We are so excited to welcome Dr. Jim Dahle back to the podcast after a few months off as he recovered from a climbing accident. Back in August, Jim was climbing the north face of the Grand Teton with his long-time climbing partner and friend. He had a serious fall and sustained some big injuries. He is very lucky to be on his way back to a full recovery. Today, we are telling his story. You will hear from all of the people who had a hand to play in his rescue, hospital stay, and overall recovery. It is an adventurous tale and a heartfelt story full of gratitude—both for life and for the unsung heroes in our lives. The second and final part of Jim’s story will be next week. If you want to see photos and video footage from the climb and the rescue, we encourage you to check out our YouTube channel.
The Basic Process of Climbing
We know that a lot of people listening or reading this episode do not know the ins and outs of climbing. Jim explained the basics of rock climbing and the typical climbing setup to help everyone understand the story a little better. In climbing, there’s usually a two-person team. One climber leads while the other belays. The belayer holds the rope to catch the leader in case of a fall. The belayer is usually secure and safe, while the leader, known as being on the “sharp end of the rope,” faces the real risk. The leader places protective gear as they ascend, so if they fall, they only drop to the last piece of protection.
Once the leader finishes a pitch (a section of the route), they secure themselves and then help the belayer, who follows as the “second climber,” ascend safely with minimal risk. Climbing teams often alternate leads, which spreads out the risk. A full climb might have multiple pitches, making the ascent a long, careful process. Speed and efficiency in transitioning between roles become essential on longer climbs.
Jim also reflected on his personal climbing journey. As he nears 50, he knows his ability to tackle really challenging routes won’t be something he can do forever. While his physical strength is not what it once was, his experience has grown and he knows what he is capable of doing. He talked about the satisfaction he felt from climbing Half Dome safely. The experience was tough yet rewarding, and he was excited to tackle the north face of the Grand Teton.
More information here:
WCI Travel Club: Meaningful Trips to Half Dome, Thailand, and Alaska
Climbing in the Tetons
How to Add Adventure to Your Life
The Climb and The Fall
Dr. Christian Feinauer is Jim’s climbing partner. Christian is an experienced ER doctor from Mill Creek, Utah, and he has been climbing with Jim for more than 25 years. They met in medical school and quickly bonded over their shared love for the outdoors, adventure, and competition. Together, they’ve scaled cliffs across various states, explored slot canyons, and tackled rivers. Their friendship has been built on years of shared experiences, from climbing in Utah, Colorado, and Wyoming to international adventures in British Columbia and Italy. This deep bond, rooted in friendship and mutual respect for each other’s skills, has allowed them to push each other into new challenges.
The north face of the Grand Teton is an iconic yet formidable climb, attracting experienced climbers who want to test themselves against its technical demands and steep pitches. It is also one of the more dangerous routes, with shifting rocks, loose holds, and high exposure to the elements. Christian said he prepared thoroughly for the climb, despite finding surprisingly limited information about the route. This lack of detail was unsettling, considering the popularity of the Grand Teton and the danger associated with this specific path. Most online resources only described general ledges and loose rock, with advice to “keep going up and avoid chossy (unstable) areas,” leaving them to rely heavily on their judgment and experience.
Their ascent began smoothly, and they made good progress across the glacier as the sun rose over the Tetons. The two doctors were aware of the potential hazards but remained confident in their abilities. At one point, they witnessed an avalanche break off to the right side of the glacier, which, while not directly threatening them, served as a stark reminder of the ever-present dangers. Reaching the bergschrund—a deep gap between the glacier and the rock face—they changed from crampons to climbing shoes and began the rock-climbing portion of their ascent. Jim took the lead, navigating through a mix of stable and loose rock, carefully placing gear to protect against a potential fall.
The route soon revealed its treacherous side. Jim encountered a section where all four of his holds were loose, which is a precarious situation that climbers try hard to avoid. Just as he reached for a more secure spot, a handhold broke loose, causing him to fall about 30 feet. The impact left him unconscious, hanging upside down, with visible blood on his face. Christian realized Jim had not only fallen but was in serious trouble. Despite the gravity of the situation, he quickly assessed the scene, tying off the rope and “escaping the belay” to free himself so he could scramble up to his friend. Finding Jim unresponsive, breathing heavily, and bleeding, Christian knew he had to act swiftly.
After securing Jim in a more stable position, Christian worked to wake him up. When Jim finally regained consciousness, he was clearly disoriented, repeatedly asking, “Where are we?” and “Is this a dream?” His helmet was intact, but the force of the fall had left him severely concussed and likely suffering other injuries. Realizing that Jim was in no condition to continue the climb or safely rappel down, Christian decided he needed to call for help. He was relieved when he realized they had cell service and he could just call 911 rather than digging their emergency call device out of Jim’s backpack. Remarkably, the call went through, and he was quickly connected to the Jenny Lake Rangers, who specialize in high-altitude rescues.
The Jenny Lake Rangers were already assembled near the helicopter, preparing for a training exercise when they got the call. Hearing the details—a head injury, unconsciousness, and the precarious position on the north face—the rangers immediately understood the urgency. The north face of the Grand Teton holds a significant place in climbing lore, known for its technical difficulty and the potential for serious accidents. The rangers had dealt with rescues on this route before. Recognizing the potential complexity of this new mission, the rangers mobilized quickly, shifting their training exercise into a full-scale rescue operation. Christian continued monitoring Jim’s condition, which fluctuated as he struggled to remain alert, and waited for help to arrive.
As they awaited the rescue, Jim, though conscious, remained foggy, asking the same questions repeatedly and struggling to process their location and circumstances. Christian’s training and experience as an ER doctor proved crucial in keeping his friend safe and stable, but he knew the risks they faced if the rescue was delayed. Thanks to the quick response from the rangers, a helicopter was soon en route to locate the climbers and devise a strategy to extract them from the sheer cliff face, aiming to bring them both back down to safety.
Come back next week for interviews with the Jenny Lake Rangers, doctors, family, and WCI staff who all share the details of the rescue as well as Jim’s hospital stay and recovery.
If you want to read more about Jim’s experience, see the WCI podcast transcript below.
Milestones to Millionaire
#195 — Radiologist Goes Part Time
This radiologist has had so much success and is celebrating cutting back to part time. He has a net worth of roughly $11 million, and he could have retired if he wanted. He said going part-time has re-sparked his love for his work, and he thinks he will keep working far longer than he thought he would want. His biggest advice to you is to invest in more than just money. It is just as important, if not more important, to invest in your marriage, your kids, your family, yourself, and your community more than anything else.
Finance 101: Real Estate vs. Stocks
When it comes to investing in real estate vs. stocks, there tends to be a strong divide between advocates of each. Real estate investors often criticize stock investors for buying what they see as speculative, “paper” assets that can be volatile and manipulated. On the flip side, stock investors sometimes view real estate enthusiasts as people looking for a quick profit or an extra job. The reality is that both types of investments can be effective paths to wealth if managed well. Both real estate and stocks have unique advantages and disadvantages, and neither is inherently superior; the best choice depends on one’s goals, skills, and comfort with each investment’s demands.
One of the main benefits of stocks is that they represent ownership in companies, meaning stockholders profit from business success through dividends and price increases as the company grows. Real estate, on the other hand, generates profit primarily through rental income and property appreciation. While both investments offer the potential for passive income, stocks are often seen as more passive since they don’t require active property management, which can be time-intensive and require significant effort. However, real estate can offer more immediate income returns, which may appeal to those seeking consistent cash flow rather than long-term growth.
Tax advantages also play a big role in the appeal of both asset classes. Stock investors benefit from tax-protected accounts like 401(k)s and lower tax rates on qualified dividends and long-term capital gains. Real estate investors can leverage depreciation to offset rental income and potentially avoid paying taxes on it. Real estate offers opportunities for tax-efficient strategies such as property exchanges to defer capital gains taxes. While stocks offer liquidity, allowing investors to buy and sell quickly, real estate requires a longer commitment. Ultimately, both real estate and stocks can be valuable components of a diversified portfolio, and you don’t have to choose between them. Each can complement the other, providing balance and resilience in your investments.
To learn more about real estate compared to stocks, read the Milestones to Millionaire transcript below.
Sponsor
WCI Podcast Transcript
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 392, The Heroes of My Life – Part One.
This episode is brought to you by SoFi, helping medical professionals like us bank, borrow and invest to achieve financial wellness. SoFi offers up to 4.6% APY on their savings accounts, as well as an investment platform, financial planning and student loan refinancing, featuring an exclusive rate discount for med professionals and $100 a month payments for residents. Check out all that SoFi offers at whitecoatinvestor.com/sofi.
Loans are originated by SoFi Bank, N.A. NMLS 696891. Advisory services by SoFi Wealth LLC. The brokerage product is offered by SoFi Securities LLC, member FINRA/SIPC. Investing comes with risk, including risk of loss. Additional terms and conditions may apply.
Welcome to the White Coat Investor Podcast. I know many of you listening to this podcast in particular, this particular episode are not regular listeners to the White Coat Investor Podcast. So, let me introduce it to you very briefly.
This is a podcast about personal finance investing for high earners, mostly doctors, probably 75% of the regular audience is doctors. And other people listen to it, attorneys, small business owners, engineers, tech workers, etc, but typically high earners. That’s what most of the financial information is geared at.
Now the truth of the matter is 95% of personal finance and investing is the same for everybody. And only about 4% of it is specific to high earners. And only about 1% of it is specific to doctors. Even if you’re not in that target audience for this podcast, you’d probably find most of the stuff on this podcast still pretty relevant and useful to you. So we encourage you to stick around, even if you kind of just came for this particular episode.
This episode is not going to be what we usually talk about on the podcast. We usually talk about financial planning, investing, how to make your career better, things like that. Beating burnout, those sorts of problems. The real first world problems for most of the listeners, but they are problems nonetheless.
This podcast isn’t going to be like that. And in fact, I think a lot of the people listening to this are not doctors at all. They’re going to be climbers or other outdoor adventurers, friends of mine, family of mine, people who just heard something bad happened to me and wanted to hear the details. And that’s okay. We welcome you to the podcast. We’re glad you’re here. We hope you find some of this useful, both this episode as well as what we put on most podcasts.
But for the next couple of weeks, we’re going to talk about some trauma, some trauma that myself and my family and those of us here at the White Coat Investor have been through. More importantly, and I’m excited to do this, I’m going to introduce you to some of my heroes, the heroes of my life. I have a lot more heroes now than I used to have in my life. And I’ve been thanking doctors and other listeners to this show for what they do in their daily lives for many years. I have a new level of gratitude when it comes to that. And you’ll soon understand why as you listen to the rest of the story.
Now, for regular listeners or those interested, really anybody, be aware that we have a real estate webinar coming up. And I’ll be talking about real estate. This is the 12th of November at 06:00 PM Mountain.
We’re going to be talking about how to boost your returns, lower your taxes and build wealth in real estate. We’ll talk about how current interest rates are impacting the real estate market, how real estate can fast track your financial freedom, the pros and cons of real estate investment strategies, choosing the right real estate investments for your portfolio, and how to maximize some massive real estate tax deductions that are out there. We’ll answer your questions in a Q&A session afterward. It’s going to be live November 12, 06:00 PM, sign up whitecoatinvestor.com/realestatewebinar. It’s totally free.
As you listen to this podcast, keep in mind that there is material on the YouTube channel version of this podcast that is not on the audio version of the podcast. I’ve included pictures from the climb, from the rescue, and videos of the actual rescue that are quite a bit more interesting than anything I can describe verbally. So, highly recommend the YouTube version of this particular podcast.
Since many of you aren’t doctors that are listening to this, I’m going to try to do a good job of defining the medical terms we use in this podcast and the next. Since many of you are not climbers, I’m going to try to do a good job of describing the climber terms that we use so that normal people can understand those. I’m going to do the best I can. If I don’t define a term and you don’t know what it is, please just Google it. I’m sure it’ll be pretty quick to come up.
CLIMBING AS AN IDENTITY
Identities are interesting. Many of us out there identify ourselves by our work. We’re a doctor. We’re a physician. We’re a dentist. We’re an attorney. We’re a business owner. We identify ourselves as husbands or wives or brothers or sisters or parents or whatever.
One of the things I have identified as for much of my life is as a climber. I’ve been climbing since I was 14 years old. I was introduced to it in Boy Scouts. We’d go to a local crag and spend an hour or two scampering around on our top rope and trying to get to the top of some ridiculously hard climb while wearing nothing but our usual gym shoes. And it always seemed very difficult back then.
But as I became an older teenager, I became more and more interested in it. In fact, my first big climb was Denali. The summer I turned 18. Just before I turned 18, I spent three weeks on Denali in Alaska and successfully reached that summit. And after descending from there, I was hooked and I’ve been climbing ever since. Other than a few very short periods in my life when I wasn’t able to climb for whatever reason, I’ve been climbing. I love being in the mountains. I love the views. But it’s not about the summit most of the time. It truly is the journey along the way that is most enjoyable.
Climbers are interesting people. A lot of us are dirtbags. We get used to making some financial sacrifices in order to do what we love. We may be living out of a van, quite literally, camping out, eating pretty crummy food just in order to be able to have the time to spend in the mountains. And that’s been me in a lot of times in my life. I can remember sleeping in a ditch down outside of Las Vegas in a tent and getting up at 04:00 in the morning to hike in to a rock climb, spend all day climbing.
And the type of climbing I liked is not necessarily particularly gymnastic climbing. I’ve never really loved climbing indoors, for instance. Climbing indoors feels to me like skiing at a ski resort. It’s like skiing, but it’s not the same thing. And climbing in the gym is like climbing, but it’s not the same thing. It’s like a workout for climbing.
I like long routes in the mountains. Spending all day on eight pitches of a 5.8 climb, which is a climbing rating, eight pitches or eight rope lengths, sounds like a great day to me. A little bit of planning, a little bit of a hike in to get there, some great times with somebody I care about, and a little bit of risk and some obstacles to overcome. It feels pretty good to get to the end of a day like that. I’ve had many, many great days like that in my life.
I’m not the world’s best climber by any means. In fact, I climb routes that are considered by most to be quite moderate. Not necessarily short or easy, but not terribly difficult in terms of sheer difficulty of the hardest move on the route.
Now, climbs are rated by the hardest move on the route. So, if the whole climb is very, very easy, but there’s one terribly difficult move, it gets a difficult rating. And most climbing in the U.S. uses the Yosemite decimal system. So, a one is basically walking down a trail. A two is an uphill trail. Three is where you’re starting to scramble. Maybe you’re using your hands a little bit as you scramble around, but you don’t really feel like you need a rope. At a four, most people want a rope. Guides would say they don’t need a rope, but their clients do on a class four climb.
Once you get to class five climbing, that’s where most people are going to be using a rope. Obviously, there’s some people out there that free solo, climb without ropes. I’m not one of those people for the most part. And so, when I do fifth class climbing, I’m typically using a rope. And that starts at 5.1, 5.2, 5.3, 5.4, 5.5. And actually these days goes all the way to 5.15. A 5.15 climb is far more difficult than anything I’ve ever climbed and usually involves overhanging, clinging to the tiniest of holds for 50 or 100 feet until you get to the top of that particularly difficult climb. Most long climbs, the type I enjoy, are not 5.15s. Most of them will have a moderate rating like a 5.7, 5.8, 5.9, 5.10, those sorts of ratings. That’s most of the climbing I’ve done over the years because I love long climbs in the mountains.
THE BASIC PROCESS OF CLIMBING
The basic process of climbing is probably important for people to understand before listening to the rest of this podcast. A typical climbing team is two climbers. You have one that is doing the climbing, doing the leading, and the other person is holding the other end of the rope. That’s called belaying. They are the belayer and they are secured either on the ground or to the side of the mountain.
When they are doing that belaying, they’re essentially in quite a safe place. There’s risks to everything, I suppose, but you’re pretty safe while you’re belaying. The leader, on the other hand, is not safe. They are the one taking the risk. The phrase is the sharp end of the rope. As you lead, you put in protection. This is gear that attaches you to the cliff that you are ascending. It might be bolts that have been drilled into the cliff and you’re just clipping a carabiner onto them and attaching your rope to it. Oftentimes, it is little metal chocks that you wedge into a crack or active camming devices that push off on both sides of a crack. Then you attach the rope to that.
This way, if the leader falls, they will fall down to the last piece of protection they placed and that much further. If you put a piece in every 10 feet, you could fall 10 feet to that last piece of protection and another 10 feet beyond it. A 20-foot fall would be what you are risking if you are putting in protection every 10 feet. If you’re putting in protection every 5 feet, you’re risking a 10-foot fall, etc.
That’s the way it works. When the leader gets to the end of the pitch or rope length, they secure themselves to multiple pieces of protection in the form of an anchor and are secure, often on a ledge. They then bring the belayer or second climber up. The beautiful thing about being the second climber is that you have a top rope. This rope goes straight from you up to your belayer. Your belayer is now above you. If you fall, there’s a little stretch in the rope. Maybe you fall six inches. It’s not particularly risky most of the time to be the second climber. The risk is taken by the leader.
Most climbing teams alternate pitches. One person leads one, then the other person leads one. Then one person leads one, the other person leads one. Sometimes they block them together and lead three or four in a row and then switch. Sometimes one climber does all the leading. For the most part, they swing leads. One person leads one and then the other. You’re really only at risk half of the time because you’re only leading half of the time. The rest of the time, your risk is much, much lower.
That’s the basic process of climbing. As you work your way up a climb, if there’s 10 pitches on the climb, you will do that process 10 times where the leader goes up and then brings the belayer up. Only one person is climbing at a time. So, it can be a slow process. But the longer the route, the faster you need to do the process. It matters how quickly you can transition from one leader to the next and to do the various parts of the climb in order to get to the top. I hope that’s helpful to you.
Now, I’ve been climbing for a long time. I’m almost 50 years old. I’ve gotten to the point in my life where while my experience level is still increasing, my physical strength and physical abilities are starting to decrease. And the sum of those two things is probably now starting to decrease.
I’ve recognized this the last two or three years. I’ve been trying to tick off the hard stuff, these routes that have been on my bucket list for years that I’ve always wanted to do. The last few years, I’ve been doing quite a few of those, especially as I’ve been able to work a little bit less, thanks to the financial principles that we usually talk about here at the White Coat Investor.
An example of this is Half Dome, which I climbed last year with my main climbing partner, Christian. We spent three days on Half Dome. It took us longer than we thought it would, but it never felt particularly dangerous. It was very challenging to us, but we climbed the face of Half Dome over the course of about two and a half days.
It was a wonderful experience. It was an incredible place, just like I expected it to be. It was very hard for us, but we managed to do it safely. Neither of us had any significant falls at all during the time we were on there, and it was a great experience.
CLIMBING THE TETONS
I’ve spent a lot of time in the Tetons. Teton National Park, you may have been to, driven by, maybe even done some hikes in. When I go to the Tetons, I’m not interested in going the places most of the tourists are going. I’m interested in climbing the peaks. There are a number of high peaks in the Tetons that climbers cherish. They’ve been going there for many decades to climb these peaks. These include the Grand Teton, the Middle Teton, the South Teton, Mount Owen, and Teewinot. That’s the five main peaks there. Another major peak is called Mount Moran, which is also quite high.
I’ve climbed all of these peaks by various routes over the years. I’ve done them with friends. I’ve done them with family. I’ve climbed them with my wife. I’ve climbed them with my children. It has been a wonderful time to experience these. A lot of these routes are just fantastic climbs. They are sunny. They have solid rock on them. They are beautiful. They’re all in an incredibly stunning location.
Sometimes, there’s some snow or ice involved, especially if you climb earlier in the summer than later in the summer. Sometimes, the routes have some less than stunning aspects to them, maybe some loose rock, maybe some challenging route finding. But many of the climbs are not that hard, incredibly beautiful, and fairly safe as rock climbing goes. Not all of them are, however.
In these last few years, when I’ve been trying to tick off the hard stuff I always wanted to do, one of the routes I did with a friend was called the Cathedral Traverse. This is a climb up Mount Teewinot, along the ridge between Teewinot and Mount Owen, to the summit of Mount Owen, and then down across the Grandstand, the formation of rock between Mount Owen and the Grand Teton, up the north ridge of the Grand Teton, and then down the Grand Teton back to the parking lot.
This is often done in a single push with no rest, and that’s how we did it. We started at 01:00 in the morning or so and saw the sun rise on top of Teewinot, and the sun set on the summit of the Grand Teton and got back to the car six hours later. We were exhausted. We’d been moving for 26 hours at the time, but it was a pretty incredible day and a pretty awesome accomplishment for us. Now, that has been done in as little as eight hours by incredible climbers that don’t use much in the way of ropes or protection, but that is not the kind of climbers we are. We’re much more normal climbers, and it took us over a 24-hour period to do it.
Now, while climbing the north ridge of the Grand Teton, we got a pretty good look at the north face of the Grand Teton, and this is a route I’ve wanted to do for many years but did not. Why not? Because it’s scary. It’s a scary route. It’s the longest climbing route on the Grand Teton, which is the highest mountain in the Tetons. However, it’s also a pretty incredible route.
A climber who did it in 1985 said, “The north face of the Grand is the most hauntingly beautiful place I’ve seen. You’re above a glacier in a high jagged surf with slowly but constantly changing light conditions. It’s visually breathtaking. Each year, changing snow and ice conditions may make it seem an entirely different climb from one year to the next.”
And it is. It’s a beautiful place. I’ve been staring at that face for decades, wanting to climb it. You can see it when you climb Teewinot. You can see it when you climb Mount Owen. You can see it when you do the north ridge of the Grand. You can see it from the valley. It’s an iconic face, and it is considered one of the 50 classic climbs of North America by a book of the same title, and has been on the bucket list of many climbers in the past.
However, it has been the scene of at least one major rescue. There’s a movie out there called The Grand Rescue, and it’s the story of a rescue that became legend. In 1967, on the north face of the Grand Teton, seven rescuers risked their lives to save a severely injured climber and his companion. The rescue took three harrowing days and pushed the team to new abilities. Remarkably, the injured climber was critical of those who risked their lives to save his. Two climbers became stranded high on a ledge after a rock fall caused a serious injury, and the rescue team came to their aid, relying on innate skill and trust in one another to accomplish the daring rescue.
In this movie, The Grand Rescue, the rescuers and survivors relived the trial with honesty and unabashed candor. The rescue captured the attention of the nation and left a lasting impression on all involved. So, if you’re interested in learning more about rescues on the north face of the Grand Teton, I’d suggest watching that movie. I think it came out in 2011 and can be found on the internet.
The website Only in Wyoming said this about that rescue, and this was one of the few things on the internet about this route that I read prior to going to climb it. It says “In the 1960s, mountaineering and rock climbing was still a niche sport. There weren’t any rock gyms, and climbers were seen as part of a counterculture in the mountains of the United States.
One of the most popular climbing destinations in the country was Grand Teton National Park. It offered dozens of technical routes, stunning scenery, and a welcoming community of alpine climbers. For years, the north face of the Grand Teton was considered one of the most challenging climbs in the world. This intimidating route was technical, dangerous, and on many climbers’ bucket lists. It was first ascended in 1936, but it had eluded many climbers in the years following.
Lorraine Hugh and Gaylord Campbell were attempting the route and had nearly completed their climb on August 21st, note that date, 1967, when disaster struck. Just below the summit, large rocks broke loose and sent Campbell tumbling down the rocky face. He was injured badly. Hugh made a splint with her ice pick and wrapped her partner in a sleeping bag and began to cry for help. She flashed SOS with her flashlight but never saw any response. There was no way for her to make it down the face with Campbell on her own.
Miraculously, two climbers heard cries for help from the north face while they were climbing Mount Owen. They raced down to the Jenny Lake Ranger Station and reported to Ralph Tingey. They showed up at Tingey’s Ranger cabin door to report that while on Mount Owen, they’d heard cries for help from the north face.
Ralph Tingey, just 22 years old, called out to the other rangers and began to assess the situation. There had never been a rescue on the north face. Tingey saw Hugh’s flashlights and responded in kind, but she was never able to make out his response. As the pair spent their first night on the Grand, she was unaware that a team of talented mountaineers was making their plan.
Tingey, along with other rangers Pete Sinclair and Rick Reese, park employees Ted Wilson, later the mayor of Salt Lake, and Mike Ermarth made up the rescue team. It just so happened that world-class mountaineers Lee Ortenburg and Bob Irvine were on the summit of the Grand and quickly descended to help the efforts.
The rangers were airlifted to a ledge on the north face and began their daring rescue attempt. The only way to help Campbell was to lower him 2,000 feet to the Teton Glacier where a helicopter could remove him. He was placed in a stretcher to stabilize his broken leg and the rescue began. They radioed for the needed supplies and had to spend a night on the mountain waiting for the helicopter to deliver the needed rope, cables and morphine.
The next day they were able to carefully descend 1,100 feet. The climbers spent one more night on the Grand Teton before the final day when they reached the Teton Glacier. The team worked for hours to create a spot for the helicopter to pick up Campbell, and he made it to the hospital that evening. The rescue team headed back down to the Jenny Lake cabin where they found a case of beer waiting for them.
After three exhausting and dangerous days on the north face, they’d achieved what many thought was impossible and saved Gaylord Campbell’s life. They never heard from Campbell after that until he criticized the rescue in a documentary. Campbell claimed the climbers should have carried him out backpack style which would have been quicker. It would have put his life at risk due to a chance of severing arteries in his leg.
I’m sorry I get emotional telling that story. It comes a little close to home now. Let me tell you a little bit about this route, the north face of the Grand Teton. The first exploration of this route was done in 1933 by Paul Petzoldt. He traversed in from the north ridge to check out the route possibilities but it wasn’t until 1936 that he made the first ascent with his brother Eldon and Jack Durrance. Durrance was an exceptional climber, one of the most famous climbers of the day and did most of the leading. They were still made up the last 500 feet and traversed off to the north ridge on what is known as the second ledge.
The complete north face wasn’t climbed until 1949 by Dick Pownall, Ray Garner, and Art Gilkey. In the fading light of dusk, Pownall unlocked the key to the upper face with his brilliant lead of the pendulum pitch. This pitch, which he swung across on the rope, penduluming, was later free climbed, obviously with a rope, not free soloing, on the second ascent in 1953 by Dick Emerson.
A description of this route is you hike up for a couple of hours on trails from the parking lot. You gain 3,000 vertical feet or so and then you leave the trail. You weave through a moraine, the debris left behind by the Teton Glacier, and climb up it and then eventually reach the glacier itself and continue to ascend with spikes on your feet called crampons and an ice axe in your hand to secure yourself to the glacier.
You ascend by this point another 2,000 vertical feet, so you’ve climbed 5,000 vertical feet since the time you left the parking lot. Then you come to the end of the glacier and you discover that it has melted away from the wall of the mountain. This is called a bergschrund or a moat, and that moat can be pretty deep. You have to get across it onto the face of the rock itself. You then climb several pitches of nondescript and difficult to describe loose rock with challenging route finding before you get into the Guano Chimney, the first named pitch on the route and obviously not always the most pleasant given that it’s often covered in guano.
That leads to what’s called the first ledge. You then ascend up this first ledge, which is quite long and actually not flat at all, then climb a pitch up to the second ledge. From that point you can escape from the route. You can get over to the usual descent route, which is on the west side of the mountain.
From the second ledge the harder pitches start showing up on this route, including the famous Pendulum pitch, as well as one that’s called the Traverse into the V, and you move on to the summit. Once you reach the summit you go down the standard descent route, which involves a couple of rappels and quite a bit of down climbing and hours of hiking. Something that’s taken me about six hours to do in the past from the summit back to the parking lot.
That’s the route that I went to climb in the Tetons on August 21st of 2024. This is something I wanted to do for a long time and planned carefully, gotten into excellent shape for, gathered all the appropriate gear for, and felt like I had the skills to accomplish.
In the rest of this podcast and the next podcast I’m going to be interviewing some guests. All of these guests are my heroes. There are other heroes that are not guests on this podcast that also had a role in the story, but let’s start by introducing the guests that are going to show up in these two podcasts.
Dr. Clint Van Hoff:
All right, thank you Dr. Dahle. I appreciate you having me here. I’m Dr. Clint Van Hoff. I currently live in Idaho Falls, Idaho. I work at Eastern Idaho Regional Medical Center and I work in the emergency department. I’m an ER physician.
Dr. Brandon Kelly:
My name is Brandon Kelly. I’m a neurosurgeon in Idaho Falls, Idaho, and I take call at a level two trauma center and I have a general neurosurgery practice and I also do complex spine reconstruction.
Ken Kries:
My name is Ken Kries. I am a Jenny Lake climbing ranger in Grand Teton National Park.
Mik Shane:
All right, my name is Mik Shane and I do a bunch of seasonal work in the national parks and I got a job working as a Jenny Lake ranger for Grand Teton National Park about eight years ago.
Katie Dahle:
I’m Katie Dahle. I’m married to Jim. I am the chief product officer here at the White Coat Investor and we live in the suburbs of Salt Lake City, Utah.
Dr. Jim Dahle:
Okay, let’s talk about the mountains because this is a place you and I have spent a lot of time in the last 25 years. What have the mountains meant to our family over the last 25 years?
Katie Dahle:
The mountains are a very special place to us. It’s really that the mountains are our happy place. We like to go to the mountains. There’s just something calming and peaceful about being in the mountains and just connecting you to nature. And so we spend a lot of time doing a variety of activities in the mountains from hiking to mountain biking, climbing, canyoneering, skiing. We like to be in the mountains and we get there as often as we can. There’s a reason we live at the base of the mountains and they’re a mile from our home, to be hiking and participating in the mountains.
Dr. Jim Dahle:
When we moved to Utah after my time in the military, we deliberately put a point at the mouth of Little Cottonwood Canyon, drew a two-mile radius circle around that and looked at every home for sale in that circle. Those are the only homes we looked at to buy. We wanted to be near the mountains.
Little Cottonwood Canyon has two world-class ski resorts as well as rock climbing and ice climbing and mountain biking and road biking and hiking and backcountry skiing. It’s a beautiful place. There’s a reason we live here and it’s because we like to spend time doing that stuff.
It’s great to be able to do it within minutes of the house. We ride our bike right out of the garage. There’s no driving to the trailhead and frankly, we can go trail running right out of the garage as well. It’s been a wonderful thing for us to be in the mountains.
Katie Dahle:
The Grand Teton is a special place. Regardless of whether you do it in a day and you’re starting at 01:00, 02:00 in the morning or if you’re starting from the lower saddle at 05:00 A.M., it’s dark when you first start climbing and as you watch that sun come up and you just have these glorious views, I wish I could take you to that final ridge as you’re ascending up to the summit and you’re just looking down the ridge of mountains. You’ve got Wyoming off to one side and Idaho off the other side and you just feel like you’re on top of the world. It’s really awe-inspiring.
The Grand Teton is a special place. It’s beautiful, lakes all around and it’s just got some incredible views up top. We enjoy climbing it and it’s a reason it’s sort of a bucket list item for our kids to take them when they’re in their teens to go and climb the Grand Teton. Three of our four kids have done it so far. And yeah, we just really enjoy it.
Dr. Jim Dahle:
All right. Now, 25 years ago, you married a climber. Did the risk of something happening to that climber concern you at that time?
Katie Dahle:
Well, 25 years ago, when I married a climber, he was sort of a hack climber. He only did it a little bit at the time. And really, his climbing took off in medical school when he met his friend Christian that was actually climbing with him on the day of the accident. They met in their first year of medical school. And so, they spent a lot of afternoons after class climbing in the nearby Wasatch Mountains, and that’s where he really started getting into climbing a lot more.
But as far as any concerns, no. At the time, we did a lot of outdoor high adventure activities, and everything has some risks.
Dr. Christian Feinauer:
I’m Christian Feinauer. I’m an ER doctor. I live in Mill Creek, which is kind of part of Salt Lake City. And I work at a few local hospitals around here in the ER.
Dr. Jim Dahle:
Okay. Can you tell the audience where you first met me?
Dr. Christian Feinauer:
I met you my first year of medical school because we were in the same medical school class.
Dr. Jim Dahle:
And what was I like in medical school?
Dr. Christian Feinauer:
You were always competitive in everything you did. That included school and climbing, which we did a lot together.
Dr. Jim Dahle:
Okay. We started climbing together in 1999. Basically, 25 years ago, we started climbing together. And how many different states have we climbed in together? We’ve climbed in Colorado. I think we’ve climbed together in Arizona, haven’t we?
Dr. Christian Feinauer:
Yeah.
Dr. Jim Dahle:
Certainly all over Utah, several places in Wyoming. I think we’ve been to Oregon. We’ve certainly been to multiple places in California and Nevada together to climb over the last 25 years. Any other states I’m leaving out?
Dr. Christian Feinauer:
Well, British Columbia.
Dr. Jim Dahle:
Oh, yeah. British Columbia. That’s right. We’ve been to British Columbia. And we’ve also been to Italy, done Via Ferrata together in Italy before.
Dr. Christian Feinauer:
True.
Dr. Jim Dahle:
We’ve known each other for a long time. We’ve been climbing together for a long time.But that’s not all we do together. We’ve had some other adventures together. We’ve paddled some rivers together, pack rafting, including the Escalante and the Zion Narrows in the last year. And we’ve been canyoneering together now for a couple of weeks a year for the last 10 years anyway.
Dr. Christian Feinauer:
About 10 years.
Dr. Jim Dahle:
A whole lot of time together in slot canyons. So what did you think when I called you up and suggested we go climb the North Face of the Grand Teton?
Dr. Christian Feinauer:
Well, I know that you’ve spent a lot more time in the Tetons than I have. You’ve been up to the top of the Grand several times. I’ve been up there, too. I knew the North Face was quite a bit more serious of a route, logistically. And it’s one of the 50 classic climbs in North America. So, I was game for it. It sounded like an adventure and another kind of thing to tick off the list.
Dr. Jim Dahle:
What did you think as you started doing research online and in the few available books about the route?
Dr. Christian Feinauer:
Well, for a route that’s supposed to be so classic, there was actually not a lot of information out there, which was a little unsettling because the Grand Teton gets climbed by dozens of people every day, if not hundreds. So, you’d think a route to the top that’s supposed to be so classic would have a lot more information about it. I guess I didn’t know exactly what I was going to expect because there wasn’t like really detailed descriptions about where you’re going to go. Just kind of go up to this ledge, work your way to the next ledge, keep going up, avoid all the chossy, loose stuff that you can until you make it to the top.
Dr. Jim Dahle:
As you prepared for this climb, were you particularly nervous about it? Did you feel that this was too hard for your ability? Or were you worried at all about us completing this route?
Dr. Christian Feinauer:
No, I didn’t think it was beyond our ability at all. My biggest concern was are we going to make good enough time that we can get off the top of the mountain and get back to our car before 03:00 in the morning or something like that? That was kind of my bigger concern rather than any doubt that we’d be able to do it.
Dr. Jim Dahle:
But we also had the advantage of knowing there was an escape from the route. When you get about three quarters of the way up and actually before you get to the hardest climbing, you can get off the route and get over to the usual descent route relatively easily in a place I’d been before. So, I wasn’t terribly worried. I knew if we were running late, we’d get off the thing and at least be on relatively safe ground by the time night fell. I wasn’t terribly worried about that. I didn’t know if we’d actually finish the route, but I had no doubt in my mind that we could get to where we could escape from the route without having to spend a night on that face.
We get to the glacier, it’s starting to get light. How were you feeling at that point?
Dr. Christian Feinauer:
I was feeling pretty good. I thought we were making pretty good time. I thought we might have been a little faster than that to that point, but I didn’t think we were falling back too far. I was kind of excited to go across the glacier. That was pretty fun.
Dr. Jim Dahle:
Yeah. It’s beautiful up there. At this point, the sun’s come up and we’re between Mount Owen and Teewinot and the Grand Teton on a glacier. It’s an incredible place. It’s super beautiful. And looking at the glacier, was that intimidating to you at all?
Dr. Christian Feinauer:
Well, it was a little intimidating when the big avalanche broke off to the right side and came tumbling down towards us. It looked like just a piece of that snow field sort of cut loose and tumbled down the side of the mountain. Nothing that was any danger to us, but it makes you realize that ice and snow and rock is always moving and shifting and stuff can break loose and fall at any time.
Dr. Jim Dahle:
Yeah, it certainly was a bad omen for our day, wasn’t it, looking back.
Dr. Christian Feinauer:
Yeah.
Dr. Jim Dahle:
But I agree. It wasn’t particularly intimidating to me at all. It actually didn’t even fall down the route where we were going. It’s kind of off to the side of the glacier. We work our way up to the bergschrund, to the moat, where the glacier has melted away from the cliff. And this is known by many that have done the North Face as one of the most challenging parts of it. When we got there, that gap between the glacier and the rock was, what? Two and a half-ish feet wide, maybe, you think? And at least 40 feet deep.
Dr. Christian Feinauer:
Yeah, that sounds about right. Big, deep bergschrund, but we were pretty close to the rock.
Dr. Jim Dahle:
We took off our mountaineering boots, we took off our crampons, took off our ice axes, and put on our rock shoes and our climbing gear and roped up at this point. And I think I had the climbing gear on my harness, so I took the first lead and stepped across this bergschrund, this moat, started climbing on the rock, started putting gear in and worked my way up around a little bit of remaining snow and ice up to a belay spot, and then brought you up at that point. And then it was your turn for your first lead. What were your thoughts going up for your first lead on the route?
Dr. Christian Feinauer:
Well, like I said, from the research I did, there wasn’t a lot of detail about where you’re supposed to go. We knew it was supposed to be about 5.7, maybe 5.8. It’s supposed to be kind of trending slightly left, but kind of going up through all this loose stuff. I came across some moves that seemed pretty challenging, so I ended up kind of moving left because I was like, that’s harder than 5.7, or 5.8, if I go this direction. So, it definitely wasn’t straightforward climbing, but as long as I kept kind of looking for the areas of weakness, there was nothing that was super difficult from a rock climbing standpoint.
At one point, I came up to some rock that had a bunch of sling on it, looked like it might be a belay spot, but I didn’t feel like I’d gone far enough to really stop there. At that point, I sort of went left around this corner into a kind of more open, chossy gully. And because I’d gone around this corner, I started to get some rope drag at that point. I was trying to go higher, the climbing wasn’t hard, but I had a lot of rope drag. After actually going up and trying to find a place to make my belay, my anchor, I ended up coming back down about 20 feet to this ledge off to the side that has the only decent rock around there that I felt would hold a good anchor.
Dr. Jim Dahle:
And in retrospect, it’s good you went to that spot, because it turned out that anchor was very important. All right, we’re starting up the third pitch at this point, and it’s my turn to lead. And I’ll talk about what I remember. I placed about four pieces of gear. The last one, maybe not so great, because I was getting into some loose rock.
And then I remember at one point, thinking all four of my holds are loose. Both of my handholds and both of my footholds are loose. This is not good. But I looked up and saw that it got a lot easier in about six feet. If I could get to that point, then I thought I’d be home free for the rest of this pitch. And that’s my last memory for quite some time. So, I’m going to let you take over the story at that point with what you saw next, Christian.
Dr. Christian Feinauer:
Okay. Yeah, you were leading. You were on the sharp end, as we say, because that’s where all the risk is. And you were going up this shallow, I’ll say dihedral, which means where rock makes an angle into sort of a corner. And the bottom section was pretty easy, but you had gotten up where it was steeper and very loose. I remember you calling down saying, “This is loose, watch me.” And I even remember you kicking off little pieces of rock from your footholds. And so, I was watching pretty closely, and I could see above you, there was sort of almost a little ledge where it got a lot easier. And you were making a move up for there. I remember you reached your hand out right kind of to get to that ledge. And whatever you put your hand on just broke right off, some loose piece of rock, and you fell.
That’s the point where you fell off to your right side. And I was watching you and holding the rope. And you fell, and it seems like you hit or glanced off of sort of a small ledge below you, but then you just kept falling. And I would estimate it was about 30 feet or so. And you were kind of falling headfirst, because you had fallen off towards your right and that handhold had broken loose. And it was pretty obvious to me that you must have pulled a piece or you wouldn’t have fallen so far. I think that last piece you had placed in the rock just came right out.
And so, I just heard a thud as you hit the rock. And I call over to you, and all I’m hearing is this loud breathing. And I’m calling your name, and you weren’t answering at all. And my first thought was just like, “Wow, this isn’t just a fall, but he’s really hurt.” This has turned into something else.
This is where the memory is a little fuzzy. I don’t know how long everything took, because time kind of stands still when you’re in a situation that’s kind of this scary. I could hear you breathing, so I knew you were alive, but you weren’t responding to me at all. You were just hanging on the rope, kind of mostly upside down at a bit of an angle. And when I kind of looked around the corner, I could see all this blood dripping off your face and a bunch of water, which at first took me a minute to realize, I think you broke your water bladder that was on your back in your backpack when you fell. So, all that water was just pouring over your shoulders, onto your head, dripping down onto the rock.
After a minute or two when I realized you were not responsive and you weren’t going to be able to rescue yourself, I figured I had to get up there. Thankfully, you weren’t putting a lot of force on the rope, because the area you landed was sort of low angle. So, you were putting some weight on the rope, but a lot of your weight was on the rock. I was able to tie off the rope and attach it to the anchor. The rope that went from you up through the last piece you placed and down to my belay device, I tied that to our anchor, so you were secure. And then I was able to what we call escape the belay, meaning get the rope out of my belay device.
Now, sometimes that can be really challenging if all of the weight of the climber is on the rope, but thankfully that wasn’t the case. At this point, I had completely gotten off of my anchor, off of the rope, and I was basically free soloing because I could tell that the terrain coming right off of the ledge where I was belaying from was pretty easy. I’d say it was less than fifth class.
I scrambled up these broken ledges up to where you were, and you were still not responding, breathing really heavily. And you were kind of mostly upside down, pressed up against the rock, kind of an awkward position. I actually did attach a sling that I had into one of the pieces you had placed in the rock, which just happened to be close to where you were hanging.
I was secured into the rock while I tried to sort of manipulate your body to get you upright. I was really trying to hold your neck and your head, since I don’t know if you have a cervical spine injury or exactly what the extent of your injuries are. And then trying to just maneuver you so your legs would sort of fall downward, trying to get gravity to sort of let you fall into a more upright position. And thankfully, that was the case.
And so I got you kind of upright, leaning against the rock, and I started just looking to see, like, your breathing’s good. I don’t see any obvious deformities in your extremities. I still kept calling your name, and then you started to just wake up. I was like, “Thank goodness he’s at least waking up.”
But you had no idea what was going on. Your first few words were just like, “What’s happening? Where are we? “ And I’d say, “We’re on the Grand Teton.” And you just said, “Why are we here?”
Dr. Jim Dahle:
Which was a great question. At that point, a fantastic question. Most intelligent thing I could have possibly said at that point.
Dr. Christian Feinauer:
Yeah, I think you were unconscious for at least 10 minutes, would be my estimation. You still had all this blood running off of your forehead. Your helmet wasn’t broken, so I guess it did what it was supposed to do. But unfortunately, I think you landed mostly on your face rather than on your helmet.
And so, after a few minutes, when you were awake, I was asking you what hurt. You said your left wrist hurt. It was all taped up and stuff, so I couldn’t really examine it very closely. But I thought that wasn’t very important at the moment. Your breathing seemed fine. You said your legs were not hurting you, so you could kind of stand on a little ledge there.
At that point, I decided that I should probably go back to the belay and try to lower you to the belay so we’ve got you on a nice, big, stable platform and get you clipped into the belay ledge. And so, that’s what I did. I free soloed back to my belay ledge and clipped myself back into the anchor. I put you back on belay, and then I coaxed you down to the ledge, which was actually pretty challenging.
Because if I told you something, a few seconds later you didn’t remember what I told you. I would have to say, “Jim, lean back on the rope. I’m going to lower you down to this ledge.” And you’d take a step, and then you’d look around, and you’d say, “Where are we? What are we doing here?” And I’d have to reiterate, we’re on the north face of Grand Teton. I need to get you to this ledge. Lean back. And slowly, you came down and got to the ledge and walked over, and I clipped you in with a few pieces to the anchor.
The one thing I remember you kept saying was, “Is this a dream?” You kept asking, “Is this a dream? Is this real? Did this really happen? This just feels like a dream.” And as soon as I got us both clipped into the anchor on that belay ledge, it seemed pretty stable. I could see you were breathing. You were awake, but obviously very concussed, had a pretty significant head injury. I thought, “Well, I don’t think we’re going to be able to rappel off of this and self-extricate at this point, so I’ve got to call for help.”
You mentioned you had an InReach, and I know you’ve had that on a lot of our trips, but I’ve never really used it. I know you had sent some text messages. I didn’t know where it was, in your pack somewhere. For some reason, I had been reading about some self-rescue devices, and some of them I thought used a Bluetooth that went to your phone as an interface, so I thought maybe I should use your phone in case it’s somehow connected to the InReach. But I just used your phone to call 911, and lo and behold, it went right through.
Andrew:
Hello. Dispatch, this is Andrew.
Dr. Christian Feinauer:
Hey, this is Christian. I’m on the north face of the Grand Teton with my friend Jim, and he just took a leader fall, hit his head, was unconscious for about 10 minutes or so. He’s awake now, but very head injured, perseverating. I think we’re going to need a rescue.
Andrew:
Okay.
Dr. Christian Feinauer:
We’re only three pitches up the north face. Yeah, he’s bleeding from his face, and his left wrist hurts, but he doesn’t know where he is or what we’re doing up here.
Andrew:
All right, got it. I can get you on with the search and rescue, one of our search and rescue folks right now. Just one second.
Search and Rescue Operator:
Hello?
Dr. Christian Feinauer:
Hi, this is Christian.
Search and Rescue Operator:
Are you at the scene of the incident?
Dr. Christian Feinauer:
Yes, I am.
Search and Rescue Operator:
Okay, can you tell me what’s going on and where you are?
Dr. Christian Feinauer:
We’re on the north face of the Grand Teton.
Search and Rescue Operator:
Okay.
Dr. Christian Feinauer:
And we’re only about two to three pitches up. We crossed the glacier, and we were going up, and my friend Jim was leading and some rock broke. He took a big fall.
Search and Rescue Operator:
Okay.
Dr. Christian Feinauer:
And so he’s very head injured. He was unconscious for about 10 minutes. Now he’s awake. He’s bleeding from his face. He’s perseverating and doesn’t really remember how we got up here. His left wrist hurts. He’s able to walk. I was able to lower him down to the last ledge that we were belaying from.
Search and Rescue Operator:
Okay.
Dr. Christian Feinauer:
I’m going to have to talk with him if I can lower him back to the glacier or if he’s even capable of that.
Search and Rescue Operator:
Okay. What’s the name of the injured party and how old is he?
Dr. Christian Feinauer:
Jim or James Dahle. D as in dog, A-H-L-E.
Search and Rescue Operator:
Okay. And how old is he?
Dr. Christian Feinauer:
He’s 49.
Search and Rescue Operator:
Okay. And roughly how much does he weigh?
Dr. Christian Feinauer:
210.
Search and Rescue Operator:
210 pounds. And what do you have for gear with you? Do you have a puffy, shell gear, etc?
Dr. Christian Feinauer:
I think we’ve got a backpack full of stuff.
Search and Rescue Operator:
Okay. All right. So, you’re in pretty good shape in terms of your supplies and stuff, correct?
Dr. Christian Feinauer:
Yeah. We have some food and water and some warm gear.
Search and Rescue Operator:
Okay. And how many people are in your party right now?
Dr. Christian Feinauer:
Just two.
Search and Rescue Operator:
Just you and James?
Dr. Christian Feinauer:
Yes.
Search and Rescue Operator:
Okay. What’s going to happen now is we’re going to be mobilizing a rescue for you. There’s going to be a helicopter that’s going to be in the air and they’re going to do a reconnaissance of the site where you are and then come up with a rescue plan for getting you extracted from where you are. I just want to get an idea of what you’re wearing for clothing. What do you have on for clothing and what color is it?
Dr. Christian Feinauer:
I’ve got a blue fleece and brown pants. He’s got an orange shirt and dark gray pants.
Search and Rescue Operator:
Okay. Now, you’re two to three pitches up on the north face, but have you got to any of the ledges yet at all?
Dr. Christian Feinauer:
Yeah. We’re well below the first ledge.
Search and Rescue Operator:
You’re below the first ledge. Okay. All right. Good. We’re going to put a full effort into the rescue right now. I’m going to be hanging up with you. And Christian, if you have anything else, you can call us back, and I may be calling you.
Dr. Christian Feinauer:
Okay. Thank you.
Search and Rescue Operator:
Okay. You’re welcome. We’ll see you shortly.
Dr. Christian Feinauer:
And so, I don’t know who I talked to at first, but they transferred me to somebody at the national park and then they transferred me to the actual search and rescue folks who were going to do the rescue.
Dr. Jim Dahle:
The Jenny Lake Rangers.
Dr. Christian Feinauer:
Yeah. The Rangers.
Mik Shane:
My name is Mik Shane and I do a bunch of seasonal work in the national parks. And I got a job working as a Jenny Lake Ranger for Grand Teton National Park about eight years ago.
Dr. Jim Dahle:
Now let’s go back to that morning of August 21st, when this call came in. What were you doing when you first heard that we were having a problem on the North Face? And what were your initial thoughts?
Mik Shane:
There was about maybe seven or eight of us, if I remember, a kind of a mix of seasonal and permanent Ranger staff at the rescue cache in Lupine Meadows. And our plan for the day was to do a helicopter-based training, a short haul training, which was very lucky, as it turned out, that all those resources were there waiting when this call came in.
Dr. Jim Dahle:
You’re literally already at the helicopter, standing around the helicopter, ready to do some training with the helicopter.
Mik Shane:
Yeah. It’s funny how that happens. There’s been a few of those examples this summer, very similar. So, it’s ironic how sometimes that happens, but we do a lot of trainings. I’m very thankful for our program to be able to set aside resources and time to stay up on these skills.
One of the duties that most of us have is being a SAR, search and rescue, coordinator for the day, which is a 24-hour shift. And you’re basically the person who takes a call and organizes a rescue. If you’ve done any work within that field of rescue, you call it the incident commander, the IC.
A guy by the name of John Paulitis was training to be a SAR coordinator. And so, he and I were put together. I’ve been taking that role for three or four seasons now. And John’s been around for 30 plus years, more as a paramedic in the park, but he’s joined our group and he’s one of us these days.
He was training and I was overseeing. And the phone rang at the rescue cache and we saw John disappear. It was probably his third or fourth day shadowing someone who’s SAR coordinated for a few years. And when that happened, he disappeared into a room, but there’s windows and we are all watching to see, “Is this something about to happen?”
And somebody walked in and took a look over his shoulder and saw that he had scribbled down, north face of The Grand. And if I’m remembering right, I think what caught his eye was unconscious, 10 minutes, possible head injury. Some of this stuff was just scribbled on a little piece of paper. That guy came out and announced to everyone that we had something going on and that we were going to divert from our training.
Ken Kries:
My name is Ken Kries. I am a Jenny Lake climbing ranger in Grand Teton National Park. That route is famous in North American climbing and mountaineering and certainly in the Tetons and is an early historic north face route that has always held a certain aura and mystique. It’s big, it’s steep, it’s potentially dangerous.
And then our team has had a couple missions on the north face over the years. Most famously, I want to say 1967, but don’t quote me on that, a mission that took two or three days to get a climber lowered down the face, they were pretty high up. Everybody, when we heard the call for a rescue on the north face of the Grand Teton, everybody’s ears perked up and everybody paused and was like, “Oh, it’s game time.”
Dr. Jim Dahle:
As much as I hate to leave you on a cliffhanger, the amount of material we have for this episode is just too long for a single episode, so we split it into two. And the other half will be coming up in a week. And if you like this part of the episode so far, you’re going to love what comes up in a week. We’re going to be talking about the rescue, recovery, as well as interviews with some very important people in my life, including my wife, Katie, including WCI staff. And so, make sure you tune in next week to hear the rest of this story.
At this point, as you know, I’m unconscious, basically, well, not unconscious, but asking the same question over and over again, sitting on a ledge, hoping… Well, Christian was hoping anyway, that the cavalry was coming for me. And indeed they did come. And it’s a pretty awesome story. So, tune in next week to hear about that.
SPONSOR
In the meantime, thank you for supporting our sponsors. Our sponsor for this episode is SoFi.
As I mentioned at the top of the podcast, SoFi is helping medical professionals like us bank, borrow and invest to achieve financial wellness. Whether you’re a resident or close to retirement, SoFi offers medical professionals exclusive rates and services to help you get your money right. Visit their dedicated page to see all that SoFi has to offer at whitecoatinvestor.com/sofi.
Loans are originated by SoFi Bank, N.A. NMLS 696891. Advisory services by SoFi Wealth LLC. The brokerage product is offered by SoFi Securities LLC, member FINRA/SIPC. Investing comes with risk, including risk of loss. Additional terms and conditions may apply.
Don’t forget about this real estate webinar. It’s coming up on the 12th of November. That’s before you hear the rest of this episode. It’s at 06:00 P.M. Sign up, whitecoatinvestor.com/realestatewebinar. I’m going to be talking about how to boost returns, lower your taxes, build your wealth. It’s at 06:00 P.M. Mountain Time, but if you can’t make it, we’ll record it. We’ll send it to you. Just sign up so we know to send it to you. We’re not going to send it to everybody.
Thank you for those of you leaving us a five-star review and telling your friends about the podcast. That really helps a great deal. A recent one came in that said, “Strong recovery”, five stars. “Dr. Dahle, know that I, we are hoping for a speedy, strong recovery for you. The whole White Coat Investor platform has changed so many lives for the better. We’re grateful for you and your team. Be well and stay encouraged.”
Well, thank you very much for that. I actually didn’t see this until we were recording this episode a couple of months later, but we do appreciate your kind words, as well as all of the emails I’ve received in the last couple of months, which is many, many emails wishing me a rapid recovery. Thank you so much for all of those, and thank you for the five-star reviews.
In particular, when you hear an episode that you think can help somebody, please, please, please send that to them. Not only does it help us spread the WCI message, but you’re helping your friend. We are answering questions that lots of you have in these episodes, and if you know somebody with these questions or these concerns, just send them a link to that episode. It’s a great way to share what you’re learning and all this good stuff with people that can really benefit.
All right, we’ll see you next week, where you get to hear the rest of the story. Until then, keep your head up, shoulders back. You’ve got this. We can help. See you next time on the White Coat Investor podcast.
DISCLAIMER
The hosts of the White Coat Investor 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.
Milestones to Millionaire Transcript
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 195 – Radiologist goes part-time.
One of the most underrated financial moves in medicine is working locum tenants. It pays significantly more on average and you can work locums full-time or on the side of your full-time. When you work with CompHealth, the number one staffing agency, they cover your housing and travel costs, which on top of higher pay really adds up.
Locums also gives you more control of your career, allowing you to go where you want, when you want, with a schedule that works for you. It’s the perfect way to get ahead financially while getting focused on what you love. Whether it’s locum tenants or a regular permanent position, build your career your way with the power of CompHealth. Learn more at comphealth.com.
All right, welcome back to the Milestones podcast. We’ve got some great stuff for you today. Before we get there though, I want to make sure everybody who listens to this podcast knows about our resources at whitecoatinvestor.com. We have what we call our recommended list. And you can go to whitecoatinvestor.com/recommended and see resources. And there are resources there, or you can just go to the recommended tab at whitecoatinvestor.com.
We have all kinds of people we have found that we consider the good guys in the financial services industry that can help you with whatever your needs might be. We got companies there that do student loan refinancing, insurance agents, physician mortgage lenders, conventional mortgage lenders, real estate investments, financial advisors, surveys you can take for extra cash, student loan advice, contract review services, tax preparation and strategizing services, retirement accounts and HSAs.
For example, if you need a self-directed 401(k) or you need a customized solo 401(k) or whatever, you can get that there. Legal services, real estate agents, credit cards, a retirement calculator, even burnout coaching. We’ve got all that available to you at our recommended tab or at whitecoatinvestor.com/recommended.
So when you need some help with something, when you need a professional, please start your search there. These are people that have supported the mission of the White Coat Investor often for many years and that we have experienced with. And if we have problems with these folks, we take them off the list. If we get a bunch of complaints from White Coat Investors, they’re not still on our list. And so, they are vetted as much as we can by us and continually by White Coat Investors.
Now, obviously there’s no guarantees with any of these people. They are paying us to advertise, but we think these are some of the greatest people out there when it comes to actually using any sort of financial services. So check those out.
Okay, we are going to do a great interview today. This is pretty awesome, what you’re going to hear from this doc. But stick around afterward. We’re going to talk for a few minutes about one of the biggest debates out there in investing, which is real estate versus stocks. So let’s get into the interview now.
INTERVIEW
Our guest today on the Milestones to Millionaire podcast is William. William, welcome to the podcast.
William:
Good to be here, Jim, thank you.
Dr. Jim Dahle:
Tell us what you do for a living and how far you are out of training.
William:
I am a radiologist and I am about 22 years out of training.
Dr. Jim Dahle:
22 years out of training. And what milestone are we celebrating with you today?
William:
Being able to cut back at work and go part-time.
Dr. Jim Dahle:
Awesome. That is a fun milestone. I don’t know that I’ve ever included that in any of the lists of milestones I’ve made, but it is certainly a big one in the lives of many physicians. And I don’t think we’ve featured it yet in 100, and what have we done? I think we’re on episode 195 of this podcast. I don’t think we’ve ever had anybody that reached this milestone come on the podcast yet. So let’s talk about this a little bit.
First of all, why don’t we start kind of at the beginning as you were coming out of training 22 years ago? What did finances mean to you back then? How financially literate were you? How big of a hole were you in? Where did this all kind of start back then?
William:
Well, I was very fortunate to not have to borrow money to go through school, so that was a huge help. I guess I really have my grandfather to thank for that. He paid for my father’s education, and my father tells me that when he went to pay my grandfather back, he told him, he said, “Well, the best way you can pay me back is to make sure your kids get all the education they want.” I benefited greatly from that.
I would say that I was reasonably financially literate. I started paying attention to it when I was in residency and trying to educate myself about just basic investing approaches. And my father had been a pretty good influence too. He invested along the way and really took care of his finances and certainly had a positive impact. Yeah, I started putting in a little bit into retirement accounts and things during my residency and then really started amping up the savings when I got into private practice.
Dr. Jim Dahle:
Very cool. And is there a family involved? Are you married? Any kids?
William:
Yeah, I’m married. We just celebrated our 20th anniversary, so that was nice. And we have three kids.
Dr. Jim Dahle:
Okay, so you were an attending when you got married. Okay, what did you do? You’re going part-time. That is not insignificant. Many doctors, even 25, 30 years out of their training are not able to go part-time. What have you done with your life that has enabled you to do this?
William:
Probably the biggest thing we’ve done is just we’ve consistently saved and invested ever since we started working. I think we’ve tried to be careful with spending. I think we certainly have not lived the life that I would describe as frugal, but we’ve always tried to be careful about our spending. And we’ve just done the low-cost investing approach or low-cost index investing approach and pretty much always managed it ourselves. And it’s just kind of grown over the years. We’re kind of at a point now where we can kind of do what we want financially.
Dr. Jim Dahle:
So, what is the range of your household income been over the last 22 years?
William:
The range has probably been from $250,000 to $600,000 and probably an average of about $450,000 or $500,000, I would say.
Dr. Jim Dahle:
Okay, and how much of that do you think you saved each year?
William:
Well, early on before we had kids, we had a really high rate of savings. I don’t know what the percentage would be, but I would say we were probably saving 50%, 60% of our income. And then once kids came along, that probably dropped down to, I’m going to say probably 20% or 30%. And now that I’m part-time and the kids are a little bit older and we have a little more on the expense side, we’re really not saving anything now, but we’re not really pulling from our investments either. We’re kind of treading water and just kind of letting the investments do what they do.
Dr. Jim Dahle:
And what’s your approximate net worth today?
William:
It’s around $11 million.
Dr. Jim Dahle:
$11 million is quite a sum of money. And was there some addition to this other than your earnings and saving and investing? Was there a huge inheritance at some place along the way? Did you win the lottery? Is there anything else here but what you guys earned and saved?
William:
No, no. We had a business sale a few years ago that probably added in the ballpark of probably about $2 million. But yeah, the rest was just savings and earnings.
Dr. Jim Dahle:
Okay. Well, $11 million would make most physicians financially independent. Do you consider yourself financially independent today?
William:
I do. I guess there’s always a part of you that just sort of fears the unknown, but I do feel reasonably confident that we are financially independent.
Dr. Jim Dahle:
Okay, you’re basically working because you enjoy it at this point. You enjoy some aspect of your work. Tell us about that, what you still enjoy after 22 years and why it was important to you to keep working.
William:
Yeah, well, interestingly, that was not the intent. I was thinking that I probably would stop working altogether, at least in the medical field, but I wanted to ease into it. So that’s why I went part-time. And I found that working a part-time schedule, I began to enjoy it probably more than I ever had. When you’ve got plenty of time to do sort of the other things in your life and also stay plugged in at work and plenty of time to do your CMEs and things like that, yes, it’s really much more enjoyable.
Dr. Jim Dahle:
I certainly found that myself. I love part-time medicine. I preach the gospel of part-time medicine to everybody I can because it really does allow you to eliminate a lot of what you don’t like about work and yet retain a lot of what you do like about work. And so, I think it’s awesome when doctors are able to do that. Tell us about the conversation with your employer or your group when you came to them and said, “You know what? I don’t want to be full-time.”
William:
It went really well. The group still needed the help and they were willing to basically take whatever help I could give them and it was at significantly reduced rate of income, but it was still what I felt like was fair and it eliminated sort of the off hours, overnights, weekends, things that can make it difficult. I felt like from my standpoint, it was really good.
Dr. Jim Dahle:
Yeah, it sounds like a win-win. Good for them, good for you. They get cheaper labor really than what they likely pay a lot of the other people working evenings and nights, et cetera. And you get to create your own schedule and enjoy your own life. So I think a lot of times that works out very well for people going part-time.
William:
Yeah, it’s certainly worked out well for me and I hope they would say the same.
Dr. Jim Dahle:
Yeah. Now it’s interesting to think about accumulating that much money on just primarily just on a physician income. I think people are going, “Wow, how’d that happen? How’d they save so much?” Tell us a little bit about your spending. Are you in a low cost of living area? Did your kids go to private school? What did your vacations look like along the way? Tell us a little bit more about how you’ve lived your life financially over the last couple of decades.
William:
Yeah, we are in a low cost of living area in the Southeast. Low tax area. And like I said, cost of living is certainly manageable. Like I said, I don’t feel like we have lived a frugal lifestyle by any means. We take several vacations a year, but we don’t go and we haven’t been to Europe. We don’t stay at the Five Seasons. Actually we did a fair amount of camping along the way. That was something we did when the kids were small. And then they got old enough where they kind of had enough of that. So we’re not doing much camping anymore.
But yeah, I feel like our expense structure is probably in the range of about $200,000 a year, which to even say that that’s somewhat frugal is really, it almost sounds sort of silly, but it works for us, even though I’m sure we could cut back. We have plenty of room to cut back if we needed to. I feel like we’re just kind of living pretty comfortably.
Dr. Jim Dahle:
Yeah, certainly I don’t think anybody can argue that you can’t afford to do that. 4% of withdrawal rate would suggest somebody with $10 million could spend about $400,000 a year and expect their money to last a very long time. And so, obviously you’re still living really below your means and still earning money along the way. What role has debt played in your life?
William:
Debt is, I guess I would say the role it has played by design has been absolutely no role at all. We’re kind of in Dave Ramsey country here and I started listening to him years ago and really just took an aggressive stance toward avoiding debt. Well, I’ll say absolutely no role. That’s not entirely true, thinking through this as we’re talking. I did borrow money to buy our first house and we paid that off as quickly as we could. And then we had to borrow a little bit for our second house and also paid that off. We’ve never had a car loan or any what you would call consumer debt. And then I mentioned about being very fortunate to not have to borrow a lot of money to complete school. So, that was a huge headstart for us without a doubt. But other than that, we just have tried to avoid debt at all costs.
Dr. Jim Dahle:
Is giving an important part of your life? And if so, how do you do it?
William:
Yeah, it’s interesting you ask that. If somebody were to ask me just what my financial advice would be for them, for anybody, I think that I would list that as make that your number one priority. That’s what my wife and I did years ago. It really has served us well in a lot of different ways. And what was interesting was it felt like early on especially when you’re trying to save and trying to get ahead and people come and say, “Well, can you give to this cause or that cause or whatever?” And I found that there were lots of hands coming from all directions that were wanting contributions for different things. And I wanted to be a giver, but it started to sort of wear us down.
What we did was we said, “Okay, here is the percentage that we’re going to give. We’re going to give a certain amount to our church and we’re going to set aside a certain amount in addition to that to give to community causes, friends in need, family in need, whatever comes along.” The money is going to be sitting there and it’s not our money at that point. And it really makes it very easy to give.
So, basically we’ve set up two separate accounts one for our tithing and one for our giving. And it’s worked really, really well for us. I think that probably the biggest benefit that we have received from that is just understanding that when you prioritize or when we prioritize giving, it really changed the way we viewed money. I think it just kind of helped us live financially differently than we otherwise would have.
The analogy or the phrase I’ve heard used previously is that it sort of transitions you from living with a closed fist to living with an open palm. And like I said, it just really has been a big part of our financial plan. And probably the one thing that I would say has served us the best over the course of our investing career.
Dr. Jim Dahle:
Other than learning how to give well, what advice would you give to a resident or a young attending that wants to do what you did? Who wants to be financially free in their early 50s, maybe wants to be a decamillionaire, whatever. What advice would you give to someone that wants to accomplish what you’ve accomplished?
Like I said, the first thing I would recommend is to prioritize giving. I can’t overstate that. It just has been great for us. The other things I would encourage them to do is to make sure that you’re investing in things that are much more important than money. Invest in your marriage, invest in your kids, invest in your family, your community, because obviously those are the things that bring the most enjoyment from life.
But there’s also a very real and tangible financial payoff for doing those sort of things. If you protect and really nourish your marriage, then that can save you a lot of money down the line in addition to the happiness that it brings. And I would say the same thing about investing in yourself. Make sure that you’re staying healthy. You don’t have to be crazy about it, but making sure you’re eating a reasonable diet, exercising a few times a week, investing time in CME, you’re doing some reading, staying out of the 24/7 news cycle. Just really self-care, I think, is a big important part of it.
And then as far as the investing side of it is concerned, I heard you mention this not too long ago, and I really liked the way you phrased it. You talked about the most valuable hobby that you can cultivate is learning to manage your investments yourself. And so, we did that early on, and I’ve never added it up, but I think that saved us a tremendous amount of money over the years. 1% annually really starts to add up when your portfolio starts to grow to a certain size.
And so, I would certainly give that advice to somebody to really educate yourself and be prepared to do some basic management. I talk about all those things. I guess the word that I keep coming back to when I think about all these things, and you’re trying to figure out what’s prioritized and how much to put in here, in this area, in that area. I guess the biggest thing when you put it all together is just trying to find the right balance in pretty much everything that you do, not letting anything get too far out of whack with your priority list.
Dr. Jim Dahle:
Now, for somebody else that wanted to go part-time, do you feel like you could have done that earlier in your career? And do you wish you had, given the financial success that you have seen?
William:
Yeah, I definitely could have gone part-time earlier. I haven’t really thought that through, but I don’t know that I would have benefited tremendously from that. I certainly think that there’s an element of being healthy for your kids to see you working full-time and being committed to a job and a career, as long as it doesn’t consume all of your time that you would otherwise want to spend with your family.
And they’re old enough now where we are cutting back because we have been careful with our finances. So, hopefully there’s a healthy lesson there, too. But yeah, without a doubt, if we really wanted to cut back on our spending along the way, we could have easily worked part-time earlier.
Dr. Jim Dahle:
Well, William, congratulations to you on your success. And thank you so much for being willing to come on the Milestones podcast to share it with others and inspire them to do the same.
William:
Okay, thank you for having me.
Dr. Jim Dahle:
All right. We could have done a lot of milestones there. We could have done financial independence. We could have done decamillionaire. I thought it was interesting that William chose to highlight the fact that he could go part-time. Now, obviously he could go zero time now, and I think he recognizes that.
But part-time is such a big deal in medicine and I’m a huge fan of it. I didn’t think I’d be a huge fan of it. I was kind of forced into part-time work. WCI just took too much time. And I’m like, “I am not working two full-time jobs. I’d like too much other stuff in my life to do that.” And so, I had to hire help at WCI and I had to cut back on my clinical work. I was kind of forced out of it.
But as I dropped nights, which I knew I was going to like that, but as I cut back on shifts, I didn’t realize how much more I was going to love practicing medicine. And I think a lot of docs find this when they cut back on their work. When I do surveys of doctors and ask them, “What would you do if I wrote you a $10 million check?” about 33% would not come into work tomorrow. They’re like, “I’m done.” But 55% of doctors would just cut back in some way.
I think there’s a huge desire among doctors to go part-time. And I think there’s a good reason for that because we truly do love what we do. We just want to do some other stuff with our life as well sometimes. And so, the first thing I tell a burned out doc, of course, is “Why don’t you cut back to full-time?” But if that doesn’t work, try cutting back a little bit more than that. You might be surprised just how many options there are to do part-time medicine, as well as how much you enjoy it.
Certainly toward the end of your career, give it a try. It might extend your career significantly, which has lots of financial benefits, but also you can keep making a contribution, and an important contribution, because your work is important to the field and to patients, et cetera.
Thanks for what you do, by the way. Given my recent experiences, I’m far more grateful than I was even before for all the work that you folks do out there. It’s wonderful.
FINANCE 101: REAL ESTATE VS. STOCKS
Okay, I promised you we were going to talk about real estate versus stocks. It’s a strange thing I see out there. Real estate investors love to denigrate stock investors. They’re like, “They’re speculators. They buy paper assets that are subject to market crashes, and the markets get manipulated.”
And then the stock investors are always poo-pooing on the real estate investors, saying “They’re just people who want a second job, or they’re trying to get rich quick, and scheming to do it, or people who can’t actually calculate a return.”
And the truth is, with most stereotypes, there’s a little truth in there, but it’s mostly not true. Both types of investments have their pluses and minuses. You can do either one of them poorly, but if they’re done well, they’re both likely to lead to wealth. I’ve found myself on both sides of this argument at times. I found myself defending real estate investing. I’ve found myself defending stock investing. That’s usually a good sign that you’re in the right place, and you’re having to defend yourself from both extremes.
But let’s talk today about a little bit of the advantages of real estate, and the advantages of investing in stocks. One of the things to talk about is generating profit from business ownership. And this is a problem real estate investors have. They forget what a stock is. A stock is not some speculative asset. This is not Bitcoin. It’s not gold. It’s not empty land. It’s not Beanie Babies.
When you own stock, you own a company, a business, probably a profitable business, one of the most profitable businesses in the history of the world. When that business makes money, you make money. It’s a wonderful thing. Sometimes that money is paid to you as a dividend. Sometimes it’s just earnings that are reinvested by the company, and it goes up in price. And so, I think it’s important to recognize that. And too many real estate fans forget about that part of what stocks are.
Real estate, when it’s run well, is also a profitable business. It has a fundamental return that’s derived primarily from rents. If you can increase the rents, it makes the property more valuable. And so, that’s what you’re doing, whether it’s stocks or whether it’s real estate. You are owning businesses that make money, and that’s a good thing for you.
Passive income is this catchphrase out there. Everybody wants some passive income. And the funny thing is that people that want passive income sometimes go running toward real estate. And it’s true that more of the return in real estate comes from income than it does from capital gains.
But the truth is that the income from stocks is actually way more passive than the income from real estate. It just takes more to invest in real estate to do well. Barring an investment that’s solely in publicly traded REITs, like the Vanguard Real Estate Index Fund, it’s just going to take more work. You got to do more vetting. You may have to do significant management of the property, et cetera. But that’s the way it is. It’s more passive when you’re getting it from stocks or bonds or mutual funds, REITs, et cetera, than it is from most ways in which you invest in real estate. But you can get more income from a real estate investment if income is really something you want.
Now, you better ask yourself whether that’s something you really want because more income is not necessarily a good thing, especially during your peak earnings years. Sometimes it would be better to have your investments grow without actually generating taxable income.
Okay, speaking of income investing, it can be a trap. People fall into this. Dividend stock investors are the classic example. Real estate investors are sometimes even worse with this. Focusing too much on income is not good, especially when you don’t need the income. What you need to focus on is the total return of the investment.
The nice thing about both stocks and real estate is some of the return comes from appreciation, the value of the investment going up, and some of it comes from income on both sides. So, just don’t get too focused on income. When you focus too much on income, you start making mistakes.
A classic example is junk bonds. These are bonds where the company is more likely to default, go bankrupt, et cetera, than a typical company. And so, it has to pay a higher yield, a higher income on its bonds. So you might go, “Oh, instead of earning 4%, I can earn 6%.” Well, yeah, but your return might not be any higher because the default rate is higher. And so, you actually lose more principal even if you’re getting more income. And that’s the way a lot of income-focused investments can be, so don’t fall into that trap. Always look at the total return, even if income is a good thing in your view.
Okay, tax advantages. Now, there are lots of tax advantages for investors. Uncle Sam definitely wants you to invest. Oftentimes, you’re investing inside tax-protected accounts, 401(k)s, backdoor Roth IRAs, HSAs, 529s, ABLE accounts, whatever. These are all great ways to invest.
It’s way easier to invest in stocks inside these tax-protected accounts than it is real estate. Almost every one of them will at least offer an S&P 500 index fund. Low cost, basically free. You get not quite the largest stocks, but 500 large stocks in the US. If you can get a good total stock market fund, total international stock market fund, you can buy all the stocks in the world in 30 seconds and forget about it, and it’s a very tax advantage because it’s inside one of these tax-protected accounts.
But even when you’re investing in a taxable account, stocks benefit from a few things. They benefit from a lower qualified dividend rate. They benefit from a lower long-term capital gain rate. They benefit from a step-up in basis of debt.
On the other side, real estate also has some advantages, all those same advantages other than the qualified dividends. When you’re getting rents from real estate, those are taxed at ordinary income. But it has two really cool tax advantages. The biggest one is depreciation. You depreciate the building, not the land, but that can shield this income that’s normally taxed at ordinary income tax rates such that you don’t have to pay any tax on it. So many real estate investors are getting significant income from their properties and paying no taxes on it because it’s all sheltered by depreciation. And when that depreciation gets recaptured at sale, it’s only recaptured at up to 25%.
So, there’s a tax arbitrage there, kind of like when you contribute to a tax-deferred account at your peak earnings rate, and then you pull the money out later in retirement when you’re at a lower tax rate. There’s an arbitrage there when you recapture depreciation. But you don’t actually have to recapture the depreciation. You can hold that property until you’re dead and then get the same step up in basis that a stock investor would.
Even better, you can exchange it for another property, usually a bigger property or more expensive property, and not recapture that depreciation you’ve already taken, but then get some more value that you can then continue to depreciate. So, it’s a very, very tax-efficient way to invest, to depreciate, depreciate, depreciate, exchange, depreciate, depreciate, depreciate, exchange, depreciate, depreciate, depreciate, die. Super tax-efficient, a very cool benefit of real estate investing.
Okay, leverage. You can leverage these investments. It’s a little bit easier to leverage real estate most of the time, just because people expect you to buy real estate with debt, and the loans are often fixed and pretty long-term. Whereas when you use a lot of leverage with stocks, you can borrow against your real estate to invest in stocks. You can do that, but what a lot of people do is they use a margin account. And the problem with a margin account is you can only borrow so much, usually up to about 50% of its value. Now, obviously you can borrow more against real estate if you want, but there are margin calls, and those can be bad if you don’t have the cash to meet them.
One big advantage of stocks over real estate is liquidity. Stocks, hopefully, you’re investing in them via low-cost, broadly diversified index funds. They’re totally liquid. You can buy more any day the market is open. You can sell them any day the market’s open. If it’s an ETF, you can sell it every minute the market is open. They’re super liquid, whereas lots of real estate investments are not liquid. You might have to own them for 5 or 10 or 20 years. It just depends on how the investment is set up. So, certainly an advantage for stocks there to make up for some of the other advantages that real estate may have.
Both of these investments can be efficient. What do I mean by efficient? Well, the publicly traded stock market is highly efficient. It’s not perfectly efficient, but compared to the real estate market, it might as well be. There are many opportunities to outperform and underperform in real estate, depending on your skill level. Now that’s not necessarily a good thing or a bad thing, but the nice thing about investing in stocks is you can just buy index funds and you know you’re going to do pretty darn well. Over the long run, you’re going to outperform almost all actively managed investors.
But if you want to add value to your investments, probably picking stocks isn’t the way to do it. You’re much better off spending that time on the real estate side. Now, it’s way easier to underperform on the real estate side because you can’t just go buy the index fund that owns all the private real estate in the US. It doesn’t exist. But there’s also the opportunity to outperform because real estate is very local. And if you’re good at it, you really can add value there.
Volatility is something to consider between these two investments. And stocks seem more volatile, but how much of that is just because they’re marked to market every day? That’s probably one aspect of it. But certainly your investment in stocks can drop dramatically. That applies to publicly traded real estate as well.
I remember in 2008, I think stocks dropped something like 45%, 48%, something like that. Publicly traded REITs, the Vanguard Real Estate Index Fund from peak to trough dropped 78% in value. Anything that’s traded on the markets, it really can be very volatile. Whereas a private real estate investment that you own that isn’t marked to market every day, nobody’s out there doing an appraisal every single day, feels a lot less volatile. It might be a little bit easier for you to stay the course.
The bottom line, both stocks and real estate are great investments. Real estate is a little bit more work, but it has a few cool advantages to go along with it. Both have high returns, and they have relatively low to moderate correlation with each other. And so, I think there’s a lot of advantage to having both in your portfolio. You do not have to choose between these. You can have both if you want. But you do not have to have both. It’s possible to be successful just with real estate, and it’s possible to be successful never touching real estate at all. It is an optional asset class. I hope that’s helpful to you.
SPONSOR
Earlier, we mentioned working locums with CompHealth, the number one staffing agency. But CompHealth isn’t just a locums agency. CompHealth staffs regular permanent positions across the nation as well. They also offer telehealth, medical missions, and more. And that’s what makes them unique. They can look at your situation and offer multiple solutions to build your career the way you want it and meet your financial goals.
And they know their stuff, especially when it comes time to negotiate contracts, which they’re willing to do for you. So, whatever career move you’re looking for, use the power of CompHealth to build your career your way. Learn more at comphealth.com.
If you’re interested in coming on this podcast, we’d love to have you. We want to celebrate your milestones, no matter how big or how small they are. You can sign up at whitecoatinvestor.com/milestones.
Until next week, keep your head up, shoulders back. You’ve got this. The whole White Coat Investor community is here to help you. We’ll see you next time on the podcast.
DISCLAIMER
The hosts of the White Coat Investor 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.
The post Heroes of My Life — Part 1 appeared first on The White Coat Investor – Investing & Personal Finance for Doctors.