Financial Therapy with Aja Evans | White Coat Investor (2024)

Transcription – WCI – 330

INTRODUCTION

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 330 – Financial Therapy with Aja Evans.

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QUOTE OF THE DAY

Our quote of the day today comes from Amelia Earhart who said, “The most difficult thing is the decision to act. The rest is merely tenacity.” I like that.

All right. Well, welcome back to the podcast. I don't know what you're up to this summer, but I'm recording this in between a bunch of really fun adventure trips. We had to make some changes in our trip last week. We're going to spend four days climbing in the Tetons with our 14 year old. But the forecast changed such that there's going to be six inches of snow when we were trying to summit the Grand Teton.

And so, we actually went to Zion National Park and descended Imlay Canyon, which was a long day. And then came back to the Tetons at the end of the week when the weather got better and had to climb the Grand car to car in a day. That's ended up being about 7,800 vertical feet according to Strava, over about 16 and a half hours. So, it was a pretty good day as well. But we had beautiful weather up there. Still a little bit of ice on it as we came down, but everybody was able to do so safely.

There was an incident up there on the Grand Teton that day. Somebody got hit in the head with a rock and there was a trauma surgeon up there sitting with them while they're waiting to be helicoptered off the mountains. So, thanks for what you do. Whether it's in the hospital or whether it's out in the boondocks, your skills and knowledge are valuable.

All right, by the time you hear this, it'll be the end of the month. I've got another big adventure planned. Hopefully the weather will hold and will be successful. We’re going back to or going to Yosemite. Our trip earlier this summer got rained out, so hopefully this will work out next week and I'll be able to tell you all about it when I record podcasts again.

But in September, we're going to start opening up early bird pricing for WCICON24. That's September 12th, and you can sign up for that at wcievents.com. The speakers have been announced. We got some awesome speakers coming and it's going to be a lot of fun. You've probably heard of Paula Pant. She's going to be doing one of our keynotes this year.

But we got a whole lineup of awesome speakers and we're going to be in sunny Florida next year. So, if you're interested in joining us for WCICON24, it's always a wonderful time. We'd love to have you. By the time you hear this, you've got less than two weeks before registration really opens.

Don't forget that this podcast is driven by you and we want to be answering the questions that you have. We want to be addressing those topics you are most interested in. Probably the easiest way to do that is if you leave us a Speak Pipe. This is a 90 second recorded message that you can put at whitecoatinvestor.com/speakpipe and record your question.

We play it on the air and try to answer your question as much as we can. Give as many details about your situations as you can, of course, so we can give more detailed answers. But don't leave us five Speak Pipes. No one wants to listen to that. So, you got to be a little bit concise in that respect.

GUEST INTERVIEW WITH AJA EVANS

All right, we have a great guest today. I'll introduce her once I get her on the line. But I think it's a really important topic because there are so many parallels between behavioral finance and therapy and how we live our financial lives. So, let's get Aja Evans on the line here.

Our guest on the White Coat Investor podcast today is Aja Evans, who is a financial counselor, financial therapist for lack of a better term, and that is why I was so excited to bring her on the White Coat Investor podcast. Welcome to the podcast Aja.

Aja Evans:
Thank you, Jim. I’m so happy to be here.

Dr. Jim Dahle:
Let's introduce you a little bit to the audience to start with. Can you tell us a little bit about where you come from, your upbringing, how it affected your views on money?

Aja Evans:
Sure. I am from upstate New York. I'm from Albany. I currently live in a suburb of New York City in New Jersey, but my practice is in New York City. I come from what I would describe as a very comfortable middle class family. Both of my parents worked for the state government. I am private-school educated, which it took me a while to realize that, but I have never gone to a public school.

I have my master's in counseling psychology and then I branched into the world of therapy and have been all over the mental health industry from working individually with kids all the way up to couples, all the way up to people who have lived with severe mental illness all of their lives and might be in a state psychiatric center long-term.

And then kind of changed what I was doing with my career and went into private practice and really niched down into financial therapy because when I had first moved to New York City, I really was feeling the brunt of the expense of living in a high cost of living city and just what it meant for me to think that my money would go further than it actually could.

And a lot of feelings came from that and a lot of questions about my self-esteem came up and I could not fathom that I was the only one going through that. And as I dug around, I realized that I wasn't, and that people needed to have a space and a voice to a lot of emotions and the range of emotions that come up from your lived experience, your profession, socially, what it means to navigate money.

Dr. Jim Dahle:
Now I find when I talk to people that a lot of times their upbringing is one or the other. They either learn nothing about money or were taught terrible money habits by their parents, or actually were given pretty useful tools by their parents and money was not a taboo topic in their home. What was your home like growing up?

Aja Evans:
Yeah. I don't think money was talked about too much. It was there and I knew that the money was there. We lived very comfortably, but I also was able to recognize that my mom tended to be the person who was a saver and a little bit more frugal while my dad definitely enjoyed spending money.

So, there weren't too many arguments that I was aware that were happening with money. But my parents also made the decision to divorce when I was a little bit younger. So, I had the experience of a two income household as well as a single income household with some supports. But I did not financially feel the difference when my parents split, which I definitely think is kudos to my mom because we couldn't tell the difference.

Dr. Jim Dahle:
Yeah. That is actually pretty impressive because I think for most people that's a pretty substantial drop in standard of living.

Aja Evans:
Totally.

Dr. Jim Dahle:
All right. Personal finance is probably 90% personal and 10% finance, meaning that the behavioral issues and overcoming them are 90% of being successful. For example, people don't get into credit card debt because they can't do the math showing that if they borrow at 15% or 30%, that's a stupid thing to do. They get into it because of their bad financial behavior.

I wanted to bring you on the show because you take a totally different approach than most financial advisors. You don't come into coaching, advising, therapy, etc, from a finance background. You come into it from a therapy background. And can you explain to us why that's beneficial?

Aja Evans:
Sure. Like you said, I'm coming at it from a therapy background and taking a more therapeutic approach of just understanding how your lived experience, how you were raised, the household you were raised in, how those thoughts, beliefs, and narratives really impact what you do with your money.

A lot of times people don't realize that by the time we're seven or nine, our beliefs about money are pretty solidified. And that's very, very early. That is before most of us are navigating money in any kind of way. Usually before we're even thinking about making our own money, what it means to spend it and how was it talked about and looked at in your household really impact not only what's going on in your life as a child, but then when you're an adult and you are making money or navigating money more regularly, what you do with it.

And to your point, behavior is such an important aspect. I always say that money is not about the numbers. It's not about the math. We know one plus one equals two. We understand what it means, but what we don't really take the time to dissect is how we feel about money. What are the behaviors that we are using money to help us cope with or not cope with? And how does that interact with what our financial priorities are?

Dr. Jim Dahle:
So, it's cognitive behavioral therapy. As we step into the medical realm that we're essentially learning how to think differently in a way that will make us more happy and more successful. Is that right? Is that what you're doing with your clients? Is cognitive behavioral therapy?

Aja Evans:
Yes. Yes. Most of my approaches, if I had to go the theory route, I definitely use CBT, I definitely am a psychodynamic therapist. I do believe in going back and understanding what your patterns are and how that impacts your behavior today. I think that's really important.

When I'm doing financial therapy with my clients, I am strength-based, I am person-centered. So, there's some Carl Rogers in there a little bit too. I think with the mix of all those theories, it just creates my special brand of therapy, if you will.

Dr. Jim Dahle:
Now I talked to a lot of financial advisors and they're surprised because they come into this because they love investing. They love the numbers, they love learning the little tax tricks and sharing them and teaching them. And then they find out that most of what they do is marital therapy.

Aja Evans:
Yes.

Dr. Jim Dahle:
Why is that such a big deal for anybody giving any sort of financial advice? And should that be a required part of a CFP certification to take a class in marital therapy or something?

Aja Evans:
Yeah. I actually think the CFP have introduced the psychological aspects of money recently into some of their knowledge base that needs to happen for people who are getting certified. So, that is a big win.

I would say that looking at communication is really, really important. A lot of people do not talk about money before they make the decision to get married. And that can come with some hard conflicts and some hard conversations when they do have to start beginning to whether it is choice to combine finances or have joint financial priorities or figuring out what their goals are or just kind of everyday spending.

Sometimes people have different habits and priorities. So, when you are married and having these conversations, sometimes for the first time with your financial advisor it can get really complex and emotional and heated. And I don't think people always give enough time and enough space to say, “Oh, this is emotional for me. I know I'm doing this because of my insight into my behavior in terms of where I came from or my upbringing.” And that can come in many different shapes and sizes and examples.

Dr. Jim Dahle:
I often see a question on a forum or by email and I start thinking about it and I'm like, “This isn't a finance question. This is a relationship question.” If you're unable to resolve this between the two of you, a marital therapist or a marital counselor is probably the place to go rather than in a financial forum on the internet or a financial advisor. How can people know when an issue is more relational than financial?

Aja Evans:
Yeah. When it's financial, it is about the numbers. It's about so much more, but it is about the numbers. If you find that it is getting very emotional every time you talk about it, that is kind of a sign that we need to start getting to some of the deeper roots there.

If you find that there's a pattern of feeling like the bad guy or feeling like you're always bringing it up or feeling like somebody is avoiding it, or you are avoiding it. Just feeling for whatever reason you two cannot get on the same page, I would definitely say that's the time to talk to a marriage counselor or talk to a financial therapist and just start to have some of these conversations of why is it so hard for us to begin navigating conversation and communicating around money. What's coming up for either one of us?

I would say, of course, you might talk about it a little bit with your financial advisor, but when you want to start getting into some of the nitty gritty or some of the harder life experiences that you've had, that's definitely the time to seek out some professional help in terms of a therapist or a counselor to really start dissecting where that emotion is coming from and how it might be playing out with your money.

Dr. Jim Dahle:
It's much less so these days, I think, than even 10 or 20 years ago, but therapy often has a negative connotation, that there's something wrong with you. It's kind of a brag to say, “I'm going to see my financial guy”, or “I'm going to go see my financial advisor”, but maybe not so much to say, “I'm going to go see my financial therapist.” How do you and your clients deal with that negative connotation in society of seeing a therapist?

Aja Evans:
Yeah. Well, I think I'm lucky enough to have clients who really want to be in therapy. I think there's a level of stigma that is dropping down when it comes to therapy. My clients love to tell people that they're in therapy, like, “Oh, my therapist said”, and “Oh, this is what happens.”

I do think times are changing, but to your point, it can be really complicated for people to just share they're in therapy because of the connotation of something's wrong with you or that you're doing something wrong or you need extra support.

I think everybody needs extra support when it comes to their emotions. A lot of us don't have the outlet to have a conversation and really be honest with ourselves about how we feel and where we're coming from.

Then you add the extra layer of money on top of it and people are like, “Well, what's going on with your money? What's wrong? What's wrong with you?” Same connotations that lead to the stigma when really it's like, “Well, you have feelings about money, too. Are your feelings about money all positive? Does that feel great?”

And I think when we start getting to that, we're taking back the taboo, we're removing the isolation, removing some of the shame, some of the embarrassment that can come up for people with money, which a lot of times people just kind of sit and suffer in silence, or do their research on their own, secretly on the phone or in the bed at night time without being able to tell everybody, “Hey, yeah, I'm talking to a financial therapist because I make a ton of money, but sometimes I feel weird about it. Sometimes I'm uncomfortable that I make more money than my parents, or I make more money than my friends. Or I feel like I should know what I'm doing with my money and I don't.” That puts people in a really vulnerable position and sometimes you need to have a conversation and get some support around it.

Dr. Jim Dahle:
I'm an emergency physician. I take care of whatever comes through the door. But the truth of the matter is I spend about 90% of my time taking care of five or six things. People with chest pain, people with abdominal pain, people with shortness of breath, people with altered mental status, maybe people with suicidal ideation. Now that's what I take care of in the emergency department. That's the bread and butter.

I'm curious what the most common behavioral issues your clients deal with are. What are you helping them with? What are these issues that they're struggling with when it comes to their finances?

Aja Evans:
Yeah. I would say some of it is people feeling uncomfortable or shameful about past financial decisions or current ones. So, if people have a lot of debt and they are uncomfortable with it, whether it's warranted or not, and I will most likely say it is not warranted for you to feel shameful about your debt. But sometimes getting over those mistakes are hard for people. Sometimes getting over what the number says is hard for people.

So, looking at that is definitely one. I would definitely say people are either overspending or they're underspending and that makes them really uncomfortable. It could be “I am shopping too much and I don't know why, but I make a lot of money and I can shop, but it doesn't feel like the rest of my money is working for me the way I want it to. Or I make a ton of money. Things are going really well, saving, but I'm not enjoying my money.”

And I think underspending is a chronic issue for people that we don't really talk about because it's under the guise of, “Well, I'm doing the right thing by my money” and you are, but you also should be enjoying it.

One thing that I think about all the time is how often people work for a long time or have done a beautiful job of saving money and they finally get to whether it's FIRE or whether it's you were able to retire after a long, beautiful, prosperous career and they don't know how to spend their money and they don't want to, and they feel guilty. And that to me is tragic. And that also requires taking the time to rewire how you think about your money and allow yourself to spend it.

And then the last one I would say is just navigating the social relationships that come up with money or lack thereof. I gave the example of people feeling uncomfortable around potentially making more money than their parents or potentially making more money or less money than some of their friends. And how do you navigate wanting to potentially help out your family or your friends, but also wanting to make sure that you're not being taken advantage of or that you're not feeling uncomfortable in different social settings.

Dr. Jim Dahle:
Yeah. Let's talk a little bit about that. What are some tips you'd give someone that they make more than all of their friends and family, maybe they're a multimillionaire halfway through their career already and it's hard to know how to interact with those other people in their lives? What tips do you have for them?

Aja Evans:
I would say the biggest two things are communication and boundaries. Communication starts with having the conversation. It is, as we know, hard for people to talk about money.

And I'm not saying that you need to disclose all of this information about your financial setting, but I am saying that you need to have a conversation about, “Hey, that feels really comfortable to me, or this that doesn't feel comfortable to me. I want to do this for you. I can't do this for you. What is going on for you? Or let's talk about it. Yes, all the things are true. I am doing really, really well in my career and I am a doctor and I worked really hard and I am potentially making hundreds of thousands of dollars a year.”

People will look, you can find things on the internet very quickly. But bringing it into the room and saying, “Yes, sometimes this does make me uncomfortable, or I'm not sure how to navigate this. How can we move forward together?” And having that conversation again when you feel comfortable and you feel okay getting vulnerable with some people. But when it comes to money, we kind of have to get vulnerable to take it out of the shadows and remove the shame from it.

And then when it comes to boundaries, really deciding what you're willing to do for people financially, what you're willing not to do financially, and just deciding, “Hey, that doesn't feel comfortable for me. That's not a priority for me right now. Me and my family are trying to do X, Y, Z.” And just figuring out what your own boundaries are so then you can communicate them effectively to other people.

Dr. Jim Dahle:
I like that. I like the idea of communicating boundaries. I find it very interesting, I've said to people beforehand dealing with this that almost the person with the most money also needs to have the most emotional intelligence to be able to navigate this sort of a situation.

For example, people don't want to be given handouts. They want to be able to carry their load and pay their way. And sometimes it's easier if you use something to the effect of “I paid for this with miles.” And so, it doesn't feel like one person's paying, the other isn't. It feels like they're both getting something for free in those sorts of situations and how it's approached.

Let's talk a little bit more about underspending. I've often told people that there's five money activities they need to get good at. Earning, saving, investing, spending and giving.

And spending is hard for a lot of people that are natural savers, it's really difficult. They can spend more money, but it's not necessarily on something that's making them any happier. And so, it's more work, I think, than people realize to spend money.

And sometimes I choose not to spend money just because it's a lot of work to go do the research and the shopping to spend it well. What tips do you have for those of us who are under-spenders?

Aja Evans:
Yeah. Well, I think to your point, what brings you joy? What are the things that light you up that you are really excited about? And are you allowing yourself to spend on those things? I think the idea of spending people look at it as, “Oh, I'm buying five black sweaters and I'm always rolling around in a brand new car.”

It doesn't need to look like that. It can be “I love to go to vacation in the Adirondacks, so I am making sure that me and my family are going to do that on a regular basis. And maybe I don't want to go only once a year. Maybe I want to go twice a year. So I'm going to make sure that we have enough space when we go up there to maybe invite some friends when we go that we really love spending time with.”

Looking at it as, “Hey, what are the things that really bring me joy?” And do those things. That's really important. And remind yourself when you are spending the money because sometimes things can come with a hefty price tag and that can feel uncomfortable.

But reminding yourself, “I am financially stable.” Do not buy anything expensive if you're not financially stable, let me just say that. “I'm financially stable. My income or my net worth or my savings or my financial priorities are not going to change because I did this.”

And tell yourself. Sometimes you have to say it out loud, almost like an affirmation. Remind yourself when you're going through it, “I am okay. I am enjoying my money. This is important for me to enjoy my money. I am doing everything that I want to do in terms of my financial priorities. We can do this.”

And that reminder will help you get a little bit more comfortable each time when you do things. But I definitely don't want anybody depriving themselves of joy and things that they enjoy. It could be anything, food. If it is clothes, beautiful. I love that for you. If you can afford it, get it. But it is hard at first.

And I think people need to remind themselves that they are okay when they do some of the spending. You are not going to go and blow your emergency fund or dip into your investments and pull them out. That's not at all what's happening if underspending is your issue. But taking the time to just remind yourself, “Hey, I can afford this. This is not going to hurt me financially to do this because I love it.” And that's okay.

Dr. Jim Dahle:
I think it's helpful to remind people that there are seasons in life. And once a season is gone, an opportunity that belongs to that season may also be gone. You only get so many summers with your kids, for instance. And there are some activities, some spending activities that belong to certain seasons. And if you get past that point, you can't really go back and have that experience.

People backpack Europe when they're 20 and they stay in hostels and it's a great experience. Well, guess what? I'm not going to go do that. I'm 48. I'm not going to go stay in hostels in Europe. That experience is gone. I missed it. I missed it. I didn't go. I didn't have the money, but I didn't go. I totally missed that experience. That season is gone.

I look at other things. I saw a patient in the emergency department yesterday whose feet were killing her. She quit halfway through a trip to the UK. She was visiting all kinds of sites in the UK and her feet were killing her. She came home 10 days early. She's 74 years old. If she had gone and done that trip a decade earlier, maybe her feet wouldn't have been bothering her quite so much.

And so, you got to realize that there are some spending that has to be done earlier in life. And if you put it off too long, you can't do it. And you won't get the joy from that experience and you've missed it. And I think reminding yourself of that will help an under-spender to spend when it's time to spend.

Aja Evans:
Totally. And I couldn't agree more because actually that story really resonates with me because I did quit my job and go to Europe and backpack. My best friend who I went with had a backpack. I had a very small carry on that I was rolling around with, but we were staying in hostels.

I think I was 26 and I didn't really have the money to be able to do it, but I had saved a lot. And I made it work very much though on a shoestring. But that was 10 plus years ago. I could never now. I'm like, “What do you mean you want me? I've got children. We've got other priorities. That's a lot of time.” I could never, I went for three months.

And you're right. I look back and I think to myself, “Aja, what could you have done differently in your life financially?” And going to Europe is never one of the things I'm worried about. Never. It's never one of the things I'm like, “Oh, I wish I didn't do that.” I'm so proud of myself for being brave enough to say, “Okay, this is going to be a little financially tight, but we're going to make it happen because this is important to me.” So you're right, you're totally right.

Dr. Jim Dahle:
Yeah. We had a speaker at our conference, Stacy Taniguchi, who reminded people that they should be living a life that they'd be willing to live again.

Aja Evans:
I love it.

Dr. Jim Dahle:
This perfect life where you thrive. And so, we ought to be thinking about that. Is this a life that I would live over and over and over again for eternity because I'm maximizing the joy and experiences that I have in it? And that may help you to spend as well.

Let's look at the other end of the spectrum though because I think it's a lot more common. Even in our community of people that are interested in finance, people that have a relatively high income, this is still probably more common. And you said in an interview a while back, you said people in their 30s and 40s feel like they're underneath the mark of where they should be in terms of having saved for retirement. They have a lot of shame, a lot of guilt about not having saved enough.

And I've run into this as well. Docs coming into me at 40 saying I'm behind financially. Where does all this guilt and shame come from? Because sure, some people are behind. If you come to me at 55 and you got nothing saved for retirement, you are behind. But a lot of them aren't actually behind.

Some of them are even ahead, but most of them are kind of average right on track, but feel behind. It's like they're only looking at the people doing better than them and not realizing that they're ahead of 80% of the world or 80% of even their peers and colleagues.
Dr. Jim Dahle:
Where does that come from? Why do people feel like they're behind when it comes particularly saving for retirement?

Aja Evans:
Well, I think there are a few things. I do agree with you totally when you say that comparison. You're only looking ahead, you're only looking at people who have more money, have more money in retirement, or are making more money.

It's going to be really difficult to be proud of where you're at when you feel like you could be in a different place. “Oh, I could have done better. Oh, I should have done better.” That cycle of emotion, negative emotion, can really spiral you down into dark places and feeling really stressed out and anxious, which does not help people at all.

And also after that, I would say to your point of that we made earlier is looking at education. Sometimes you just didn't know. And it's really easy to beat yourself up about the past when you know now and be upset with yourself about, “Well, I just didn't know.”

You have to give yourself a little grace and understanding that you were still learning, you were still growing, you probably had a ton of things going on. Whether that was for school, professionally, personally, just socially. Just figuring out everything.

Sometimes it just takes us time and we have to give ourselves a little bit of grace to understand, “Yes, if you had known, you may have been in a different position, but it's not going to serve you to beat yourself up about it or feel bad about it anymore. You can only move forward and forgive and release some of that guilt and shame that comes from not knowing earlier.”

And then I would also say that sometimes we see these numbers in the media and feel like, “Oh my God, I could be here or I could be there. Why is this not happening?” And you feel really bad, there's a lot of guilt, there's a lot of shame about money just in general.

Whether you're doing the best job or not, I think everybody wants to do the right thing for themselves and for their family. And I don't think we give ourselves enough credit and enough praise to say, “Oh, I am doing it.” Instead you're like, “Well, that's the number and I'm supposed to have this much money before I'm this age and I'm not there yet. I'll never get there.”

And then we're spiraling, then we're activating our bodies, then we're upset, we're stressed out, we're triggered. And then typically people don't make the best decisions during that time because you're trying to regulate and get more comfortable, where sometimes it takes a little bit more time.

Dr. Jim Dahle:
Yeah. I think for sure, especially for our primary audience who are doctors. This is part of the deal. Yes, part of the financial life of doctors that for most of your career you'll have a pretty high income. But there's two other things that come with that, that is part of the financial life of a doctor. One of which is you're going to start in the hole. 75% of docs borrowed to pay for medical school. You're going to start in a hole and that hole is often $100,000, $200,000, $400,000, $500,000 in the hole. That's your net worth when you come out of school.

And the other part is the late start. The late start is just part of it. You're not going to be saving for retirement at 22 when you're a doctor. You're doing great if you're putting something away for retirement at 32, but it's not unusual at all for you to be in your late 30s or even your early 40s before you really get serious about saving for retirement. That's par for the course for this kind of unique financial pathway that doctors have.

But boy, you'd think that it was the end of the world if people have a net worth of $100,000 at 40 if they're doctors, because they look around, they see these docs, they got into FIRE halfway through residency, and they're like, “Wow, they're already financially independent in their early 40s, and I'm just getting started.” But they got to realize that's normal.

Aja Evans:
Right. And it takes time. It takes some time to just realize. Listen, I'll tell anyone, when you have gone through as much schooling as doctors have, you need some time to just kind of level set and just say, “Oh, you know what? I can go out to dinner.” Not only because I have the money, but now I have some time to go out to dinner and just experience things. And that does not mean that you cannot give yourself some time to just, “Wow, I work so hard, I just want to enjoy myself and enjoy my money.”

That doesn't mean you need to spend all of your money. It could mean you might be putting a little bit into retirement and then in the following years you can kind of decide if you can afford to tailor it back what you are spending and then throw a ton at retirement.

But if somebody decided, “Hey, I got out of school, I did residency, I did the things, I'm a doctor, I'm still living on insert salary here when I'm making maybe double, triple, quadruple that amount.” Good for you. But not everybody is ready to make that level of sacrifice. So, we have to be kind to ourselves and figure out what makes the most sense for us.

What I'm able to do right now, having a mortgage and two kids is very different than what I was able to do at 26, quit my job and go backpack around Europe for three months. That is just not an option.

So, thinking about where you're at, what your priorities are and what do you want to do, and also where you live too. I live outside of New York City. It's extremely expensive. I could probably buy two or three houses in upstate New York if I decided to move home. But it was a priority for me to be here. So, thinking about what your priorities are, making peace with them and not guilting yourself or feeling bad that that's what your priority is at the time.

Dr. Jim Dahle:
Yeah, that's a good segue. You're down there practicing around Manhattan, living around New York, New York City. That's a particularly expensive place to live.

Aja Evans:
Yes.

Dr. Jim Dahle:
And I suspect given that that's where you are, many of your clients are also there and there's other expensive places in the country. The Bay Area is expensive, Washington DC is expensive. There are other areas around the country.

But can you talk a little bit about how we think about finance? What's different mistakes people make when they're living in these high cost of living areas? How does this affect people financially? And also maybe when should someone consider leaving a high cost of living area, primarily for financial reasons?

Aja Evans:
It is very expensive. You're right. And not just to live. Yes, you can talk about the rents being expensive, real estate being really expensive, it is, but also there are other things that are going to be more expensive too. Owning a car, driving a car might be more expensive. The tolls might be more expensive when you're coming in and out of the city if you're driving as well as childcare.

Thinking about certain aspects of your life are going to be more expensive in a high cost of living city. And you have to really think about “Is this something I really am okay with the trade off because of that?” If you can find all of the things that you want and require of where you live in a more cost effective place, do you want to move there? Do you want to live there? What's the difference? Would you be comfortable there? And for some people, the answer is definitely yes.

In that case I'd say, okay, if you're ready, move, definitely do it. But for some people, the answer is no. And deciding what are your trade-offs and what you're not willing to give up, what you're not willing to sacrifice where you live, I think is going to be really important.

And taking the time to just decide, “Do I have to live here? How is this feeding me as a person? Is this making me stressed out? Do I not want to deal with the hustle and bustle of New York or riding a subway? Or what do I actually want this to look like?”

I'll take myself as an example. I lived in Brooklyn and we were renting in Brooklyn. And when we decided, “Hey, we want to look at expanding our family”, I knew I did not want to be in the city directly. And neither did my husband. He's like, “I want to own our house if we're going to be having children, that's really important to me. I don't want to have to worry about somebody selling the building or changing or renting or something like that.”

And I was like, “Okay, we cannot afford to buy what we would want here.” I wanted outdoor space, I wanted a driveway, and that would be literally millions and millions of dollars for what I wanted in the area that I wanted it. I was like, we got to look somewhere else. So we did, and now we've made sure that our proximity to the city is of that, that we feel comfortable with because we didn't want to leave.

I think it really is just the priorities that you have as a person and as a family, and how do you want to take advantage of that in the city or elsewhere. What's important to you? And then decide.

But if you find that you are going into debt or not making your bills, or you're not making your financial priorities the way you want to, or at a pace that feels comfortable to you, that would be a time to start looking at, “Hey, are there other options that we'd be comfortable with? How can we do this cheaper? How can we do this in a way that feels more financially comfortable to us?”

Dr. Jim Dahle:
Drive till you qualify. That's what a lot of people do. The problem with that is it starts introducing a commute, which studies show is one of those things that out of everything in your life is likely to make you unhappy is a long commute when they study these things.

In some ways that works, in some ways it doesn't work. But it's always a trade off. And people write to me all the time that live in the Bay Area or wherever and they're like “My family is here. I really like it here. I like people here. I like the weather here.” Whatever. And it's a trade off. It might mean your career is five years longer before you're financially independent. And if you're fine with that, it's a great trade off. Or your house is smaller, or you got to keep your cars longer, you got to go on vacation less often or whatever.

It's almost a double hit for docs though. Because unlike most people, most people when they go and they're in the Bay Area, they get paid more or if they're in Manhattan, they get paid more. And so, that helps make up for a lot of the difference in taxes and in the cost of living.

And it's not always the case for docs. Sometimes you get paid less in these high cost of living areas. So, not only does leaving give you lower expenses, it also gives you higher income, which really makes docs have to think a lot about how much they love being in that area.

Aja Evans:
Yeah. Or how long, right? It doesn't mean you don't have to ever live there. It just might mean, “Hey, I'm only going to live here for a certain period of time, or during this phase of my life to your point of a season. In this season of my life, this feels more comfortable for me. And in my next season, it might mean that I want to look elsewhere or just explore what the options look like.”

Dr. Jim Dahle:
Yeah. Let's talk for a little bit about anxiety. And I've often thought that anxiety is the most expensive medical condition out there because you end up seeing doctors more, you get more procedures, you have more tests done, you take more medications. It can be a really expensive medical problem for somebody that doesn't necessarily have anything physically wrong with them.

But let's talk about financial anxiety. What percentage of people do you think have financial anxiety?

Aja Evans:
Oh boy. I would love to see the research on there. This financial wellness research, there's space to improve. But to me, financial anxiety, most people. I'm going to go on the line and say…

Dr. Jim Dahle:
A majority.

Aja Evans:
Majority of people.

Dr. Jim Dahle:
How should people deal with that? Presumably that means tens of thousands of people listening to this podcast have some level of financial anxiety. What can they do about that?

Aja Evans:
I blame it on my day job. I'm always going to say we have to get to the root of what it is. And I say this knowing that it does not matter how much money you're making. You can be financially anxious making all of the money in the world and making no money.

I think it's really important for people to realize it's actually not about the number. Financial anxiety is coming from a discomfort that's coming from your money. Whether that means, “Hey, I'm not making enough to live in New York City or live in the Bay Area and I want to live here.” I can be anxious from that. Or “I am making enough, enough money, but I'm not doing the right things with it and I don't know what to do and I want to do them, but where do I start?” Anxiety can raise.

It really just runs the gamut. And what it is, is that stress and worry lead very quickly to anxiety. When you find that you are ruminating over things or losing sleep over things, or just cannot stop thinking about it, that is interrupting how you function in your money thoughts and your money behaviors and financial behaviors are causing you stress and concern on a regular basis. That would be the difference.

But I say most people have financial anxiety because it's not just about one aspect of it. I have some people that I see who are actively working towards FIRE and doing some risky things to get there. They can afford the risky things but they're putting that into that strategy, but that is increasing their financial anxiety because of the risk. They're in a good financial position by American standards, but because they're like, “Okay, I'm going to try this new thing. I do have the money and the space to try, we're going to see how it goes.” But the financial anxiety may go up.

I think it's common because it touches on so many different aspects, whether it's your behaviors, how you feel about your money, you're making enough money, you're not making enough money. It just kind of runs the gamut.

Dr. Jim Dahle:
Somebody's sitting out there going, “I need some professional help. I need someone to help me with my money.” Who should consider seeing a financial therapist instead of a more traditional financial advisor?

Aja Evans:
I will say in terms of a financial therapist, there's a spectrum. There are people who are financial professionals who are certified as financial therapists. And there are people who are like me, who are coming from the mental health industry who are financial therapists. So, you have to decide what you need and what you're looking for.

I am not touching anybody's investments. I am not looking at those types of numbers. I will look at the things that I feel comfortable looking at, which are looking at what's your budget? Where are you spending your money? Where does your budget tell us your financial priorities are? What your debt is? Those are things that I feel comfortable looking at and having conversations.

But the second we start shifting beyond that, I'm here for your feelings. I want to be here for your lived experience from your foundation, your potential financial traumas, financial anxieties, financial stressors, and how you feel about your money.

And the second you want to go into “Do these investments make sense to me? Is this strategy good?” That is outside of my scope. That's when you can really start talking to a financial professional. But if you want to dive into the emotions and dive into some of the discomfort, if you feel yourself getting sweaty when you're checking your bank account, if you find that you're losing sleep, thinking about are you doing the right thing? Things that are more psychological and emotional than I would say talking to a financial therapist is the route.

Dr. Jim Dahle:
Awesome. Well, our time's getting short, but I wanted to give you a chance to throw something out there that we haven't yet talked about. By the time this is said and done, 30,000 or 40,000 people will have listened to this podcast. What else do you think our audience should know that we haven't yet talked about today?

Aja Evans:
That you're just not alone. Like I said, it really doesn't matter how much money you're making. People feel weird about money in general, and they feel even more uncomfortable talking about it. And it's spaces like this that really help people feel less shameful and less by themselves and isolated when it comes to “I shouldn't feel like this.” So, you're not alone. Other people feel like this. It's totally normal. We all have to navigate money in one way, shape, or form, and that is emotional and that's okay.

Yeah. That's pretty much it. I'm writing a whole book on it which will be hopefully towards the end of next year. But yeah, we can always talk about it. Always.

Dr. Jim Dahle:
Cool. And if people want to get in touch with you, what's the best way for them to do that?

Aja Evans:
Sure. On my website, which is ajaevanscounseling.com, or I hang out on Instagram, @ajaetherapy and I'm also kind of dabbling in TikTok. So, we'll see.

Dr. Jim Dahle:
Awesome. Well, thank you so much for coming on the White Coat Investor podcast and sharing your expertise with our audience.

Aja Evans:
Absolutely. Thanks for having me, Jim. This was a pleasure.

Dr. Jim Dahle:
All right, I hope you enjoyed that interview. As I mentioned at the beginning, this is important. Behavior matters, how you feel about money matters. Success is less about the math, it's less about the dollars and cents than it is about changing your behavior when it comes to money. And it's hard to change your behavior until you understand how you feel about money and how your actions with regard to it are affecting your happiness and your financial situation.

SPONSOR

This episode was sponsored by Pattern. At Pattern we help thousands of doctors learn about the importance of disability insurance. We understand that this is something they need to check off their list, but we're here to help you obtain the right policy at the right time. Thousands of doctors have trusted us with their financial future. We hope you will too.

Here's how our simplified process works. One, request your quotes. Two, compare your options in a short meeting with one of our expert sales advisors. Three, buy risk-free. Request your quotes today at whitecoatinvestor.com/patter.

Don't forget, September 12th, we're going to be opening up WCICON24 registration. We did not sell out last year, but we may this year. We're in a different location, first time we've been on the East Coast and we'd love to have you there. But who knows, this may fill very, very quickly.

Don't forget to leave us Speak Pipes if you want us to answer your questions on air. That's whitecoatinvestor.com/speakpipe. And thanks also for those of you who have been leaving us five star reviews and telling your friends about the podcast.

A recent one comes in from Alpheus06 who said” Amazing podcast. I am generally not a podcast person, but have never missed an episode of this podcast. Between Dr. Dahle’s blog, podcast, and books, I have gone from financially illiterate to comfortable managing my own finances without a financial advisor.

The content is listener driven and covers topics of varying complexity, so people at all levels of financial literacy are able to learn something from each podcast. I find myself just as interested in his content now as I was 6 years ago when I first found his blog. If you haven’t listened yet, get started now!” Five stars. Thanks so much for that great review.

All right, we're at the end of the episode. I know it's sad, but don't worry. There'll be one next week. These drop every Thursday and of course, our Milestones to Millionaire podcast now with some additional information, including all of them, kind of a little bit of a back to basics kind of series drop on Mondays.

Until then, keep your head up, shoulders back. You've got this and we can help. 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.

Transcription – MtoM – 133

INTRODUCTION
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 number 133 – A CRNA becomes a millionaire.

Getting quality disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state or health status and 1 in 7 doctors get disabled at some point during their career.

Because these policies can only be purchased through brokers, we have put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart.

If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list at whitecoatinvestor.com/insurance and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this and the white coat investor can help.

All right, we got a great interview today. I think you're going to enjoy a lot. We have a new millionaire among us in the White Coat Investor community and we're going to be talking to him shortly.

Afterwards, stick around. I just got off the phone a few minutes ago with a disability insurance agent. I think I have a few pearls to share that would be worth hearing. We're going to talk a little bit about physician disability insurance afterward.

GUEST INTERVIEW

All right, our guest today on the Milestone to Millionaire podcast is Matt. Matt, welcome to the podcast.

Matt:
Thank you. I appreciate you having me very much. I'm a fan.

Dr. Jim Dahle:
Awesome. Well, tell us what you do for a living and how far you are out of school.

Matt:
I'm a CRNA. I'm an independent loc*ms provider. I've been that way for a couple years. I graduated in 2010 from anesthesia school.

Dr. Jim Dahle:
Okay. So you have worked in where through this loc*ms? What parts of the country have you worked in?

Matt:
Well, it's funny, all local actually. It’s called loc*ms, but I'm not on the road much. About the furthest I travel is about an hour and 30 from my house. I found that's about as far as I can go in a day and still be safe on the road.

Dr. Jim Dahle:
In southern California that's considered a normal commute .

Matt:
Right. And I'm from California, so it doesn't bother me at all.

Dr. Jim Dahle:
Okay. Well, you have recently become a millionaire. Congratulations.

Matt:
Thank you. I appreciate that. On paper, of course.

Dr. Jim Dahle:
Yeah. So, what was your net worth when you came out of school 12 years ago?

Matt:
I was negative. In fact, I wrote it down because I took notes before you called. I was negative $250,000 roughly.

Dr. Jim Dahle:
Okay. A swing of $1.25 million in 12 years. Pretty awesome.

Matt:
$1.5 million almost now at this point. Yep.

Dr. Jim Dahle:
Okay. Okay. It took us a little while to get you on after your application it sounds like. So, how's it all breakdown now? Tell us about your assets. Tell us about your liabilities.

Matt:
My only liability is the home note. I've got about $320,000 left on that. And then I have one car note and that's temporary just until I get another car sold and get my tax rebate. I bought an EV, I took the plunge.

Dr. Jim Dahle:
Which one did you get? Tesla Plaid Plus Plus Plus?

Matt:
No, I did not. I went Tesla Y. I did go performance though. I can't lie on that one.

Dr. Jim Dahle:
All right. All right. So, what's your zero to 60?

Matt:
Three and a half.

Dr. Jim Dahle:
That's fun. It's better than an amusem*nt park ride. All right, this is cool. Tell us about this. You have a couple of pieces of land I understand. Tell me about the assets here.

Matt:
Yeah. My biggest asset obviously is the home we live in. Hopefully that won't be forever, but we're at about $900 with the place we're at. We live out in the country. We bought in a subdivision near a lake kind of deal. I bought two lots back to us that we just got for a pretty good price. How about that? And we're sitting on those two lots for now. We may or may not build on another one because my wife and I are in like 3000 square feet. Just us and the boys, the dogs. So, we're probably going to downsize and then use the equity in here to just roll back over into investments.

Dr. Jim Dahle:
Okay. So, tell us about the investments.

Matt:
I'm primarily in Vanguard. I have a rollover traditional IRA and then I can't say smart enough. I was told about it years ago when I first started anesthesia. “Hey, do a Roth while you still can when you're in that tax bracket.” So, I started a small Roth then.

I've got $40,000 in the Roth and $100,000 and something in the rollover. And then I'm putting about $50,000 a year into my individual 401(k) since I became loc*ms. I've got about four more years of doing that, $50,000 to $55,000 a year into that, and then I can really kind of scale back.

Dr. Jim Dahle:
Okay. So, over that 12 years, what was kind of the range of your income?

Matt:
I started out, I want to say my first W2 was $150,000. Nah, $140,000-ish. And then I kind of maxed out a few years ago. It kind of gradually went up, it was more than inflation, but just enough. I was doing cardiothoracic only, so it was like $230,000 a year after everything was said and done. And that was about four years ago is where I topped out as a W2.

And then pre COVID and right at COVID, I don’t know about your specialty, I'm sure you got a hit, but anesthesia took a huge whack. Bunch of people left. A bunch of just not enough of us. So, the pay rate went up exponentially. It just made sense for me to go 1099. And I'm glad I did it. My gross now is a lot higher than my W2 ever was. But I'm paying myself a salary of $120,000 for tax implications and so on and so forth. And my CPA seems to be comfortable with it so I'm.

Dr. Jim Dahle:
Yeah, that one might be on the border a comfort for me, but I'll let you work that out with your CPA.

Matt:
It is. I've got friends that are a lot lower and I'm like, “Ah, I don't think I want to do all that.”

Dr. Jim Dahle:
Yeah, I would rather feel super comfortable. Much lower as a CRNA.

Matt:
Yeah, for sure.

Dr. Jim Dahle:
Okay, tell us about your asset allocation. It's fairly straightforward I understand.

Matt:
It is honestly. And I kind of put out some of the books I read behind me. I just read and read and read and read and read. Your book's back here, a couple of them honestly. But I just got a place where there was a common theme going through most of the books and kind of the 80/20 split. I didn't want to be whole hog and go 100% in equities.

And again, I'm a neophyte, so take this with a grain of salt. And then I was going to say 20% bonds. And right now where I'm at, I check today and I'm about 85/15. So I need to rebalance a little bit. But that's kind of where I'm comfortable. I'm sure things will change as I get a little older and my priorities change, but that's where I'm sitting.

Dr. Jim Dahle:
Did all of this increase in your net worth come from working and saving? Is your spouse working? Did you get an inheritance? Did your parents give you a bunch of money? Where did it all come from?

Matt:
My spouse works. She's a nurse as well. She has case management. She's in a W2 that case for our benefits, which is great healthcare benefits. And she's got a 403(b) that contributes about $15,000 to a year and gets a match like a couple grand a year.

I am a first generation college, so there's no inheritance. Uncle Sam paid for my undergraduate. And they got their blood out of me, trust me, I got the t-shirt and everything. And thank you for yours as well.

Dr. Jim Dahle:
Which branch were you in?

Matt:
Army. Yeah.

Dr. Jim Dahle:
Army. Okay.

Matt:
I'm a knuckle dragger by nature, I try to keep things very simple. But anywho, I went through a terrible divorce and I was complete ignorant to money beforehand. And I was net negative in hindsight a bunch. Put kids in private school, living the life, buying the big house and everything else. And then during the divorce process I realized, “Man, I'm going to go completely broke.”

I really had to reeducate myself, reorient myself to how am I going to support my kids in divorce and then a life outside of that. So yeah, to answer your question obtusely, it's been just kind of opening my eyes to these books and trying to figure out where I can make gains.

Dr. Jim Dahle:
Awesome. You had kind of an awakening after that. How many years ago was your financial awakening that maybe you got to be saving something and investing it smartly?

Matt:
2016.

Dr. Jim Dahle:
Okay. So, about seven years out from that.

Matt:
When I was like, “You're never going to be able to retire unless you do something about it right now.”

Dr. Jim Dahle:
How old were you in 2017?

Matt:
Well, 41.

Dr. Jim Dahle:
41. Okay. And that was the big wake up. Very cool. Very cool. Everybody has one. Sometimes it happens at 25, sometimes it happens at 35, sometimes it happens at 65.

Matt:
Sure.

Dr. Jim Dahle:
When it happens at 75, it's usually not a very good experience though.

Matt:
Right. I'm glad it wasn't 65. I kind of wish it was 25. I'm sure you never heard that before.

Dr. Jim Dahle:
Yeah, yeah. I hear that from everybody. Of course, most of us are still in school at 25.

Matt:
Well, good point.

Dr. Jim Dahle:
Okay. What's your secret to success? There's somebody else out there that's maybe they just got cleaned out in a divorce and they want to be a millionaire. What would you tell them?

Matt:
There's really no secret. It's grit. I literally at one point was so broke, I was building furniture in my garage and selling it on Etsy and I was a CRNA making CRNA money. I was like, “You know what? This has got to stop. I've got to figure out a better way.” And if I'm going to have any hobbies, those hobbies have to make me money, period. And it wasn't even “I want to be rich.” I just want to eat. That's where that stem from.

And then I guess another secret would be just if you're ignorant, you got to admit it to yourself because it was hard for me. And I'm sure that some people, especially as type A, as most of us healthcare professionals are, it's hard to put your ego in check sometimes. And I was like, “Look, here you go man. If you don't do it, you're not. And it's going to be bad for you.”

I think that recognizing, identifying and saying, “Okay, I have the gray matter between my ear lobes to make this happen.” And reading books. I just literally got online. I ordered every self-financial book I could find. Some were good, some in hindsight were trash.

Dr. Jim Dahle:
I had the same experience.

Matt:
Right, right. And to read a few and to realize that they're trash, you're like, “Okay, I must be learning because I can tell that this actually doesn't make sense in the real world.”

Dr. Jim Dahle:
Yeah. Very cool. So, what's next for you? What's your next financial goal you're working toward?

Matt:
That's funny to ask. I'm trying to get my wife, at her behalf as well. I want to get her in a mobile job so we can start traveling the country after my youngest is out of private school. We're looking at getting into doing some loc*ms work in terms of owning our own small firm. That's my next financial goal is to get an established company in that, work with people I want to work with.

And then really just to plug away these next four years at the same savings rate. And then once that's done, then I can kind of peel it back and hit our goals. I'm not trying to be greedy, but $2.5 million would be plenty for me to retire on. And that's kind of where we're set to hit.

Dr. Jim Dahle:
Cool. So, you're a first generation college you mentioned, right?

Matt:
Yes sir.

Dr. Jim Dahle:
What does your family think? Do they know you're a millionaire?

Matt:
I don't know. I don't think of myself as that. Again, it's on paper, but no, they don't. My dad’s construction. He grew up in that. In fact, I was going to be a contractor myself for many years. And he finally said, “Son, you're going to make more use in your brain than you will your spine.” And I just fell into nursing and long story short, yeah, no financial advice from my parents, but just all self-taught and learning from other people I guess.

Dr. Jim Dahle:
Very cool. All right, if there's someone else out there like you, I think you've provided them some inspiration. So, thank you so much for coming on the White Coat Investor, or rather the Milestones to Millionaire podcast and sharing your story and inspiring the next person to do the same.

Matt:
Take care of yourself. Thanks. I appreciate your time.

Dr. Jim Dahle:
All right. I hope you enjoyed that interview with Matt. I love the can-do attitude. It's kind of a little bit armyesque, right? “I can do this. Just put my path in front of me and I will go down it.”

But it's pretty cool that even at what a lot of people consider mid-career, kind of early career for docs when you're only 41, you really turned things around, started basically from zero at that point. Came out of school, plenty of debt, very negative net worth. And yet he has become a millionaire as well. And that before 50 years old.

This is something you can do. You can do this if you're a doc. You can do this if you're a CRNA. You can do this if you are a nurse. You can do this. It's entirely possible. You just need to get a little bit of financial literacy, a little bit of financial discipline. The information is out there waiting for you. When the student is ready, the teacher will appear.

We put it out in every format we can think of. Whether it's a subreddit or a Facebook group or whether it's books or an online course or this podcast, we want to get you this information. We cannot instill in you the discipline. You'll need to do that yourself. And it will require some, not a terrible amount. If you're already a high income professional, you're probably already plenty discipline. You just need to apply it to your financial life.

FINANCE 101: DISABILITY INSURANCE

All right. I promised you I was going to talk for a few minutes about disability insurance. And I'll tell you what. Disability insurance is one of those things that you do need to shop around a little bit for. Policies are complicated. If life insurance is black and white, you are either alive or you are dead. And there's a little bit of gray in there, about 15 minutes worth. And I see that all the time as an emergency doc. But you know what? Pretty soon you got to sort it out. People are either alive or they're dead.

So, the policies for term life insurance are very straightforward and simple. It's very much a commodity. It's relatively easy to shop for. Even if you have a lot of medical problems, it's still a relatively straightforward thing. You'll either qualify for it at some price or you just won't.

Disability though is like 50 shades of gray. And so, the policies have to be a lot more complicated. They have a lot of riders, they have a lot of exclusions. They have a lot of definitions that matter.

And so, it takes an education to buy disability insurance. And that's why we have that list of vetted disability insurance agents. They're all a little bit different, a little bit different personalities. Occasionally one of them will have a discount that some others won't have.

But I'll tell you what drives them nuts. When you apply to all nine of them. You're not applying to nine insurance companies. There's only really six that you apply to anyway. And one agent can apply with all six for you. When you apply to nine, you're just wasting your time and theirs. You don't need to get on an hour phone call with nine different agents to get educated about disability insurance. One of them will do.

If you're worried that they maybe aren't giving you the best advice or you're worried that maybe another one will have a better discount, check two. But you don't need five much less nine. So, save yourself some time there.

The other thing to keep in mind is rarely is the difference in price you're getting from one agent to another agent a result of their discount. For the most part, you're getting the same discounts from every agent. And so, you got to make sure when you see that a policy is substantially differently priced, you need to make sure that you're looking at the same policy, that you're comparing apples to apples.

For example, one thing an agent might do is they leave off the COLA rider, the cost of living adjustment rider. This is something if you're buying a policy in your thirties or your twenties, you need to buy. Because if you get disabled, you need that benefit. If you get a long-term disability till you're 65 or whatever, you need that policy benefit to keep up with inflation. And so, that's something that's worth buying when you're 30. Maybe if you're buying a policy at 58, you don't need to buy this, but if you're buying it at 32, you do.

So, if one agent is showing you a policy without an inflation rider and the other one isn't, well of course the policy without the inflation rider is going to be cheaper. But that's not because that agent has giving you a better deal. They're just selling you a different policy. And in some respects, they're probably giving you a worse deal. So, make sure you're comparing apples to apples in that respect.

And half the agent put up multiple different policies and talk to you about the pros and cons of each one. Yes, this one's going to be another $115 a month, but here's what you're getting for that $115. So, is that worth it to you? Let's get you this one. If not, let's get you that one.

The other thing you need to do that drives agents nuts is I can't believe how many people lie to them about their health problems, about their dangerous hobbies, whatever.

These insurance companies have access to your insurance claims. They all go in a database and they check them. So, you tell the agent that you don't have any medical problems whatsoever, and the insurance underwriter goes and looks at your prescription history and sees that you're on Metformin, there's going to be some questions and you might have a denial.

And getting a denial for disability insurance is a very bad thing. And the reason why is that a lot of docs are eligible for a guaranteed standard issue policy, particularly while you're in residency or fellowship or while you're working in an academic center or a big medical center, you often have access to one of these where you can get the policy very quickly without having to prove that you are a good bet for the insurance company.

And so, if there's any doubt whatsoever about your health status or you being declined, you want to do two things. Number one, you should apply for a GSI policy if you're eligible for one. You can always get a fully underwritten one that might be cheaper afterward, but get the GSI one in your pocket to start with.

And two, you want to have that insurance agent shop you around informally. To call up the underwriter at Principal or at Ameritas and say, “Hey, I got this doc. He had testicular cancer eight years ago. It never got out of his testicl*s. It hasn't come back. He's been cancer free for seven years. He gets scanned every year and it looks fine. It's been seven years. Is this going to cause him a problem applying? Because we don't want to get him decline.”

And so, that's what a good agent will do for you if you had any sort of medical problems in the past. But don't hide these from the agents. The agents are not the ones doing the underwriting. That is a completely different person who has access to all kinds of information that maybe the agent doesn't even have access to.

So, be honest with the agent because that's going to run you into problems. You'll get declined and then you won't be able to get insurance and it becomes a big problem. That's one of the questions on all the applications is “Had you been declined for insurance?” And you don't want to be answering that question “yes.” It's going to make it a lot harder to get.

Now, occasionally I run into docs. They literally just can't get disability insurance. What are your options if you can't get it? Well, remember, you don't necessarily need disability insurance. You just need a plan. That plan might be that you have a family trust with $10 million in it. Great, that's your plan. If you get disabled, the family trust will support you. Your plan might be your urologist's spouse is going to support you in the event that you get disabled.

Your plan might be that you're now financially independent and you no longer need disability insurance. You need a plan. You don't necessarily need insurance. So, think this through. Put the plan in place. If disability insurance is part of that, buy disability insurance, but think about the plan to start with.

All right. I hope that's helpful to you when it comes to thinking about disability, thinking about disability insurance. But this thing is important. Doctors need this. Almost every doctor needs this for at least part of their career. And so, if you don't have disability insurance and you don't have a plan in the event that you get disabled, 1 out of 7 docs that happens to, you put that plan in place.

SPONSOR

All right? Well, shoot. Our sponsor for this episode is also our disability insurance list. I think I've talked enough about disability insurance, but there's a reason we have a recommended list there. These are people that sell policies to hundreds of doctors a year. They know the ins and outs of these policies. They can help you get the policy that's right for you.

Yes, they're going to get paid for it. You ought to spend time to get all your questions answered because they're getting paid a nice commission for it. But go to this list because they're good people and they're going to help you get the right policy. whitecoatinvestor.com/insurance is the list.

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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.