stuff like that, because that overall I think would create a healthier population in our country.

But there are too many patients in this world, in this country, and there's not enough doctors. So, I understand where I'm at, but at the same time, I don't want to get burned out. And I think one of the best things you can do by not getting burned out is decreasing your time in the office.

Like I said, I'm blessed right now. I picked a great career. I work four days a week. My call is just phone call. I work four weekends a year on a Saturday, half morning urgent care clinic for our practice. Listen, I'm probably the most blessed physician in this country. And so, there's a lot more physicians that are working 10 times harder than me, and they're burned out. And so, it's a real thing.

And the biggest thing is having more time for my kids. At some point I would love to be in your position and being able to vacation multiple times. And that's my thing. I want to raise, I want to be there for my kids, and I want to raise them and I want to first and foremost teach them to continue to be Christ-like people and to also to give. That's the other biggest thing with the fat FIRE movement, is that I find more joy when I'm able to give back. And not just money, but also time as well too. My goal is to be able to open free clinics and doing mission trips and doing this all on my own dime.

And what happens with that? Well, you decrease stress and you find more joy in your life, and you're keeping that cancer at bay and you're showing the kids what it is to be a good human being and give back to this country.

Dr. Jim Dahle:
How did the diagnosis change your professional goals?

Dr. Adam Maclauchlan:
You mean like practicing wise?

Dr. Jim Dahle:
Yeah, like what you want to accomplish with your career. Maybe it didn't change it at all, but I imagine that sort of news being given to you and processing that over a few years and wondering if maybe your life expectancy is not going to be as long as you thought it would be, how did that change what you wanted to do with your career?

Dr. Adam Maclauchlan:
Yeah, honestly, I think it brought me closer to my patients. I think I was getting to the point where I was almost just trying to churn through as many patients and trying to make as much money and that didn't matter to me anymore. It was more of connecting with my patients and bringing my story to light. There's been countless times I've sat across a patient and we have cried, and I have prayed with them. And that is truly what has sparked my passion of being a physician. And that's why we became physicians.

Dr. Adam Maclauchlan:
And so, I definitely think it really energized me overall just to connect better with my patients and providing better patient care, and take the time with my patients. It's amazing. You feel like you don't have much time, but I think God just creates more time when you sit there and you have a deep, intimate relationship and conversation with your, with your patient, it goes a long way. Am I exhausted at the end of the day? Yeah. But you are so satisfied and it makes going to work worth it every day.

Dr. Jim Dahle:
Help us understand a little bit your wife's perspective. It'd be interesting and fun to be interviewing her at this same time and get her thoughts on her career and your career and what you've been doing with your finances. Give us some insight into how she's been thinking and feeling about all of this.

Dr. Adam Maclauchlan:
I'll tell you what. She is the most amazing person I know. I'll just get choked up talking about her. But I think what happens is that people don't understand that the spouse or the partner who doesn't have cancer, that's the one that they have the harder position, they have the harder role.

And the reason why is because they don't know what the other one is going through. They don't know when that person is having pain or a lot of stress in their life or what is going through their mind on an everyday basis. She wasn't in those when I had a bronchoscopy and when I had my lymph node biopsies and I go to my scans every three months. Does she come with me? Absolutely, every single time, but she's not sitting there in that scan with me.

And so, they don't know what's going through your head. I think the spouse has it 10 times harder. I think God gave it to me and not to her because I don't think I could be in her role. We could not switch roles at all. I think we work amazing as a couple when it comes to finances. I think there are too many couples in this country that don't even talk about finances. They have separate bank accounts. And I think when you become married, you're one, you're one person. And so we talk about finances daily. I am more of the investor in the day-to-day stuff or I should say more of the long-term stuff. And she enforces it. She is the saver.

Like I said, we work very well together. I like to probably spend a little bit too much and she likes to save. And obviously we have a budget and all that stuff that we go over weekly. And so, yeah, we work very well together. Like I said, I am blessed to have to have found her. And so, yeah, I think that it also can be difficult too. I think money is one of the most common causes of divorce. Do we get into arguments about that? Yeah, that's part of life but it's how you reconcile it. And like I said, we work very, very well together as a financial couple.

Dr. Jim Dahle:
Tell us a little bit about your finances and what you're doing to reach this early financial independence. Obviously, you have a very high savings rate. Obviously, you guys are working hard and earning well. What are you doing with the money?

Dr. Adam Maclauchlan:
Yeah. We have regular employee 401(k)s. We did some side gigs and each have a solo 401(k). We actually had gotten a bonus from our current private practice employer. The hospital actually gave us the bonus. We just took 20% of that and put that because we were paid as a 1099 employee. We took that and put it in a solo 401(k).

We have 457(b)s that we had with our hospital employee in Indiana. And of course, we have HSAs and our 529s for both of our boys. Virginia has okay 529 plan for tax benefits. And we have UTMA accounts for both of them.

And then also we have a taxable account. Each month we throw money into a taxable account. Like I said, we each have our W2 jobs, but we each do telemedicine on the side for a side gig. Like I said, we get paid as a 1099 employee for that. Actually, we put money away in a money market fund where our emergency fund is at. We add to that a little bit each month so that we can make sure we have enough to pay taxes the next year. And also putting about 20% of our income from our 1099 into a solo 401(k).

And the taxable account, we're pretty aggressive. I think there's a time and a place for bonds. I like ETFs and so majority of our taxable account is in BTI that we put every single month in.

And we put money into our mortgage to pay down the house a little bit more. And then I also have a side real estate business as well. So, we own three single family section eight homes, which we love because all of them are basically the single family, single moms with multiple kids. And we're kind of able to give back to them. And then whenever they need to help a hand for something, whether it's a new dishwasher, something like that, we can kind of help out with that. It also gives us a really good income.

And then we also have two quadplexes in Indiana as well that we run out to college kids. We have property managers running that. Obviously, since we live in Virginia, the two quadplexes, were actually two first purchased properties.

I actually took the semi-retired MD course that you guys had advertised and that had really helped us out because I always wanted to get into real estate, but I was in kind of analysis paralysis stage. And so, we ended up financing the two quadplexes that I have been doing well. And then the three single family section eight homes we actually purchased with cash.

And so, my goal from the real estate is to kind of accumulate enough cash flow to kind of supplement our income so I can start cutting down on work and doing some other things for the community.

What our goal is to hopefully purchase another long-term property. We haven't gotten to the medium term or the short-term rentals, but the long-term have been good for us. I think the reason why is because owning real estate, nothing's passive about real estate. So, you definitely have to put the work in but we do like these kind of single family long-term, especially the section eights.

And our goal is to continue to purchase more and more of those and purchase another one this year and maybe a couple next year and just continue to let that grow. All the real estate income that we have, we never touch. We throw it right back into our fund and we continue to let that grow.

Dr. Jim Dahle:
This is pretty remarkable. You're 35 years old, you already have 11 doors under management in addition to substantial retirement account index fund style investments as well. And yet you're pretty hard nose to the grindstone here. You're working hard talking about, “Hey, I'd like to cut back later in the future, I'd like to do some other things.” And yet you're sitting there with what most people would consider a terminal diagnosis. At what point do you say now's the time to cut back? You're saving 50% of your income, you've got 11 doors under management.

Dr. Adam Maclauchlan:
Yeah, I love it. And I think that's what keeps me energized. I do like the financial aspect and I have a wonderful job where I can help patients and cure patients and also make great money and also try to help people out in the real estate world as well.

I think if I wasn't became a physician, I'd definitely probably get into finance world or a financial advisor. But I think that also me keeping busy and staying healthy and being on a regimen, that's also what it keeps my cancer at bay. I get energized. I can beat this cancer. I have no doubt in my mind. I think it's the same thing as a chip on my shoulder and when I went to the Caribbean school and the United States Medical School wouldn't take me. I'll outwork anybody that I know. So, it just pumps me up.

Dr. Jim Dahle:
Yeah. Very cool. Well, our time has gotten a little bit short, Adam, but I want to give you a chance, 30,000 or 40,000 people are going to listen to this by the time all is said and done. I'm sure you'll hear from a few of your med school and residency classmates about it. But you've got a chance here, you've got a lot of people's ears. What's one thing we haven't talked about today that you think they ought to know?

Dr. Adam Maclauchlan:
Yeah. I would say everybody may not be religious, but I think that one of the biggest things that gets me through the day, I would say, is prayer and scripture. Developing that relationship with God is something that decreases stress and anxiety. We have too much stress and anxiety and depression in this world. I see it every other visit in my office. And the good Lord is there, is there for you. It's amazing the thousands of Bible verses on anxiety that people need to refer to.

And like I said, this is something that we still talked about, but I do think a big thing is mindset. I think when you have that relationship with God, that transfers over to the relationship with your wife or your husband, and that translates over to your relationship with your kids and your coworkers.

And developing that strong mindset I think goes into fighting off diseases and things like cancers and even your financial situation. Look at the Bible, there's over 2,300 different verses on finances in the Bible. God wants you to be financially independent. He does. He wants you to be able to use your knowledge and your finances to give back to people and preach the word.

Dr. Jim Dahle:
Very cool. Well, Dr. Adam Maclauchlan, thank you so much for coming on the White Coat Investor podcast and sharing your life and your story. And hopefully we can use it to inspire others, particularly those who may have been given a cancer or other serious diagnosis to live life to the fullest and to maximize their finances in a way that will allow them to maximize their and the lives of those around them. Thank you so much for your time.

Dr. Adam Maclauchlan:
Yeah, thank you sir. I appreciate it. Thank you guys for all that you do too. You're amazing, your entire team. You guys have been a blessing. I appreciate it.

Dr. Jim Dahle:
All right, I hope you enjoyed that interview as much as Megan and I did. If you want to get ahold of Adam, he has offered to talk to you. If you're in a similar situation or just need someone to talk to, here's his email address. [email protected]. It will be in the show notes as well, but he's more than willing to talk to you and help you through your perspective and share what's worked for him. So, if that podcast really resonated with you, reach out to Adam and he will be there for you.

All right. That's a tough subject. I don't know what I would do. I've never been in a situation like that. My family has thankfully to this point been very blessed with pretty darn good health. But that would be tough to decide how you want to live your financial life if you don't have a full financial life. Do you keep living just like you have been? And see if you can't have a pretty normal financial life, do you make changes immediately? Do you quit work immediately? Do you go out on disability? Do you start working down your bucket list? What do you want to do if you're in that situation?

I think it's worth it even if you're in perfect health, at least sit back today, spend a little time thinking about how your life would be different if you were given a diagnosis where the average person with it lives for a year.

Don't forget about that CardRatings partnership we have. You can find that at whitecoatinvestor.com/best-credit-cards-for-doctors and make sure you have the right card. If you're going to be spending the money anyway, you might as well be getting 2% or 3% or 5% cash back instead of 1% cash back. If you're into travel, you may benefit from one that gives you more either cash or points for travel. It'd be worth the effort. Make sure you're using the right card for your situation.

Is it a small thing? Is it going to make you financially independent to have the right card? No. Does it get lots of people in trouble if they're putting money on cards and not paying it off every month? Absolutely. But it's worth taking a little bit of time to optimize even that spending portion of your financial life.

SPONSOR

Our partner for this episode, our sponsor is Cerebral Tax Advisors. And if you're ready to make the most of your tax plan this year, Alexis Galati, the founder of Cerebral Tax Advisors, has more than two decades of experience in high level tax planning strategies and multi-state tax preparation. She's also the author of Advanced Tax Planning for Medical Professionals, which has been recently updated with the 2023 Tax Rules and is available on Amazon.

Medical professionals rely on Cerebral Tax Advisors for proactive tax planning strategies to help lower their effective tax rates and increase their wealth. Don't wait until it's too late to review your tax plan and potentially miss out on valuable tax savings. Visit www.cerebraltaxadvisors.com. Schedule a free consultation with Alexis.

Thanks for those of you who've been leaving us five star reviews and telling your friends about the podcast. It does help to spread the word about this important financial information. We had a review from PedsSv who said, “FMG. Thanks to Dr Dahle and his work I’ve been able to understand the ways for financial independence and overall wellness. Thank you for your work!” Five stars.

And we do. It's tough coming from another country. It’s tough coming from another country and understanding the US financial system. It's tough even if you grow up here. And so, we're happy to provide that service for FMGs as well as IMGs like Dr. Maclauchlan and heck, any other doctor who goes to any MD, DO, DDS, DMD, or even non-doctors. As we know, 95% of this stuff is the same for all of us. 4% of it is probably specific to high earners and maybe 1% is specific to doctors.

Keep your head up, your shoulders back. You can do this, we can help. We'll see you next time on the White Coat Investor podcast.

DISCLAIMER

The hosts of the White Coat Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.

This is the White Coat Investor podcast Milestones to Millionaire – Celebrating stories of success along the journey to financial freedom.

Dr. Jim Dahle:
This is Milestones to Millionaire podcast – Family physician lives like a resident.

This episode is sponsored by All Global Circle. You have valuable knowledge and can always use a little extra money. The All Global Circle community is set up to provide a clear, easy, and efficient means of communication between the pharmaceutical industry, the research industry, and those professionals who are using new developments and end products on an ongoing daily basis. If All Global Circle can't get you a survey to take within 90 days, they'll pay you a loyalty bonus just for logging in and checking it a couple of times per month. By signing up at whitecoatinvestor.com/global, you'll get an extra $50 just for being a member of the WCI community.
All right, we've got a family doc on here with a number of milestones that she has accomplished. But stay tuned after the interview, we're going to talk a little bit about inflation.

GUEST INTERVIEW

Our guest today on the Milestones to Millionaire podcast is Cassie. Welcome to the podcast.

Cassie:
Thanks for having me.

Dr. Jim Dahle:
Tell us what you do for a living and how far you are out of training and what part of the country you live in.

Cassie:
I'm a family medicine physician. I am nearly four years outside of training and we live in the Midwest.

Dr. Jim Dahle:
Okay. And tell us what milestone we're celebrating today.

Cassie:
I have a plethora of milestones.

Dr. Jim Dahle:
I've got this image now of the three amigos. Would you say I have a plethora?

Cassie:
Lots of people have paid off loans, so that happened in 2022 for us and then in 2021 we put down cash for part of our mortgage. So, that felt good. Then something I was really thrilled about was this past year we maxed out every single tax advantaged account that we could.

Dr. Jim Dahle:
Oh, that's exciting. Okay. You're talking in the plural. There's a “we” here. Tell us who else is in the family.

Cassie:
We have me and my partner, Dan and two children, toddlers, a four year old and a one year old, and then one on the way.

Dr. Jim Dahle:
Okay. Between you and Dan, what's your household income been the last few years since you got out of training?

Cassie:
During training it was about $150,000 combined and then recently about $350,000 last year.

Dr. Jim Dahle:
Okay. So good income. Certainly not what we hear occasionally on this podcast of people that are just killing it, but this is pretty classic physician household income. All right. Well, you've done all kinds of things. What things should we talk about first? Why don't we start with the loans? You came out of school with how much?

Cassie:
$220,000 in debt. And that was my net worth.

Dr. Jim Dahle:
Minus $220,000.

Cassie:
Yeah.

Dr. Jim Dahle:
When did you get married?

Cassie:
2016.

Dr. Jim Dahle:
Okay. So you owed some of this when you got married. What did Dan think about that?

Cassie:
My husband is very dead averse. Put himself through school with a tiny bit of help. And so, when he heard that we had that much money in debt, wanted to pay it off in the 10 year time. So, as soon as we got married we were putting like $3,000 of our income a month.

Dr. Jim Dahle:
Wow.

Cassie:
And just made a commitment when we first got married.

Dr. Jim Dahle:
So, how many months after you got out of training did you pay off those student loans?

Cassie:
31 months. Yeah.

Dr. Jim Dahle:
31 months. So, about two and a half years or so. And how'd you do that? You weren't making that much money. This is a big chunk of your income that was going toward these.

Cassie:
Yes. Large commitment to be free of any debt and also free of debt to PSLF timeframe. That motivated us to put everything towards the loans during training. And then after training we rented an apartment and didn't buy anything big. And so, we had a lot of money to just slam it towards loans.

Dr. Jim Dahle:
A lot of people will always say, “Oh, you should carry your loans and use the money to invest. You're borrowing at whatever rate and hopefully earning at a higher rate.” You guys decided what not to do that. Why was that?

Cassie:
Ignorance is bliss. Our financial awakening occurred 2021.

Dr. Jim Dahle:
Okay.

Cassie:
And we were very financial peace debt snowball kill the debt. Part of our financial advice was coming from my parent’s financial advisor who was a whole life insurance salesman, masquerading as a financial advisor. So, those parts, all of that together.

Dr. Jim Dahle:
Did you manage to avoid buying a whole life policy or did you end up with one?

Cassie:
Avoided. We were too poor. He had given us some great advice when we first got married and we kept coming back to him still in debt.

Dr. Jim Dahle:
That didn't stop my good friend that sold me one during medical school. The fact that I had no money didn't bother him at all when he sold me a whole life policy.

Cassie:
We kept coming the next step and he'd say, “Well, not yet, or once you have $25,000, talk to me.” And then we were like just something didn't feel right.

Dr. Jim Dahle:
Yeah, exactly. All right. How did it feel when you paid off that last loan payment?

Cassie:
Believing and daunting because the retirement piece had been there but not as full. Certainly freeing my husband, he cut back from full-time to 0.9 as a pharmacist, which doesn't sound like a lot, but between night shifts and day shifts, that bought us a couple extra days at home together.

Dr. Jim Dahle:
Wow. So, that's a good demonstration that it doesn't take complete financial independence before getting your financial ducks in a row to start making significant improvements in your life. And that's a good example of how it can happen relatively early.
All right. Well, how about this down payment? When did you save that up? While you were paying off the loans or after you finished off the loans? When did you save up the down payment?

Cassie:
The down payment was saved during loans and bought a house that was well within our means. It's about 1,400 square foot in the Midwest and it does the job. It's not a doctor house or what one would consider a doctor house, but it's a lovely house.

Dr. Jim Dahle:
And is your plan to stay there? Is your plan that this is kind of a starter house and maybe you swap into the doctor house at some point? What's your plan as far as housing going forward?

Cassie:
We're open. We live close to family that have nice big homes that cost less than our current home. So we just visit family.

Dr. Jim Dahle:
You've obviously, at least the last couple of years, put a pretty good focus on becoming financially stable, getting business taken care of relatively early in your career. Has anybody in your family given you a hard time? Why aren't you living like a doctor now that you're making the big bucks?

Cassie:
Interestingly, they've been really proud of us. I would say my parents kicked out their whole life insurance salesman guy right about when we were having our financial awakening. So, my dad was paying off his credit cards while we were paying down loans, so it was kind of like “Good job, high fives.”

Dr. Jim Dahle:
So, you're all doing it together. That's awesome.

Cassie:
Yeah.

Dr. Jim Dahle:
All right. This year you maxed out your retirement accounts for the first time. Tell us all the accounts you maxed out.

Cassie:
We got the 403(b)s, opened up a 457 non-governmental, maxed out the HSA and convinced my husband to read your post on the backdoor Roth. He does all our taxes on TurboTax and he didn't want to mess that up and I was like, I promise you it's foolproof. And then opened up the kids 529s with birthday money they were getting. And then this year, opened up a money market fund for a potential taxable account.

Dr. Jim Dahle:
Okay, cool. It's exciting. You're playing this rich person game, investing.

Cassie:
That is kind of surreal when all you thought you're just supposed to pay loans, the debt snowball and you're like, “Oh, there's another world.”

Dr. Jim Dahle:
Yeah, a whole other world out there. Well, this is awesome. You guys have done fantastic. As far as paying off the loans, did you find it to harder or easier than you thought it was going to be at the beginning?

Cassie:
Really easier in terms of keeping the lifestyle the same. Harder when it came to actually clicking the button. But nothing changed. We were still making our meals and going on family vacations and it was just seeing the number and clicking it or seeing the accountant opening it and being all right with that change.

Dr. Jim Dahle:
Awesome. So, you did a few things to kind of not only increase your income, but also to make sure that you had your own wellness being taken care of primarily through negotiation during the last few years. Tell us about some of the things you were able to negotiate with your contracts that made a difference in your life.

Cassie:
Yeah, I navigated in COVID times. They needed extra help in the ICU and I was fresh out of training. So, all of a sudden I found myself in the ICU from the outpatient clinic, but still with an outpatient in basket doing end of life discussions all meanwhile helping with codes.

So, in over my head working more than my point FTE contract, I reached out to my manager and said, “Hey, can you guys comp me for full-time for the time that I was in the ICU?” And they agreed to comp me. So, I was able to negotiate a bonus during that time.

And then another negotiation I made was able to make last year on return from maternity leave on a contract balanced with productivity of RVUs and patient facing hours, I was in the 90th percentile for RVUs dying, taking notes home two hours every night.

And so, I reached out starting in February with SOS emails. Then a formal sit down with my medical director who when she found out it was taking me like a month to get results back to patients, she said, no, we're going to pause. She went up to bat for me, she said, “This is how you do point a FTE.” And then we negotiated that I would work more on productivity rather than needing to increase patient facing hours, which I know a lot of docs get a lot of pushback from their managers, but just being persistent and finding people that'll be in your corner to help you balance life and salary.

Dr. Jim Dahle:
Yeah. And a lot of times when you start into those negotiations, you realize that you are the limited commodity. You are the valuable commodity and sometimes they don't make you feel that way when you're negotiating, but it's true. If you're willing to play a little bit of hardball and start talking about leaving, it's amazing what concessions you can get sometimes.

Cassie:
Most certainly. So, definitely negotiate, network and stick up for yourself, your family.

Dr. Jim Dahle:
Cool. Good tips. Well, let's say there's somebody out there that's like you were a few years ago. Maybe not so financially literate, hasn't yet had this financial awakening. What advice do you have for that person?

Cassie:
Certainly, take a deep breath. It's okay to find information later and to just persevere. Don't feel paralyzed by what you don’t know or might not know because as healthcare professionals we diagnose and treat and give plans all the time. It's not that much different. So, kind of seeing yourself like your own patient, looking up what to do, your website, your book. I love your Boot Camp book. It's very algorithmic. I'll share that with friends and family. It's a low financial commitment on their part. And so, I think that's a really nice easy step just to go box by box and keep going through it.

Dr. Jim Dahle:
That's definitely the way it was written. That was the whole point. It was to give it to people that just need to be told what to do. Awesome. I like your idea, it's not all that different from a treatment plan. Physician healed thyself, healed thy finances. Very cool.

Awesome. Well, it has been wonderful to have you on. Congratulations on your success. This is the perfect “live like a resident” example. I tell people to do it all the time. They'll be able to pay off their student loans, save up a down payment and max out their retirement accounts, and you have shown that indeed it works if you actually do it. So, congratulations and thank you for coming on to inspire others to do the same.

Cassie:
Thanks.

Dr. Jim Dahle:
All right. Well, thank you so much.

All right. I hope you enjoyed that interview as much as I did. It demonstrates a lot of things, but mostly it demonstrates that this actually works. If you actually keep living about like you did during training for a little while after you finish you can save up a down payment and pay off your student loans and max out your retirement accounts.

You can do it all. You don't have to choose between them as long as you don't let your spending, your lifestyle grow just as quickly as your income does. It's all about the difference between those two and there's no better time than the very beginning to really make that difference large.

FINANCE 101: INFLATION

All right. As I promise you at the beginning of this episode, I want to talk a little bit about inflation. Inflation. It's been in the news a lot the last few years, but honestly it's something that investors ought to be thinking about all the time.

Neurologist and financial guru, Bill Bernstein, talks about the four deep risks when it comes to your finances. And these are inflation, deflation, confiscation and devastation. Deflation is like the Great Depression. Confiscation is like when Russia came in, became communist and took everything. Devastation is like World War II and every city in Germany had the snap bombed out of it.

But of all these deep risks, the most common one to show up in world financial history is inflation. It's pretty common. It happens all the time. Both just kind of regular high inflation like we've had the last year or two, as well as Zimbabwe and style hyperinflation.

And so, inflation's something you want to be thinking about a lot when it comes to portfolio design and when it comes to everything. In fact, you should get used to thinking in terms of real, and when I say real, what that means is after inflation numbers and figures.

When you're thinking “I need this much money to retire on in a few years”, you need to be thinking about that in terms of today's dollars. “I need $3 million in 2023 dollars is what I need.” Now, by the time you get to that point, that's going to be more than $3 million. Maybe it's $3.6, maybe it's $4.2, whatever.

But the point is you got to get used to thinking in terms of after inflation numbers. Same thing when you're thinking about your investment returns. It's wonderful, you made 9% this year, but if inflation was 4%, you're really only made 5%. Now I wish the IRS would think this way. They do not. They make you pay taxes on that inflation. And that's an unfortunate thing about our tax system, such as it is. But you need to learn to think in terms of inflation adjusted numbers with everything, whether that's returns, assets, et cetera.

My favorite place to go for inflation data is a website called inflationdata.com. And the nice thing about it is as soon as the federal government comes out with its inflation figures, they're published here, and you can look back historically at what inflation has been, and you can also look at the current inflation data.

The one you see in the news most of the time is the year over year inflation figure. And the current inflation rate is what they often call it. And as I record this on June 16th, 2023, that rate is 4.05%. So, over the last 12 months in general as measured by the government, using their consumer price index for urban consumers, prices have gone up 4.05% over the last 12 months.

And that's a lot better and has been for the last couple of years. Inflation peaked from all the liquidity and low interest rates that have been going on with our economy to try to save it from the COVID pandemic. They probably overshot the mark, obviously, in retrospect. That peaked at over 9%. And you can see that when you look at this current inflation table that they have there.

If you go back you can see in June of 2022 it hit 9.06% and that's over the prior 12 months. If you go back to 2020, you can see at one point that rate was almost 0%. In May of 2020 the prior year's inflation was basically flat. There was no inflation. And then from that point on it climbed and climbed and climbed.

By the end of 2020 it was 1.36%. By the end of 2021 it was 7.04%, and then it peaked in June of 2022 at 9.06%. By the end of 2022 it was down to 6.45%. And with the most recent data, it's 4.05%. Historically, inflation has been about 3% over the decades. Obviously, sometimes it's higher, like it has been the last couple of years and sometimes it's lower than that 3%.

You should be aware that the Feds part of their mandate is to keep inflation under control and they are actually aiming for about 2% inflation. That's where they've decided the economy seems to grow best at about 2%. That number is actually kind of just pulled out of random air.

It's really all about the expectation. That probably could have been set at 1% or 2.5% or whatever. But the point is, to have people expect something and then deliver that. That's what seems to allow the economy to grow. The economy doesn't like uncertainty.

And so, that's what you ought to expect. That's what the Fed is trying to do. They have pretty good tools to keep this under control in the long run and you ought to expect them to use them. That's why when inflation got out of control, boy, you started seeing them hiking interest rates like crazy. I think for three months in a row it went up three quarters of a point for short term interest rates and they started raining in all the liquidity they've been pumping into the system.

More interesting chart on this inflationdata.com site and they've got some cool calculators there too. But my favorite chart is under a tab, they call it the monthly inflation data. And rather than summing everything over the prior year, this actually tells you what it was over the prior month.

And if you look back, you can see that of course inflation is going to be lower now than it was a year ago because there's actually been negative inflation for four of the last 12 months. Last July and August and November and December, it was actually negative. That we had deflation, not just disinflation, which is a lower rate of inflation, but deflation for four about the last 12 months.

And then it's also interesting to see the pattern that inflation is generally higher in the first few months of the year. January, February, March is when people tend to raise prices and get raises at work. And so, inflation is often higher in the first few months of the year than it's later in the year.

But it's very interesting to look at that month to month data as well. That was very reassuring last year, even though the one being published was really high to look and see that going month to month inflation has already been coming down quite a bit.

So, that's good. Inflation is bad for investors. It is not a good thing. It makes your money that you have worth less. And so, getting this back down to a low rate is important to keep the economy growing and to keep your nest egg growing. But my point is start learning to think in after inflation terms.

SPONSOR

Our sponsor for this episode is All Global Circle. You have valuable knowledge and can always use a little extra money. The All Global Circle community is set up to provide a clear, easy, and efficient means of communication between the pharmaceutical and research industries. Those professionals who are using new developments and end products on an ongoing daily basis. That's you.

If All Global Circle can't get you a survey to take within 90 days, they'll pay you a loyalty bonus just for logging in and checking it a couple of times per month. By signing up at whitecoatinvestor.com/global, you'll get an extra $50 just for being a member of the WCI community.

All right, thanks for being with us for another episode of the Milestone to Millionaire podcast. Our regular White Coat Investor podcast will drop in three more days. Those drop on Thursdays, these drop on Mondays. I hope you enjoy the variety between them.

We appreciate your contributions to the podcast. This really is a community. We really want to provide the content that you're looking for and have your participation. If you would like to share the milestone you've accomplished most recently, we'd like to bring you on. whitecoatinvestor.com/milestones is where you apply, and we will take your experience and use it to inspire others to do the same.

In the meantime, please, thanks for what you do. Be optimistic, you can do this. We're here to help. So, keep your head up and your shoulders back. We'll see you next time on the podcast.

DISCLAIMER

The hosts of the White Coat Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.