Financial Life without WCI: Unveiling the Incredible Path to Success!

By Dr. James M. Dahle, WCI Founder

Long-term readers of this blog know that it has grown into a successful business. Around 20 people write articles for The White Coat Investor, and 15 employees, many of whom work full-time, handle the operations of WCI. The income from this firm has clearly had a significant impact on our financial life, the lives of our employees, and the lives of our favorite charities. I’m occasionally asked, “What would your financial life look like if WCI had never taken off?”

The editorial staff has encouraged me to write this post, because they’re convinced you’ll like it. I’m not so sure, but let’s find out!

Life Before The White Coat Investor

Those who have read The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing should be familiar with our finances for the first decade after medical school. Katie taught school throughout my internship year and subsequently became a stay-at-home mom. For three years as a resident, I earned about $37,000 per year, and then roughly $120,000 as a military physician for four years (plus a little extra from moonlighting). I worked for two years in a partnership track at a small, democratic emergency medicine group, earning around $200,000 per year. Then I found a partner. We were millionaires a year later, having been out of residence for seven years and earning an average of $180,000 a year. The WCI blog was begun halfway through that partnership track. However, the business of WCI was still at least a couple of years away.

WCI made no profit in 2011. It made $5,000 in profit in 2012. It made $20,000 in profit in 2013 (the year we became billionaires). Clearly, the time I invested into WCI those first several years deducted rather than increased to our income and net worth. It took several years for WCI to make enough money to aid, let alone replace, my physician salary. It turns out that being an overnight success takes years.

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Hypothetical: WCI Never Got Off the Ground

What would have happened to our finances if we hadn’t received that extra revenue from WCI? Our initial financial plan, developed during residency, predicted that we would be financially self-sufficient by the time I was 51. It also predicted that my income as a student will be only $225,000. My full-time physician income was more than double that by the time I was a billionaire. Even if nothing else changed, we would have clearly met our goal by my late 40s. I would have probably continued to work full-time until that point, then cut back to part-time, as was the intention from the start.

Given how we’ve spent over the years, we’d probably be saving 30%-45% of our gross income every year and living a very similar lifestyle to what we’ve been living up until the last few years (we couldn’t have traveled as much as we do now while still working 15 shifts a month).

We would have improved our boat anyway, but it would have been a year or two later. We would not have done our major home renovation with the beautiful new garage and kitchen, the fire pole and climbing wall, and the WCI office space and recording studio if it hadn’t been for the WCI office space and recording studio. We would have done a few smaller modifications.

Our portfolio would be smaller, but the make up of it would look pretty much the same. In fact, it hasn’t changed much at all in the last 18 years.

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What About That Entrepreneurial Spirit? 

WCI has always been a for-profit company. I was trying to make money, but I wasn’t very successful. But I told myself that if I didn’t make $1,000 a month from it within two years, I would stop blogging. I just about made it.

Perhaps you’re thinking what the alternative would have been. It intended gonna be a small real estate empire. Start buying and managing investment properties, that’s fine. I believe I would have entered the short-term rental sector a few years ago. I’m still persuaded that short-term rentals are the quickest and most reliable means to financial independence.

Think about it. If you manage them yourself, a 20% cash-on-cash return on a short-term rental is completely reasonable. Yes, it looks a lot like a second job, and that’s why it pays so well. But let’s say you buy five $400,000 properties with 25% down payments. You’ve put down $500,000 on $2 million of properties, and you’re earning $100,000 per year total on them. That’s financial independence for a lot of people. It doesn’t take that long to save up $500,000 on a doctor’s income. No doctor is ever more than a decade away from financial independence, and with short-term rentals, it could be half that.

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But if I had gone that route, of course, you wouldn’t be reading this post right now.

What do you think? Do you think most doctors can become financially independent by their early 50s? Why or why not? Comment below!

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