{"id":379709,"date":"2025-12-31T11:58:15","date_gmt":"2025-12-31T11:58:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/379709\/"},"modified":"2025-12-31T11:58:15","modified_gmt":"2025-12-31T11:58:15","slug":"living-against-wci-advice-awa","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/379709\/","title":{"rendered":"Living Against WCI Advice (AWA)"},"content":{"rendered":"

Followers of The White Coat Investor lie on a vast spectrum in their approach to key financial activities (earning, spending, saving, investing, and giving), ranging from zealous adherence to aloof appreciation. Sometimes, people zag when the WCI community zigs, and I have appreciated that I’m allowed to disagree on Vanguard<\/a>, REITs<\/a>, and tithing<\/a>.<\/p>\n

But WCI founder Dr. Jim Dahle did not disagree with me to the point of advising readers or me against using alternative financial products or investing in private REITs. In this column, I reflect on the ways in which I have acted Against WCI Advice (AWA).<\/p>\n

Buying a House During Residency<\/p>\n

Thanks to Economic Outpatient Care<\/a>, I bought an apartment unit during my MD\/PhD training in a very high cost-of-living area on the East Coast. At the time, I still had at least six years remaining in my program, and the \u201ctipping point\u201d for when buying was cheaper than renting was less than five years in my neighborhood. Like many people, I thought renting was \u201cthrowing money away\u201d and felt uncomfortable managing a six-figure amount that my parents had gifted me over the years.<\/p>\n

When I discovered WCI a couple of years later, I started asking \u201cwhat ifs\u201d about my AWA housing purchase during medical school<\/a>. I kept track of my return on housing and the hypothetical return of investing the down payment in an S&P 500 index fund for comparison. While my wife and I lived in the apartment, the comparison was a wash because of the implicit rental income<\/a>. But as we increasingly wanted to move to a different state for my residency, I worried about selling the apartment.<\/p>\n

My worry was warranted. As soon as I matched to my preferred residency program<\/a> on the West Coast, we listed our apartment for sale. Due to the unexpected unique constraints of our HOA, we could not sell it in three months, so we rented it out.<\/p>\n

Being an out-of-state landlord has not been as difficult as we feared, thanks to our great tenants and building management. The additional monthly income has helped our cash flow, especially with the growing expenses of our new daughter. As long as we sell in the next couple of years, we may have enough partial exclusion<\/a> to not pay any capital gains tax. Nonetheless, the lump-sum cash from the sale would have given us greater flexibility if we wanted to buy a house . . . at least a couple of years after my first job as an attending<\/a>.<\/p>\n

Verdict: To be determined. But it\u2019s looking like the housing purchase AWA was not wise.<\/p>\n

Buying a Certified Pre-Owned Vehicle Rather Than a Beater<\/p>\n

I am not a car guy. When my wife and I had to buy a car in 2023, many 10-year-old cars, which may not even qualify as beaters<\/a> for WCI, met my minimum requirements: Bluetooth connection, rearview camera, and front-seat warmers. But used cars were still too expensive relative to their original MSRP and listed prices on Kelley Blue Book, Edmunds, or other websites.<\/p>\n

Instead of buying a brand-new car or a beater, we bought a certified pre-owned (CPO) hybrid sedan that was three years old for $26,600. The price was reasonable given its lack of accident history, low mileage, and cleanliness. Because it was CPO, its original manufacturer\u2019s warranty still applied. We intend to drive it until we cannot drive it anymore, so we are hoping that the maintenance, insurance, and fuel costs over its lifetime will be less than what they would have been with a non-hybrid beater (gasoline is expensive on the West Coast!).<\/p>\n

If we spent half the amount and invested the rest, we would have had about an extra $15,000 after 10 years. Will driving our CPO be worth the extra $2,000-$3,000 per year? So far, it appears so. We have saved 20%+ of our household gross income while having peace of mind. Although I think that the importance of the latest safety features is often overblown, I don’t think we would have felt safer driving a 10+ year-old beater with our new daughter in the backseat. If anything, we sometimes wonder if we should have spent a little more so that we could drive to trailheads that require an all-wheel drive or higher clearance for access.<\/p>\n

Verdict: Technically AWA, but I followed the spirit of the advice.<\/p>\n

More information here:<\/p>\n

The Cheapest Way to Own a Car<\/a><\/p>\n

Why I Keep My Rusty Car<\/a><\/p>\n

Owning Crypto Rather Than Bonds<\/p>\n

I have written about why I own crypto at its lows<\/a> and highs<\/a>, even though crypto probably lies somewhere between whole life insurance and stock-picking in terms of AWA investing strategies. Given that Jim is also against owning 100% stocks<\/a>, I have doubled down on investing AWA by not owning any bonds. Nonetheless, I have tolerated my portfolio\u2019s volatility through two 20%+ declines in the stock market (three if we count the post-Liberation Day crash in 2025) and a major crypto crash in 2022. My risk tolerance has rewarded me with a higher annualized return.<\/p>\n

Despite the aggressive risk profile of my \u201cfinancial independence portfolio,\u201d our asset allocation for all financial assets is more conservative. We have an emergency fund that allows us to sleep at night. Morgan Housel, Charlie Munger, and Warren Buffett have influenced us to own enough cash so that we would never interrupt compounding by withdrawing Roth IRA contributions or HSA funds. Only the most extreme scenarios would make us look for promotional 0% APR credit card balance transfers. Until I start investing in a taxable account for financial independence, the size of our emergency fund<\/a> will likely stay the same.<\/p>\n

Verdict: AWA has returned more money, albeit with a small asterisk.<\/p>\n

Abandoning Small Cap Value Stocks<\/p>\n

While I have not abandoned my allocation to domestic and international small cap value (SCV) stocks yet, I may recommend simplifying our asset allocation at the next annual financial review with my wife. My recommendation to only own the total domestic and international stock market index funds (e.g., VTI, VXUS) will not be based on performance. As of this writing in 2025, though domestic SCV is underperforming the broader stock market, my preferred SCV investments AVUV and AVDV have outperformed VTI and VXUS, respectively, since 2020.<\/p>\n

Rather, I have become more committed to simplicity<\/a>* as I realized that any future outperformance might not be worth the headache. I might seem faint of heart as I have owned SCV stocks for only a fraction of the three decades that Jim has stuck with SCV stocks<\/a>. But how I ended up with SCV stocks is a matter of imprinting<\/a>. When I first learned about personal finance and investing, the WCI and WCI-adjacent resources (e.g., Rick Ferri, Paul Merriman) shaped my view on asset allocation. Since then, I have discovered simpler ways to Dublin from other financial educators who are respected by the WCI community (e.g., JL Collins, Big ERN). I have become ambivalent about SCV after reading convincing arguments for and against factor investing, and now, simplicity might tip the scale against owning SCV stocks.<\/p>\n

Abandoning SCV sooner rather than later might be best because my contributions are going to matter even more than my portfolio\u2019s return when I become an attending. \u201cHow much\u201d I save<\/a> will matter more than the \u201cwhat.\u201d Because our contributions to 401(k)\/403(b) will constitute the majority of our savings, maintaining our current allocation to SCV would be challenging. The employer\u2019s defined contribution plans probably will not have AVUV (or similar investments) available, so if the plan allows, I will have to open self-directed brokerage accounts that do not allow automatic investing (that is, automatically buying AVUV with new contributions). Along with the additional hassle, the lack of automation may negate any outperformance from AVUV.<\/p>\n

Verdict: I don\u2019t care if it\u2019s AWA or going to cost me money. I will do it anyway!<\/p>\n

[AUTHOR’S NOTE: *I acknowledge the apparent irony of owning crypto and abandoning SCV stocks, although crypto and stocks are more different than large cap and SCV stocks.]<\/p>\n

More information here:<\/p>\n

Partner-Centered Personal Finance<\/a><\/p>\n

The Perspectives of an Older Investor vs. a Younger Investor<\/a><\/p>\n

\u2018You Can\u2019t Do It All Wrong’<\/p>\n

Although these decisions are AWA, I would not categorize any of them as a financial mistake or negligence. The first decision was before I discovered WCI, and it has not negatively impacted our financial well-being. The second and third decisions were intentional and reasonable. The final, not-yet-made decision has the greatest potential to be a mistake. Even then, my allocation to SCV for less than a decade (or any of the other three decisions) will seem like a blip when I become financially independent.<\/p>\n

My wife and I will make more financially consequential decisions when I become an attending and our child is older. But if past behavior is any guide for future behaviors, we will get it mostly right<\/a> and be just fine.<\/p>\n

In what ways do you invest AWA? Have you gotten it mostly right anyway? Have you made any major mistakes?<\/p>\n","protected":false},"excerpt":{"rendered":"Followers of The White Coat Investor lie on a vast spectrum in their approach to key financial activities…\n","protected":false},"author":2,"featured_media":379710,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[64417,28,70511,147,530,70512],"class_list":{"0":"post-379709","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-attending-physician","9":"tag-business","10":"tag-new-attending-physician","11":"tag-personal-finance","12":"tag-personalfinance","13":"tag-post-residency-planning"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/379709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=379709"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/379709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/379710"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=379709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=379709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=379709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}