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of the year, but we need your help. We

1:02

need you to help us reach more

1:04

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1:06

this is a great and free way to give back and

1:08

support WCI. To be honest, I don't

1:10

care if we win this award, but I

1:13

know that winning things like this helps spread the

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care about, because I know there's a lot of people out

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1:31

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period runs from now until July 31st. I think there's a

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vote after that if we are nominated, and

1:43

you'll be able to use the same link to go

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there and vote. But we'll mention it again on the

1:47

podcast if we do win, or

1:50

at least if we're nominated. All

1:53

right, let's get into your questions here. Hi,

1:56

Dr. Dali. My elderly mother was a

1:58

victim of fraud. She was... forced

2:00

into transferring a large amount of money

2:02

from her traditional IRA to her checking

2:04

account. The total was about $340,000 split

2:06

into three separate transactions within a single

2:10

week. There were $200K, $80K, and $60K.

2:12

She sent half, or about $170K, to the

2:14

perpetrators, and

2:18

that money is now gone. The remaining $170K

2:20

is still in her checking account. Her

2:23

traditional IRA has $120,000 remaining, and she also has $100,000 in a Roth IRA.

2:25

She has

2:29

no other liquid assets. My understanding

2:31

is that she has 60 days to

2:33

repay the withdrawal from her traditional IRA

2:35

without having to pay taxes. My

2:38

question is, can she withdraw the $100,000 from her Roth

2:40

IRA and then add that to the $170,000 in her

2:42

checking account to

2:45

repay a total of $270,000 to

2:48

her traditional IRA in order to minimize the

2:51

tax burden? Or would the

2:53

repayment be capped at $200K, her largest

2:55

single withdrawal amount, because of the limit

2:57

of doing one transaction per year? Her

3:00

typical taxable income is around $45,000

3:02

per year. I'm just trying to minimize

3:05

the huge tax bill from this fraud. Thank

3:07

you very much for all you do. I appreciate your

3:09

time. Oh, Kyle, I'm

3:11

so sorry. That is so terrible.

3:15

This one thing, when I see a multimillionaire

3:17

doctor be the victim of a

3:20

few thousand dollars of fraud, it's

3:22

totally different than it's half your nest egg.

3:26

It breaks your heart to hear that

3:28

story. It's just awful. As

3:30

a general rule, this is for you and

3:33

for everybody else, if you've got a time

3:35

sensitive question, the SpeakPipe's maybe not

3:37

the place for it. I hope you

3:39

found the answer to this long before you heard this

3:41

podcast. By the time you leave something on the SpeakPipe

3:44

and by the time we run it, we're probably

3:46

looking at five weeks. When

3:49

you got 60 days to perform a rollover after

3:52

you ask the question, that's

3:54

probably not going to make it. Just

3:57

keep that in mind. If you have a question

3:59

you want to answer, or sooner email

4:01

me, editor of whitecoatinvestor.com. We'll

4:04

try to help. I'm not gonna promise

4:06

I'm gonna answer you the same day. Sometimes it's a week later

4:08

if I'm on a trip or something, but most of the time

4:10

it's just been a day or two. And

4:12

that's better than five or six weeks

4:14

later on the speed bike. But

4:16

yeah, you got 60 days, right? Anytime you

4:18

pull money out, you can essentially,

4:22

you know, do a rollover. You've

4:24

got 60 days to do a rollover once a year. And

4:27

the fact that this all came

4:29

out in three different payments,

4:31

would that count as multiple rollovers

4:33

or could that all be considered one?

4:36

If they were close together, maybe it could be considered

4:39

one. Certainly they all, you know,

4:41

the date starts with the time the first money

4:43

came out, right? If you're trying

4:45

to put all the money back in there, it's gonna start

4:47

at the first withdrawal that was made.

4:49

And so you got 60 days from that.

4:53

You mentioned mom's elderly, so there's no 10%

4:55

penalties on pulling anything out. You could pull

4:57

all the money out of the Roth IRA

4:59

today, and it wouldn't cost you anything in

5:01

taxes. You could subsequently put that back into

5:03

the traditional IRA and avoid the

5:05

tax bill on those withdrawals. But

5:08

there's gotta be something else here to help you, right?

5:11

I think there's deduction if you have stuff

5:13

stolen from you, isn't there, on your taxes?

5:15

So it seems like everything that was stolen,

5:17

yes, that's taxable income, but there should be an

5:20

offsetting deduction. Now she'd obviously have to

5:24

itemize to get that, but I'm pretty

5:26

sure that having something stolen from you

5:28

is deductible. Let's look at

5:30

Schedule A. Let me pull up Schedule A here and look

5:33

at that. It's got your medical and

5:35

dental expenses. It's got taxes you paid, interest you paid,

5:37

gifts to charity, here it is, casually and theft losses.

5:40

Line 15 on

5:42

Schedule A, right? That's

5:45

from a federally declared disaster

5:47

though. Oh, is that the only

5:49

ones that you can deduct? Let's

5:51

go to the instructions here. I'm pretty sure you

5:54

used to be able to deduct these. Maybe you

5:56

can't anymore. Let's go

5:58

to the Schedule A instructions. and see

6:00

if you can deduct this anymore. All

6:03

right. 2023 instructions for Schedule

6:05

A comes from IRS.gov. Let's

6:07

go down to losses. You

6:11

used to be able to deduct. If

6:13

that stuff's stolen out of your garage, let's

6:15

see what it says now. It says,

6:17

attach form 4684 to figure

6:19

the amount of your loss. Only enter the amount from form

6:22

4684, line 18. Let's

6:26

go to 4684. Okay,

6:29

and this talks about description

6:31

of property, report casualties

6:33

and thefts of property not used in

6:36

a trader business or for income producing

6:38

purposes. Section B

6:40

is business and income producing property.

6:43

I mean, I think you can still put this on 4684 as a

6:45

theft and

6:48

then it can go to Schedule A. So, I mean,

6:50

she may not have wanted to

6:53

itemize, but it sounds like she can itemize this

6:55

year. That'll offset some of this, and maybe that'll

6:58

make it so you don't want to put all the money

7:00

back in the traditional IRA. Maybe you don't want to raid

7:02

the Roth IRA if you can

7:04

offset some of this with the deduction. I

7:06

think I'd look very, very carefully into that

7:08

before I cashed out a

7:10

Roth IRA. That seems like a little bit

7:13

of an extreme solution to that particular

7:15

tax bill. But

7:18

I think you got a deduction there that you

7:20

may not be aware of that you ought to

7:22

look very carefully into and check that

7:24

out. In general, fraud

7:26

is one of these things that's embarrassing

7:28

to admit. People don't want to admit

7:30

they've been victims of fraud, which is

7:33

interesting, right? Nobody's afraid

7:35

to admit that they were a

7:37

victim of breaking and entering. Nobody's

7:40

afraid to admit they

7:42

were the victim of grand theft

7:44

auto, but somehow

7:46

we feel like it's our fault that

7:49

we were defrauded, and it makes

7:51

us look stupid for falling through the trick. Well,

7:53

these tricks are incredibly complex,

7:57

and this has been going on for years and years and years

7:59

and years. years, right? You know,

8:01

they can be incredibly complex. I watched

8:04

a Robert Redford movie, an old Robert

8:06

Redford movie not long ago. I can't

8:08

remember what it was called. But

8:11

it was a very complex fraud and is based

8:13

on real life. You know, so a

8:15

lot of these are

8:17

impressively complex deals

8:20

that people are getting suckered into.

8:22

So don't beat yourself up with

8:24

your victim of fraud. Obviously, maybe

8:26

you don't want to publicize it

8:28

because it makes your, you seem dumb and

8:30

maybe that affects your business prospects. But don't

8:33

sit on this stuff and be hurt by

8:35

it. Because you are the

8:38

victim. You are a victim of

8:40

fraud, right? People did this to

8:42

you. It's not a mistake you

8:44

made. You're a victim. And

8:47

many of us have been victims of fraud.

8:49

I had a syndication that I lost great

8:51

deal of principle on. It's almost surely not

8:53

coming back. It's not done yet. But it

8:55

was a result of a fraudulent operator. And

8:59

there was no amount of due diligence

9:01

that would have chewed me into this,

9:04

clued me into this and helped

9:06

me avoid that. It was just fraud. It was

9:08

just crying. And that's the

9:11

way most fraud is. So do

9:13

what you can to mitigate the loss, try

9:15

to get your money back, you know, report

9:17

to the appropriate authorities, but recognize that this

9:19

stuff's really complex. I was

9:22

really bummed, actually. I was reading the

9:24

local newspaper. The SEC is closing down

9:26

the Salt Lake City branch.

9:28

Apparently, they had some attorneys

9:31

that retired or left or went somewhere else.

9:33

And there was a big

9:35

to-do over a crypto case here that maybe they

9:37

were overreaching on. And now they just closed the

9:39

office, which I think is a very bad idea,

9:42

given the history of fraud in Utah. We've

9:44

got this long, long, decades-long history of being

9:46

the fraud capital of the world out here.

9:48

It goes back to the

9:50

era when they were literally

9:53

selling uranium companies' stocks on street

9:55

corners in Salt Lake City. So

9:58

I'm not thrilled to have the SEC going away. out

10:01

of Salt Lake City. Apparently the Denver office is

10:03

gonna help cover Utah, but I

10:05

think we merit our own division

10:07

of the SEC here. And

10:10

I'm not excited to see them pulling

10:12

out, but there's a lot

10:14

of fraud out there. That division

10:16

was always very busy, and

10:18

I'm sure that Denver's not gonna be

10:21

able to, you know, ramp up and cover

10:23

the need out here for anti-fraud

10:25

protection. All

10:27

right, let's talk about another kind of protection. Let's

10:29

talk about asset protection. This question comes from Matthew.

10:32

Hi, Dr. Dali. I just finished reading

10:34

your excellent to WCI guide to asset

10:37

protection, and I have some additional questions.

10:40

I am two years out of residency

10:42

working as an independent contractor splitting time

10:44

50-50 in Kansas and Missouri. My

10:46

first question is what happens if a

10:48

malpractice suit arises in one state versus

10:50

the other? Do the laws follow whichever

10:52

state malpractice suit originates? If

10:55

I own a home in Kansas, would it

10:57

be subject to creditors from a suit originating

10:59

in Missouri and less titled by entirety, or

11:01

does the unlimited Kansas home state exemption protect

11:03

it regardless? And on the

11:05

flip side, would a brokerage account titled

11:07

by entirety in Missouri be saved from

11:09

a suit originating in Kansas, which doesn't

11:11

have titling by entirety protections? My

11:14

second question is in regards to neither

11:16

state having decent non-arisa protections, as most

11:18

of my wife's and my

11:20

retirement savings are not a solo 401k and

11:22

Roth IRA's. All the cap

11:24

on non-economic damages in both states and

11:27

my two and $61 malpractice policy means I'm not

11:30

particularly worried about an above policy judgment. It

11:32

still makes me a little uncomfortable that our

11:34

retirement accounts aren't fully protected. Can

11:37

all these accounts go into a domestic asset

11:39

protection trust and would the situation make you

11:41

more likely to suggest that? Thanks

11:43

for all that you do, really appreciate it. All

11:46

right, great questions on asset protection. I love it,

11:48

we're getting into the weeds here. Hey,

11:51

your first question is such a doctor question,

11:53

right? Doctors think this is the way asset

11:55

protection works, that there's this category, oh, that's

11:57

protected, and this isn't protected and, you know.

14:00

think it's a given because you own it.

14:03

So I think it's possible you can still

14:05

end up losing that and above policy limits,

14:08

judgment situation where you had declared

14:10

bankruptcy. But remember when we're talking

14:12

about asset protection, we're

14:15

talking about what do you keep if you declare bankruptcy?

14:18

You get this $10 million judgment, it's not

14:20

reduced on appeal, you literally owe it and

14:22

you go, I can't pay it, I'm going

14:24

to declare bankruptcy, and they get whatever

14:26

is not protected, and you get to

14:28

keep what is protected. Those are

14:30

very rare situations. This does not

14:33

happen very often at all in

14:36

medical malpractice. So I'd

14:38

still sleep well at night, I wouldn't spend a lot of

14:41

time worrying about this, but I would do those things that

14:43

can be helpful. I don't think you can just stick

14:46

your retirement accounts in a trust. Because sticking something in

14:48

a trust, remember what it is, it's that the trust

14:50

owns it. And the trust can't own

14:52

your retirement account, especially

14:54

while you're alive. So I

14:56

don't think that's really an option. Good thought

14:58

though. Maybe you ought

15:00

to consider other states as well, if

15:03

this is a big concern for you, but it

15:05

doesn't sound like it's any more of a concern

15:07

for you than it is for any other doctor.

15:09

So I hope that's helpful to you. Our

15:12

quote of the day today comes from Gary Player, who said,

15:14

the harder you work, the luckier you get. There's

15:16

a lot of truth to that. We create a

15:18

lot of our own luck these days.

15:21

Okay, another asset protection question. This one I think

15:24

has to do with the kids driving your cars.

15:27

Hi Jim, this is Shereen from Florida. In

15:30

your book of Physicians Guide to Asset Protection,

15:32

you talk about reducing liability by removing my

15:34

name off the title of the car that

15:36

my kids use. I've got four kids

15:38

ages 21, 19, 19, and 15. Two of the kids, the

15:43

21 year old and the 19 year old share a

15:45

car at college. The other 19 year

15:47

old is also in college at a different school,

15:49

doesn't have a car on campus, but does use

15:51

the car when home from school on break. My

15:54

15 year old is just starting to drive and

15:56

we may purchase a used car for her when she turns

15:58

16. That

18:00

it's not your car, even if

18:02

it's on your policy. I don't know how well that would

18:04

work. You'd have to ask an attorney how well that argument

18:06

would work, but it might be an option. Probably

18:10

better if it's their own policy and their

18:12

car and your name's not on it as

18:14

far as asset protection purposes go. Now,

18:17

what do I do? I've got

18:19

a big fat liability policy on

18:21

our cars with a big fat umbrella

18:23

policy sitting on top of them. If

18:26

people aren't happy with the amount of money

18:28

they get from my umbrella policy, they're incredibly greedy.

18:30

I mean, I would have to hit a really

18:32

nice car with a very expensive person inside

18:34

it to hit policy limits on

18:36

my umbrella policy. Most

18:39

people driving around just aren't worth that much

18:41

money. The economic value of their

18:43

life is not as high as my umbrella

18:45

policy, and that's what matters unfortunately. I mean,

18:47

everyone wants to think they're worth millions, but

18:50

the truth is they really may not

18:52

be when they actually add

18:54

it up. You basically

18:56

look at your earning potential. If you hit somebody

18:58

that's 65 and retired, they're not worth

19:01

as much as a 40-year-old CEO

19:03

making $2 million a year. All

19:06

right. Good luck with that. You got

19:09

to make a decision. It might cost you more for

19:11

insurance and you get a little extra asset protection or

19:13

you just decide to have a little less asset protection

19:15

and save some money on insurance. Your

19:17

call. As far as the 15-year-old,

19:19

when kids are on a permit, they don't cost anything. Your insurance

19:21

doesn't go up to have a kid on a permit. When they

19:23

turn 16 and get a license, it sure goes up in a

19:25

hurry though. Obviously, the

19:27

best thing for your expenses and

19:30

for your asset protection is to not let them drive until

19:32

they're 18. I think

19:34

that's a bad idea. It's really a trend these days.

19:36

Lots of kids don't want to get their licenses. I

19:39

remember when I turned 16, I was very

19:41

antsy to get my license. It represented significant

19:43

freedom in my life. All

19:45

of my kids have felt the same way. It's

19:48

a little bit surprising to me to see that there's kids

19:50

out there that don't want to do that, but

19:52

it's apparently true. I don't know if it's anxiety,

19:54

they don't want to drive, or the people are

19:56

just less social now. They all just hang out

19:58

online and on social media. year

22:00

you can put in there. Your spouse can go open an

22:02

$18,000 529 too,

22:04

and put $18,000 in there for them. All right, so $36,000. Right,

22:10

is what you're putting in there a year, they got 18 years.

22:13

So let's do a future value calculation here. Let's just use

22:16

8%. Let's say 18 years, you're putting $36,000 a year in

22:18

there. And

22:22

that works out to be 1.3 million.

22:26

What school are you sending these kids to that

22:28

you got to do more than this, right?

22:31

You started working out these schemes to

22:33

put some in your own 529

22:35

and change the beneficiary or your grandparents or

22:37

uncles or whatever, stop doing all this crap.

22:40

Now I get it, you're trying to get

22:42

a little tiny deduction on $4,000, right? I

22:45

mean, what, what are Ohio tax rates?

22:47

Anyway, they're not that bad, are there? Let's

22:49

see, Ohio tax brackets,

22:52

do they go from 0% to 3.99? Is

22:55

that it? 4% tax, that's what you pay in Ohio.

22:57

So if

23:00

you get a deduction on four grand, $4,000 times 4%,

23:03

that's $160

23:06

deduction you're getting, or that's what you're getting

23:08

off your taxes. I

23:11

don't know. I don't know that I'd go open in

23:13

a bunch of accounts to get $160 a year. I guess you could. You need

23:18

to read the Ohio rules

23:20

though, on this, right? I'm

23:23

pretty sure in Utah that once

23:25

you're 19, or once the student, the beneficiary

23:27

of the 529 is 19, might be 20. I can't deduct

23:32

the contribution into that account anymore. At

23:35

18, I'm pretty sure I can. At 19,

23:37

I don't think I can. So at that

23:39

point, right, doing uncle, doing grandpa, doing you,

23:42

you're not getting the tax deduction anyway. So

23:44

this scheme of yours, I don't think is going to

23:47

work if the Ohio rules are like the Utah rules.

23:49

So keep that in mind, you got to know the

23:51

Ohio rules, if you're messing with the Ohio tax

23:53

code in the Ohio 529 system. But

23:57

you can change beneficiaries that would help you get

23:59

around this. being

26:00

really weird, I totally agree with.

26:02

I don't think Congress and even

26:04

the IRS thought this through

26:06

very well when they passed all these

26:09

laws about 529s and ABLE accounts. I

26:12

don't think they really thought through how

26:14

that's gonna interact with gift tax

26:16

laws. And so it doesn't

26:18

always make sense. I absolutely agree with you.

26:21

I mean, for example, right?

26:23

It counts as a contribution when you put it into

26:25

a 529 that you own

26:27

that the kid's the beneficiary, right?

26:30

You own it. You can take the money out of the 529 and

26:32

buy a sailboat with it. And yet it already counts

26:34

as a complete gift. That

26:37

doesn't make any sense, but that's the way the rules

26:39

are. So you just gotta work with the rules that

26:41

they have. Hope that's helpful to

26:43

you. I'm sorry if I rained on your parade

26:45

a little too hard, but I think people get

26:48

a little crazy about 529s. These people

26:50

trying to open them before they even have a social security

26:52

number for the kid, it's overkill,

26:54

okay? You're gonna be able to save

26:56

up enough for college. And even if you can't, right?

26:59

You can cash flow a huge part of it,

27:02

right? It's not the end of the world. If you

27:04

don't make a maximum contribution to multiple 529s every year

27:06

for 18 years, you're

27:08

gonna be able to pay for your kid's college. It'll be all right. Okay,

27:12

let's go on to our next question. Another

27:14

529 question. This one from Brad. Hi,

27:17

Dr. Dolly. I had a question regarding 529

27:20

plans and withdrawals and

27:22

how to document those on federal and

27:24

state tax returns. I

27:26

have a daughter starting college this

27:28

fall and I've been unable to

27:30

find online how to properly document

27:33

those withdrawals on tax returns. Ideally,

27:36

I would like to be able to take a withdrawal

27:38

a few days before I pay those bills.

27:41

So I have that money I can use

27:43

towards that. And I was just wondering

27:45

how I document that on the

27:47

federal and state tax returns to

27:49

stay in compliance with the IRS.

27:52

I'm an Illinois resident, if that matters. But I

27:54

was just wondering if you could please review how

27:57

to do that properly. Thank you. All

28:01

right, great question. A lot of good questions

28:03

today. What a great episode we're putting together here. Let

28:06

me tell you what I do. I am now withdrawing.

28:08

Starting this year, I think I'm withdrawing from nine 529s.

28:12

You'll recall I started them for all my nieces

28:14

and nephews, and we've got nine kids in college.

28:16

One of them just graduated, actually. We've

28:18

been our nieces and nephews. This

28:20

is exciting, but this is why I have 34, 35,

28:23

529s, is I got one for all these kids. Here's

28:27

what I do. They all have a

28:29

Venmo account. They say, Uncle

28:32

Jim, I need $1,750 for this fee

28:37

or for rent or whatever. I say,

28:39

okay. And I Venmo them $1,750. Then

28:43

I log in to my529.org, and

28:47

I make a withdrawal to my bank account. It's

28:50

a partial withdrawal, and it's

28:53

for higher education. That's all the 529

28:55

asks me, and it goes to my bank account. And

28:58

then we reconcile our Venmo account and our

29:01

bank account and whatever. Money moves between the

29:03

two, no problem. Now, they

29:05

go and pay for their fee. They pay

29:07

their rent, whatever, and they send me the

29:09

receipt. They email me the receipt, and I

29:11

save it on my computer in my folder

29:14

for 529 receipts for 2024. That's

29:18

it. That's the whole process. At the

29:20

end of the year, my 529 sends me

29:22

some tax forms, and I hand those

29:25

to my tax preparer. But I don't think they even

29:27

do much with them. This

29:29

isn't really a taxable event. These are legitimate withdrawals,

29:31

so they're not income to me. They don't really

29:33

show up on my taxes. So

29:37

I get a form from them for my contributions.

29:39

I get a deduction for contributions, and

29:42

I get a form from them showing withdrawals.

29:45

And if I ever got audited, the IRS could

29:47

say, okay, show me the receipts for these withdrawals,

29:49

and I have the receipts, and that's

29:51

it. Now, I've talked to an expert

29:53

about paying for college, and her recommendation was

29:55

actually that you have the 529 send the

29:57

money to the school. or

30:00

to whoever the payment is going to whenever

30:02

possible. That looks cleaner and is

30:05

less likely to get audited. But you know what? It's

30:07

a huge pain. You know what's not a

30:09

pain? Venmo. Venmo is not a pain. Putting

30:11

in my account, not a pain. And

30:14

I think it's worth the risk of an audit. I'm confident

30:16

I would pass an audit on this point.

30:19

They're all legitimate expenses. I have all the

30:21

receipts. It's a very clean paper trail.

30:23

And I don't think it's a

30:25

problem. They're not going to audit me on this. This

30:27

is small potatoes when it comes to my tax return.

30:29

And they want to do an audit. They're going to

30:32

audit something else. But that's what I

30:34

do. So I hope that's helpful. We could

30:36

go through the forms that the 529 send

30:39

you. We could talk about how that

30:41

actually gets entered into tax software. But I'll be

30:43

honest, I've never done it. I haven't been doing

30:45

my own taxes for the last two or three

30:47

years. I just hand it to the tax

30:49

guy and they take care of it. But

30:52

since it's not taxable, I don't think it even really shows

30:54

up on the return. The deductions do.

30:56

My contributions absolutely. They show up. I can show you

30:58

where they show up on my Utah return, but that's

31:01

not going to help you in Illinois. I'm

31:03

sure they show up somewhere similarly on

31:05

the Illinois return. Actually, I think

31:07

I may be filing Illinois returns. So I might

31:09

be able to tell you where that sort of

31:11

thing would show up on Illinois return, but I'm

31:13

not making contributions to an Illinois 529. So I'm

31:15

not going to get

31:18

that deduction anyway. I hope that's helpful to you.

31:21

It doesn't have to be that complicated. It's

31:23

really not that big a deal. You just

31:25

want to make sure you're spending on legitimate

31:27

things. In general, that's computers, that's room and

31:30

board, or if they're living on their own,

31:32

rent and food up to

31:34

the amount the school authorizes, its tuition, its

31:37

fees. One thing it is

31:39

not, however, is transportation. I've had some of

31:41

the kids ask me to send

31:43

them money for transportation expenses. No bueno.

31:46

That is not a 529 expense. So keep

31:48

that in mind. Almost everything else they need for school is

31:50

though. All right. WCI

31:54

scholarship season. WCI scholarship

31:56

is out there again. You got

31:58

to be a professional to apply, you

32:01

can apply at whitecoatinvestor.com slash

32:04

scholarship. Last year,

32:06

I think we had a thousand applicants. All right,

32:08

what is it? It's a cash award. We

32:10

send you a check. We give you

32:13

a white coat investor course as well. If you win,

32:15

there's 10 winners. There's two

32:17

categories. One category is like inspiring story

32:19

category. That's where most of the applications

32:21

come in. The other one's like a

32:23

financial story. And, you know,

32:25

tell us a financial story from being in

32:27

med school, maybe a trick you learned or

32:30

how you're paying for things or keeping your

32:32

debt down or whatever. The other one

32:34

tends to be people who come

32:36

from an incredibly hard financial

32:38

background and, you know,

32:40

are incredible people that started orphanages or whatever.

32:43

And those tend to be the people that win in

32:45

that category. But you can apply. We

32:47

encourage people to apply. You have to be

32:50

a full-time professional student in good standing. Most

32:53

of our winners over the years have been

32:55

medical students with an occasional dental student that's

32:57

won, but other professionals can apply.

33:00

One thing we do need with this though, because

33:02

now we're getting not just like 600 applications like

33:05

we used to, we're getting like a thousand applications

33:07

a year. We need help judging,

33:09

okay? We don't decide who

33:12

gets the money. None of the WCI staff

33:14

are judges. You guys

33:16

are the judges. The white coat investor community is

33:18

the judges. So we need judges.

33:21

And last year we had so many applicants. I think

33:23

it ended up being like 20 of

33:25

these thousand word essays that the judges had to

33:28

read. We'd like to get that down closer to 10.

33:31

So it's not as much of a burden on the

33:33

volunteer judges. So please, please, please, even if you've never

33:35

judged this before, we'd like you to be a judge.

33:37

You can't be a student or a resident, but if

33:39

you're a professional or a retiree of any kind, you

33:41

can be one of the judges and

33:43

expect to read 10 to 20 of

33:45

these thousand word essays. And

33:47

they're pretty inspiring. I think you'll really enjoy it. But

33:51

apply to be a judge

33:53

by emailing scholarship at whitecoatinvestor.com, put

33:56

volunteer judge in the title. We'll

33:58

get you in there. bit of free

34:00

time in September to be a

34:02

judge. But please, please, please

34:05

volunteer. We can't do this program without

34:07

you. It would be overwhelming for our

34:09

staff, number one, but number two, we

34:11

just want to be as unbiased as

34:13

possible as far as who the winners

34:15

of the contest are. But I think

34:17

we're at 60 or $70,000 this year. We're going to give

34:19

away, you divide that by 10, that's six or $7,000 a

34:23

piece. That's a big deal to a medical student,

34:25

right? It's a big deal to get a check for that. It really

34:27

does make a difference in their lives. And

34:29

we continue to support that and appreciate our

34:32

sponsors who help us to keep

34:34

this program going year after year. I don't know what year

34:36

we're in, seven or eight, I think we've been doing this.

34:39

And we hope to keep it going, but we

34:41

do need your help to do so. So those

34:44

who want to apply, whitecoatinvestor.com/scholarship, you have until the

34:46

end of August. There's no benefit to applying early,

34:48

but maybe don't wait till

34:50

the last minute. Those who want

34:52

to judge, email scholarship at whitecoatinvestor.com

34:54

with the words volunteer judge in

34:57

the title. Thank you so much for being willing to

34:59

do that. Okay,

35:01

next question comes from Nicholas. Let's take a listen. Hi,

35:04

Dr. Dali. This is Nick from Idaho. I

35:06

have a question in regards to the safe

35:09

plan that replaced repay. As far as I

35:11

understand, as long as the monthly payment calculated

35:13

on this plan is made every month, no

35:15

interest accrues on the total student loan balance.

35:18

My previous student loan plan was to

35:21

enroll in repay during residency and refinance

35:23

privately after residency for a lower interest

35:25

rate. However, as far as I

35:27

understand, the safe plan seems to have essentially a 0%

35:30

interest rate for those who are like me and

35:32

are interested in paying off loans within

35:34

just a few years of graduating residency. Am

35:37

I missing something or is this the best

35:39

student loan hack available? I

35:42

didn't hear you say anything wrong, so I don't think you're

35:44

missing anything. I don't know if

35:46

I should rant on this again. I feel

35:48

like I've talked about this before, but the

35:50

federal student loan program has become incredibly generous

35:53

for doctors. When you combine the safe plan

35:55

with PSLF and a

35:57

few other things like the fact that Basically,

36:00

people aren't taking out private loans in med school

36:02

anymore, and it takes a

36:05

year or two to certify your new income

36:08

when your income goes up. You put these

36:10

four factors together and it's super generous. I'm

36:13

not even sure it's good public policy to

36:16

have it be this generous to doctors, but

36:18

I'm glad you guys are all benefiting from

36:20

it. Obviously, played by the rules

36:22

of the game you're given and take

36:24

advantage where you can. But

36:26

yeah, this is the way save works. Let's

36:30

say you got $200,000 in student loans, there are 6%.

36:33

That's $1,000 in interest a month. Let's

36:36

say your payment's 200 bucks. You'd

36:39

pay $200 and $800 in interest would be waived. That's

36:43

the way save works. Repay was

36:47

basically $400 would be added on to your loan and $400 would be waived. Well

36:52

now under save, all $800 is waived. Your

36:55

loans no longer grow in residency. You

36:57

do have to make payments though. Those payments

36:59

are going toward interest. It's not 0% interest.

37:03

It's a heavily subsidized interest rate, even

37:05

more so than under repay, but it's

37:07

not 0% interest. You're paying some

37:09

interest during residency with your payments. Just

37:12

the only guarantee is that they don't grow because

37:14

no interest is getting added to

37:16

the loan. You can't stay in

37:18

repay though. Everybody in repay is being converted

37:20

to save. It's

37:23

not like repay is even a thing anymore. It

37:25

doesn't really exist. It's being all converted to save.

37:28

Now after residency, you're going to pay

37:30

off your loans. You're not planning on going

37:32

for PSLF. Basically,

37:35

you wait until you have to

37:37

recertify your income. That's

37:40

not going to be the day you walk out of

37:42

residency. It might be the next spring. It might be

37:44

two years later. Just depends. This

37:47

is a moving target. The rules keep changing. Sometimes

37:49

it'll come to you for quite a while and

37:51

you're still making payments based

37:53

on your resident income. Your

37:55

first couple of years of residency, if you file a

37:58

tax return as a fourth year medical going

38:00

zero income, your first year or

38:02

two of residency, you're basically making $0 payments.

38:05

Right? And then

38:07

your payments go up a little bit more as

38:09

you go through residency. And then when you come

38:11

out for a year or two, you're still making

38:13

payments based on that resident or fellow income. And

38:16

if you can get your student loans paid off in

38:19

a year, 18 months, two years after

38:21

coming out, it might not

38:23

make sense to refinance. Your

38:25

subsidized interest rate is not zero, like

38:27

I said. That subsidized interest rate

38:29

may be better than what you can refinance to.

38:32

On the other hand, if you think it's

38:34

gonna be three, four, five, six years, whatever, to

38:37

pay off your student loans, you're probably gonna

38:39

need to refinance. And when do you refinance? You

38:41

refinance about that time that they basically

38:43

take into account your attending income. Because

38:46

at that point, you're no longer getting a

38:48

subsidized interest rate. Right? What

38:51

interest rate are you paying? Well, you're paying, you know,

38:53

these days, medical students are taking out loans, I think this next year,

38:55

it's gonna be 8.05% and 9.05%. Now,

38:59

those of you who are out in training right now,

39:01

you don't have loans that high. You don't have federal

39:03

loans that high anyway, for the most part, years are

39:05

six or seven, probably. But that's

39:08

how high they are. So if your loans are

39:10

going to where your effective rate is 8%, yeah,

39:12

refinance them. I think people are refinancing at five,

39:14

five and a half, 6% right now. It's

39:17

not the 2% you used to be able to

39:19

get. So of course, the volume of refinancing has

39:21

gone way down. But if you're paying off

39:23

your student loans, and your federal

39:25

student loan rate is really high, yeah,

39:28

refinance, refinance still makes sense for lots of

39:30

people. Just remember, once you refinance, you're

39:32

no longer in save, you can't go back into

39:34

save, you go back to residency or anything. And

39:37

of course, you're no longer eligible for PSLF.

39:39

So refinancing is kind of a big decision.

39:42

But if you're gonna pay off your student loans anyway, why

39:44

not save two or 3% on them? It

39:46

still makes sense. We still have

39:49

our partners for student loan refinancing here

39:51

at whitecoatinvestor.com. It's under the recommended tab.

39:54

If you go to the website, we're still

39:56

giving away cash, you're still getting the fire

39:59

your financial advisor. for free if

40:01

you sign up to refinance

40:04

through our links. So it's a way better deal

40:06

than going directly to them, but let's be honest,

40:08

the volume's way lower, right? Because interest rates went

40:10

up, number one, and SAVE became

40:12

so generous. So not nearly as big

40:14

a part of the business as it used to be a few years

40:16

ago, but it still makes sense for

40:18

lots of people to use. Yeah, your loans are

40:21

not 0% just because they're

40:23

not going up in residency. You're still paying

40:25

some interest. So hope that answers your question.

40:28

Now, as I mentioned at the top of

40:30

the podcast, SoFi is helping medical professionals like

40:32

us bank, borrow, and invest to achieve financial

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whitecodeinvestor.com/SoFi. One more time, that's whitecodeinvestor.com/SoFi.

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Loans originated by SoFi Bank N.A. NMLS 696891. Advisory

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with risk, including risk of loss, additional terms and conditions

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may apply. All right, thanks

41:02

for those of you leaving us a five-star review

41:04

and telling your friends about the podcast. Recent one

41:06

came in from Woof755, who

41:09

said, essential financial podcast. Dr. Jim Dolley has

41:11

been looking out for docs for well over

41:13

a decade. He provides evidence-based and influence-free advice

41:15

in order to help docs get their finances

41:18

in line. Absolutely essential, listen,

41:20

five stars. Thanks for that great

41:22

review. It really does help.

41:24

Don't forget, scholarship time, right? Apply,

41:27

please volunteer to be a judge. Don't

41:30

forget that

41:33

it's the new medical year. Watch out

41:35

for those new interns, new residents, new

41:37

students. Make sure they're getting the financial

41:39

literacy they need. Please pay this wonderful

41:42

gift that we've all been giving to

41:44

be financially literate. Please pay it forward,

41:47

right? There's somebody out there that you

41:49

might not feel like you know that much, but you

41:51

know more than somebody that you're interacting with. I'm

41:53

always appalled by the questions I get in

41:56

real life from real

41:58

intelligent doctors that don't know. all

42:00

that much about finance, you can

42:02

help them. Please do, please do, we

42:04

appreciate it. Okay, that's the end

42:06

of another great podcast. Keep your head up, shoulders back. You've

42:08

got this and we can help. We'll see you

42:10

next time on the White Coat Investor podcast. The

42:13

hosts of the White Coat Investor

42:15

are not licensed accountants, attorneys, or financial

42:17

advisors. This podcast is for your entertainment

42:20

and information only. It should

42:22

not be considered professional or personalized financial

42:24

advice. You should consult the

42:26

appropriate professional for specific advice relating

42:28

to your situation.