{"id":308512,"date":"2023-07-26T13:04:08","date_gmt":"2023-07-26T19:04:08","guid":{"rendered":"https:\/\/www.whitecoatinvestor.com\/?page_id=308512"},"modified":"2025-11-15T13:48:49","modified_gmt":"2025-11-15T20:48:49","slug":"faq","status":"publish","type":"page","link":"https:\/\/www.whitecoatinvestor.com\/faq\/","title":{"rendered":"FAQ – Frequently Asked Questions"},"content":{"rendered":"
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Frequently Asked Questions<\/h1>\n
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\n You probably have tons of questions relating to finances and how to build your own wealth so you can enjoy a meaningful and comfortable retirement. And since 2011, The White Coat Investor has provided tons of answers to show you, to teach you, and to inspire you.<\/p>\n

If you\u2019re already somewhat familiar with the world of money, we\u2019ve got you covered. If you know absolutely nothing and are starting fresh, we have you covered there as well. That\u2019s why you should peruse the frequently asked questions below. They\u2019ve all been asked hundreds of times by hundreds of people who were searching for the same knowledge that you are. Now, you\u2019ll get to learn what they learned.<\/p>\n

Then, head on over to our Personal Finance for Doctors<\/a> page that will provide you with wealth-building resources and links to dozens of posts that will provide a solid foundation for your journey to financial literacy.\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

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Personal Finance<\/h2>\n\t\t\t\n\t\t\n\t<\/div>\n\t
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How much do I need to save for retirement?<\/h2> <\/div>\n
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A typical doctor can ensure a comfortable retirement after a 25- or 30-year career by saving 20% of their gross income for retirement. Saving for other goals (house down payment, new car, college, paying off student loans, etc.) is all in addition to that. If you are not saving that much, try to increase how much you save by 1% each year, and as you accomplish your other financial goals, redirect that income toward retirement savings.<\/span><\/p>\n

How Much Money Does a Doctor Need to Retire?<\/a><\/p>\n

Safe Savings Rate<\/a><\/p>\n

6 Reasons to Have a High Early Savings Rate<\/a><\/p>\n

7 Ways to Increase Your Savings Rate<\/a><\/p>\n

Retirement Plan Contribution Limits<\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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Why do doctors need to budget?<\/h2> <\/div>\n
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A budget is a personal thing since it demonstrates where your priorities are. You might not think of it that way, but if your budget DOESN'T reflect your priorities, it's time to make a change. For example, some people may spend more on clothes, transportation, vacations, or their home. Others might direct a lot of money toward paying down debt or toward retirement. Still others may give a lot to charity. Some may even be embarrassed to reveal they're spending most of what they make\u2014or even more than they make. No wonder no one wants to talk about this.<\/span><\/p>\n

It helps if you don\u2019t think of the <\/span>process of budgeting<\/span><\/a> as constraining and boring but instead as a <\/span>plan for financial independence<\/span><\/a>. Many marriages break up over financial issues. Budgeting done properly can essentially <\/span>eliminate relationship fights<\/span><\/a> over money.<\/span><\/p>\n

And remember, in a 2019 survey, it was revealed that about 25% of doctors who are in their 60s have a net worth of <\/span>less than $1 million<\/span><\/a>. If those docs had budgeted, that percentage likely wouldn\u2019t be so high.\u00a0<\/span><\/p>\n

Doctors Need to Budget Too!<\/a><\/p>\n

10 Ways That Even Physicians Can Save Money on Groceries<\/a><\/p>\n

Real Life Examples of Physician Budgets<\/a><\/p>\n

Zero-Based Budget as a High-Income Professional<\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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How do doctors build wealth?<\/h2> <\/div>\n
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The most significant wealth-building factor for most physicians and other high-income professionals is their earned income. If you carve out a significant portion of your earned income and invest it in some reasonable manner, you are highly likely to become wealthy over a two- or three-decade period.<\/span><\/p>\n

A doctor willing to continue to live a lifestyle very similar to what they lived as a resident for just 2-5 years after residency will be able to pay off all of their student loans, save up a down payment on their dream home, and catch up to their college roommate's retirement savings accounts. The financial jumpstart created by living like a resident while earning as an attending is likely to result in a doctor becoming a millionaire less than a decade out of training, using nothing besides their earned income.<\/span><\/p>\n

How to Build Wealth by Living Like a Resident<\/a><\/p>\n

How to Become Wealthy on a High Income<\/a><\/p>\n

What Does Live Like a Resident Mean?<\/a><\/p>\n

Financial Advice for Low-Income Doctors<\/a><\/p>\n

How to Get Rich Fast<\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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Should I pay off debt or invest?<\/h2> <\/div>\n
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Ninety-five percent of the time, there is no right answer, but 5% of the time there is. If you're giving up an employer match in your retirement account to pay off debt, you're making a mistake, basically leaving part of your salary on the table. If you're carrying 30% credit card debt in hopes that your investments will outperform it, you're making a mistake. But for just about everything else in between, I can come up with a situation where it might make sense to invest but where it could also make sense to pay off debt\u2014no matter what kind of debt that might be.<\/span><\/p>\n

Should I Pay Down Debt or Invest My Money?<\/a><\/p>\n

Pay Off Debt or Invest?<\/span><\/a><\/p>\n

Pay Off Debt or Invest? \u2013 Podcast #235<\/span><\/a><\/p>\n

How Fast Can You Get Out of Debt?<\/span><\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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How can I make more money?<\/h2> <\/div>\n
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To reach financial independence quicker than their salaries allow, many docs look for other sources of income. That could mean becoming an entrepreneur or simply finding a lucrative side hustle.<\/span><\/p>\n

Ways Doctors Can Make More Money<\/span><\/a><\/p>\n

Physician Side Hustle Ideas<\/span><\/a><\/p>\n

How to Create Multiple Streams of Income<\/span><\/a><\/p>\n

Entrepreneurship and Passive Income<\/span><\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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How should I save for a child's college education?<\/h2> <\/div>\n
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With a high income, it probably will be difficult for a doctor\u2019s child to qualify for student aid. But there are ways to save for your child\u2019s education that can also provide you with tax breaks. For instance, 529s are a great resource. Opening a 529 allows you to use after-tax money that can grow inside the account tax-free, and if you use that money on legitimate college (or med school) expenses, it comes out of the account tax-free.\u00a0<\/span><\/p>\n

But when thinking about sending your child to college, here\u2019s something else to remember: there is little reason for any student to have student loans when finishing a bachelor\u2019s degree, especially the child of a physician. Certainly, there is no reason for the physician to take on additional debt to pay for school. If the college cost cannot be covered with savings and a 529, the earnings of the child, and the earnings of the parent, consider choosing a less expensive school.<\/span><\/p>\n

Financial Planning for College Education<\/span><\/a><\/p>\n

Understanding UMGA and UTMA Accounts<\/span><\/a><\/p>\n

Ways to Lower the Cost of College<\/span><\/a><\/p>\n

How 529 Plans Are a Fantastic Tax Break<\/span><\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n

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What is the best way to give to charity?<\/h2> <\/div>\n
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Giving to charity should be one of the financial pillars of a high-income professional, and there are a number of ways to do it. You can use a Donor Advised Fund, you can open a private charitable foundation, you can endow a scholarship, and you can send money to charity through a trust. There are all kinds of tax benefits for giving to charity, but the most important element is that you\u2019re actually doing it in the first place.\u00a0<\/span><\/p>\n

Tax Benefits of Donating to Charity<\/span><\/a><\/p>\n

How to Endow a Scholarship<\/span><\/a><\/p>\n

Should You Use a Donor Advised Fund?<\/span><\/a><\/p>\n

What Are Qualified Charitable Distributions?<\/span><\/a><\/p>\n <\/div>\n <\/div>\n<\/div>\n\t<\/div>\n<\/div>\n\n