Why Do High-Earning Doctors Struggle to Build Wealth?

Episode: Income vs Wealth: An Orthopedic Surgeon’s Playbook for Physician Wealth Building

Show: GrowOrtho Podcast

Host: Luke Infinger, founder of HIP Creative Guest: Dr. Eric Nilssen, orthopedic surgeon and founder of WealthDx and Strategic Doctor

Published: Apr 26, 2024 · Last updated: Apr 26, 2024

Summary: A physician earning the average $350,000 a year is a top 1% global earner, yet only 7% of physicians have a net worth above $5 million and roughly half work past 65 because they have to. Dr. Eric Nilssen, an orthopedic surgeon who built and sold his own practice, argues this is an outflow problem, not an income problem, driven by lifestyle creep and a near-total lack of financial literacy in medical training. He walks through the systems he uses to fix it: tax strategy, properly structured whole life insurance run as a personal banking tool, and the disability coverage every healthcare professional needs before they need it. The same math applies to dental and orthodontic practice owners, who face the identical gap between a high income and actual wealth.

Topics covered: income vs wealth, financial literacy for high earners, tax strategy, whole life insurance and “infinite banking,” term vs whole life, disability insurance for doctors, accumulation vs distribution planning, the “Me, Incorporated” mindset.

Key entities: Dr. Eric Nilssen, Luke Infinger, GrowOrtho, WealthDx, Strategic Doctor, American Heritage Financial, Principal, Andrews Institute, Dr. James Andrews, Medscape, Dave Ramsey, Warren Buffett.

About the expertise behind this episode

Dr. Eric Nilssen is a board-certified orthopedic surgeon with 15 years in practice. He trained at the University of South Florida and McGill University, completed a sports medicine fellowship under Dr. James Andrews, and built Nilssen Orthopedics in Gulf Breeze, Florida before founding the physician financial-education platforms Strategic Doctor and WealthDx. He speaks on physician finance from the position of someone who made the same money mistakes early in his career and spent years correcting them. WealthDX: https://wealthdx.com/

Luke Infinger is the founder of HIP Creative and co-creator of PracticeBeacon, where he has helped more than 500 dental and orthodontic practices nationwide grow, and is the bestselling author of The Scalable Practice, Front Desk Secrets, and The Ultimate Treatment Coordinator, Master Your Mindset. Connect with Luke on [https://www.linkedin.com/in/luke-infinger-b36a001b/].

Intro

Physician wealth building is one of the few problems where earning more money does not fix it. The average physician makes around $350,000 a year, which puts them in the top 1% of earners on the planet. And yet the retirement numbers are grim: most doctors reach their 60s without anywhere near the net worth their income should have produced.

Dr. Eric Nilssen has lived both sides of that gap. He spent 15 years as an orthopedic surgeon, built his own practice, and early on did exactly what most high earners do when their income jumps overnight. He bought the car, the house, the boat, and then wrote his first big tax check and realized something was broken.

On this GrowOrtho episode, he breaks down the systems he wishes someone had handed him on day one. The framing is physician-first, but if you own a dental or orthodontic practice, you are the same character in the same story: a high income, a high tax bill, and almost no roadmap for turning one into lasting wealth.

Key takeaways

• The average physician earns about $350,000 a year (a top 1% global income), yet only 7% have a net worth over $5 million and roughly half carry a net worth around $2 million.
• About half of physicians work past age 65 because they have to, not because they want to. The problem is outflow and lifestyle creep, not income.
• Medscape’s annual surveys consistently show physicians name “more compensation” as the fix for burnout, which is the wrong diagnosis if the real issue is what leaves the account, not what enters it.
• An estimated 30% to 40% of physicians will file a disability claim at some point, and most claims come from illness like cancer, not accidents.
• Many employer-provided disability policies are functionally worthless because of how the riders are written; an independent own-occupation policy can pay roughly $15,000 a month tax-free until age 65.
• Properly structured whole life insurance can be used as a personal banking tool with uninterrupted tax-advantaged compounding, but the phrase “properly structured” is doing all the work.
• Popular advice like “buy term and invest the rest” is built for a $30,000-to-$80,000 earner, not a physician or practice owner in a far higher tax bracket.

Why do doctors earning $350,000 a year still struggle to build wealth?

The disconnect is the whole point of the episode. Dr. Nilssen lays out the math plainly: the average physician earns roughly $350,000 a year, a top 1% income worldwide, yet only 7% of physicians have a net worth above $5 million, about half sit near a $2 million net worth, and half keep working past 65 because they cannot afford to stop. A top income paired with a mediocre balance sheet is the norm, not the exception.

His diagnosis is that this is an outflow problem disguised as an income problem. When Medscape runs its annual burnout surveys, physicians overwhelmingly say more compensation would fix how they feel. Dr. Nilssen’s counter is that a top 1% earner does not have an income problem. The money is coming in. It is leaving faster, through taxes, lifestyle creep, and decisions made without any financial literacy, because none of this is taught in medical school. A practice owner who only ever learns to widen the top of the funnel keeps running into the same wall.

Income vs wealth: what’s the difference and why does it decide your retirement?

Income is what you earn. Wealth is what you keep and what keeps producing for you after you stop working. Dr. Nilssen draws the line by describing his own week: it is a Thursday, his colleagues are all operating, and he is sitting by the pool reading because he built income streams outside the practice. That is wealth doing the work instead of his hands.

He frames the timing with a Kilimanjaro analogy. Plenty of climbers summit; far fewer make it back down safely. Retirement is the summit, and most financial advice obsesses over the accumulation phase, the climb up. The phase that actually decides whether you keep your legacy is the distribution phase, the descent, when you draw the money down. Running out of money halfway down the mountain undoes everything the climb was for. For a high earner, planning the descent matters as much as planning the climb, and most never plan it at all.

Why is the old “physician plus patients equals income” model broken?

Dr. Nilssen calls the way doctors are trained to think the “microeconomic linear model”: physician plus patients equals income. Graduate, hang a shingle, see patients, get paid. That formula used to be enough. It no longer is, because reimbursements from insurance carriers have fallen year over year for two decades while expenses keep climbing, and the practitioner has zero control over either lever.

His alternative is to run yourself as a business he calls “Me, Incorporated,” whether you are employed or independent. Finance touches your work, your home, your taxes, and your lifestyle as one connected system, so tax strategy, asset protection, insurance, and investing have to be designed together rather than bolted on one at a time. For a dental or orthodontic practice owner, the parallel is exact: the clinical skill that built the practice is not the same skill that protects and compounds what the practice produces.

How does properly structured whole life insurance work as a banking tool?

This is the section most likely to get argued about online, so the framing matters. Dr. Nilssen is not using whole life mainly for its death benefit. He uses it for what the industry calls the living benefit, treating a properly structured whole life policy as a personal banking and cash-savings vehicle. The concept is sometimes marketed as “infinite banking.”

Here is the mechanic he describes. The policy’s cash value grows with uninterrupted compounding, meaning a down market does not reset your gains the way a stock loss can. When he wants to fund an investment, he borrows against the cash value. The insurer places a lien on the policy rather than withdrawing the money, so the full balance keeps compounding as if nothing left. He then puts the borrowed money to work (his example is buying a CT scanner that generates revenue for the practice) and repays the policy loan over time. The same dollar is effectively working in two places at once. He also values the tax treatment: he pays tax on the “seed” by funding premiums with post-tax dollars, after which the money grows and can be accessed tax-free, plus the cash value is generally creditor-protected.

The repeated caveat is “properly structured.” He spent two years skeptical before he bought in, and he is emphatic that this only works when the policy is designed by someone who does this specifically, not a family friend who sells insurance on the side. Note that policy loans, guarantees, and tax treatment carry real conditions, so this is education from the episode, not individual financial advice.

Term vs whole life insurance: which does a high earner actually need?

Dr. Nilssen’s answer starts with a question: what are you trying to achieve? He resists the all-or-nothing framing the internet pushes. Term insurance is exactly what it sounds like, coverage for a set period, and it serves a real purpose. Whole life is a different tool for a different goal. He personally holds both, term for straightforward death-benefit coverage and whole life as the banking and savings strategy described above.

He addresses the Dave Ramsey objection directly, since “buy term and invest the rest” is the default advice most people find online. His view is that Ramsey gives genuinely good guidance, but to a different audience: the person earning $30,000 a year who just financed an $80,000 truck. That advice is sound for most of the country. It is not necessarily built for a physician or practice owner sitting in a much higher tax bracket with different tax and asset-protection problems to solve. The takeaway is to match the advice to where you actually are, not to the average listener it was written for.

Why is disability insurance non-negotiable for doctors (and how do policies quietly fail)?

Dr. Nilssen draws a hard line here: not every healthcare professional needs life insurance, but every one of them needs disability insurance (DI). His estimate is that 30% to 40% of physicians will use their disability coverage at some point, and the trigger is usually illness like cancer or disease, not a dramatic accident. People assume disability is a 1% risk. It is not.

The trap is that having a policy is not the same as having coverage that pays. The detail that decides everything is the own-occupation rider and how the policy is written. A surgeon who loses the use of a hand needs a policy that pays because they can no longer operate, even if they could technically go lecture or run a hospital. A well-written own-occupation policy can pay around $15,000 a month tax-free until age 65 in that scenario. A poorly written one, or many employer-provided hospital policies, can pay nothing once you are capable of doing any other work, and some will cancel coverage on that basis. He flags Principal as one of the stronger carriers for healthcare professionals and notes WealthDx has an arrangement for streamlined approval for residents and trainees through volume. The action item for employed doctors is to secure an independent private policy rather than relying on the hospital plan.

What mindset separates doctors who keep their money from those who don’t?

Dr. Nilssen is direct that this starts as a mindset problem before it is a math problem. When his income jumped from roughly $50,000 a year as a resident to $50,000 a month as a new attending, he fell into the same lifestyle creep as everyone else. The shift came from a line his father gave him: it is not how much you make, it is how much you hang on to. He taught himself the difference between a tax deduction and a tax strategy, late at night with Google, because he did not trust handing six figures to a planner on faith.

He also reframes the timeline as a long game. Most of Warren Buffett’s net worth was built after his mid-50s, the product of decades of patient compounding rather than a few lucky trades, which is the same reason Bill Gates describes his early “ten dark years” of grinding. The discipline that builds a practice is the same discipline that builds wealth: show up consistently, provide more service than you are paid for, and let time do the heavy lifting. For type A high achievers used to knowing every answer in their field, the hard part is admitting they do not know the answers here, and getting honest help before fixing it on their own.

FAQ

Do physicians actually have an income problem? No, according to Dr. Nilssen. The average physician earns about $350,000 a year, a top 1% global income. The gap between that income and most doctors’ net worth comes from outflow: taxes, lifestyle creep, and a lack of financial literacy that medical training never addresses.

What percentage of physicians use their disability insurance? Dr. Nilssen estimates 30% to 40% of physicians will file a disability claim at some point. Most claims come from illness such as cancer rather than accidents, which is why he calls disability insurance non-negotiable for every healthcare professional.

Is whole life insurance a good idea for high earners? Dr. Nilssen uses properly structured whole life as a personal banking and savings tool for its living benefit, not primarily for the death benefit. He stresses that the structure is everything and that it should be designed by a specialist. Policy loans and tax treatment carry conditions, so this is general education rather than personal financial advice.

Does Dave Ramsey’s advice apply to doctors? Dr. Nilssen credits Ramsey with helping a lot of people, but views “buy term and invest the rest” as guidance aimed at entry and middle-income earners. He argues a physician or practice owner in a much higher tax bracket faces different tax and asset-protection problems that the advice was not written for.

Why do so many physicians work past 65? Roughly half work past 65 because they have to, not because they want to. Dr. Nilssen attributes this to focusing only on the accumulation phase while ignoring the distribution phase, the years when the money is drawn down, where poor planning causes people to run short.

Glossary

Income vs wealth: Income is what you earn from working; wealth is what you keep and what continues producing after you stop working.

Living benefit: The use of a life insurance policy’s cash value while you are alive, as savings or collateral, rather than only as a death benefit paid out later.

Infinite banking: Using a properly structured whole life policy’s cash value as a personal lending source, borrowing against it while the full balance keeps compounding.

Own-occupation disability: A disability policy that pays if you can no longer perform your specific profession, even if you could work in another role.

Accumulation vs distribution phase: The accumulation phase is building savings during your working years; the distribution phase is drawing that money down in retirement.

Lifestyle creep: Spending rising to match a rising income, so a larger paycheck does not translate into larger savings.

Watch the full episode

The full conversation goes deeper on tax strategy, the “Me, Incorporated” mindset, and how Dr. Nilssen vets the people he trusts with his money. Watch or listen to the full GrowOrtho episode here: https://youtu.be/R0CfLm0brJ8

Full episode transcript

[00:00] Introductions: the “other ortho”

Luke: Dr. Eric Nilssen, thanks so much for coming on the GrowOrtho podcast.

Dr. Nilssen: Thank you very much.

Luke: So you are not an orthodontist. You are the other ortho.

Dr. Nilssen: I’m super excited. I’m the other ortho, probably the only other ortho that’s been on this podcast. We go back a ways. For the listeners: I’m an orthopedic surgeon, been in practice for 15 years. I left the Andrews Institute, went out on my own, and Luke’s team was instrumental in introducing me to the importance of marketing. I was one of your first healthcare clients. Luke grew that practice by leaps and bounds for me. Then Luke realized how much better the business sense is working with the other ortho than with MD physicians. Hate to dog my own class, but that’s the truth.

Luke: Appreciate you saying that. Tell us a little about you. Where did you go to school? How did residency and training happen? You mentioned the Andrews Institute. Give us a five-minute snapshot.

Dr. Nilssen: I grew up in Charlotte, North Carolina, great parents, older brother. In 9th grade I knew I wanted to be an orthopedic surgeon. I saw a knee replacement surgery on PBS one Saturday. My dad saw me watching it and asked if I wanted to do that, and I said yes. I wrote it on a note card and stuck it on my window, and I stared at “I’m going to be a doctor one day” from 9th grade until I graduated. That was my purpose.

I went to Auburn University for undergrad, took two years off, then USF med school in Tampa. From there I went to McGill in Montreal for a five-year orthopedic residency. The king of orthopedics was Jim Andrews, so I got a fellowship with him in sports medicine, then did foot and ankle. My dream was to take care of athletes. He brought me to his center in Gulf Breeze, Florida, and I built the foot and ankle program, taking care of Auburn athletes and pro athletes.

I was king of the hill. Then I got into the hospital politics. I was independent in an employed center, and things got sticky. Like my dad said, I’ve always been unmanageable, which is a compliment. I wanted to control my own life and didn’t want to be an employed physician, so I left and started Nilssen Orthopedics. With your help we transitioned. It was a scary time. You helped me grow it, I added a partner, and we’ve been in practice ever since. I’m married, have three kids, and I’ve accomplished everything I wanted from an orthopedic standpoint. I turn 50 next week, and the next chapter is helping young physicians avoid the troubles I see out there.

[00:04] Income vs wealth

Luke: One of the big problems you realized for yourself is creating wealth, not just earning income, so you can enjoy your time with your family and leave a legacy.

Dr. Nilssen: Absolutely. You start working and you’re focused on income, income, income. But as a private practitioner, pensions are gone. Nobody hands you a book that says here’s what to do for 20 years and then you’re set. When you understand the difference between income and wealth, things change. Today’s a Thursday. My colleagues are all working. This is my admin day. I got to sit by the pool and read this morning. That’s the difference. If we can help physicians create wealth and ancillary income outside the practice, that matters, because it’s genuinely hard to generate income today when reimbursements are going down and expenses are going up.

Luke: Things have changed tremendously.

Dr. Nilssen: Dramatically. I talk about burnout. I’m burned out. I’ve done what I wanted to do, but I don’t like where things are going. So what can I do to help the people just getting started, who still love it but hate the daunting tasks and strain?

[00:06] From Strategic Doctor to WealthDx

Luke: I don’t even really know what you’re up to with finance and advising. Start at the transition from Strategic Doctor to what you’re doing now.

Dr. Nilssen: You helped me get started with Strategic Doctor. Having been in practice 15 years, I was challenged to figure out how to help other physicians. Everyone pushes research and education, which matters, but over the last five to six years there’s a financial crisis physicians are facing. So we built an educational platform focused on financial wellness. As we got into it, we needed a fulfillment arm too, so we partnered with American Heritage Financial, which handles life insurance, disability, assets under management, contract review, and more. The result is a pathway that meets a physician where they are, because someone ten years into practice has very different needs than someone just starting. WealthDx is the educational platform, and it preaches financial wellness because burnout and depression have reached epidemic levels. Around 80% to 90% of physicians report burnout, and that leads to depression, and in the worst cases to suicide. We’re talking on the order of hundreds of physician suicides a year, which is horrible.

[00:08] Why none of this is taught

Luke: What’s ironic is none of this is talked about in school. Doctors come out unprepared. They’re brilliantly trained and very analytical, but when you zoom into one thing for so long, you miss a lot else, including financial literacy. So how do you start to make them aware of what they need to know?

Dr. Nilssen: I call it the microeconomic linear model. Doctors are taught to think linearly: physician plus patients equals income. In that model you graduate, hang a shingle, and you’re fine. That model is now broken. Whether you’re employed or independent, you still have to run yourself. You’re running a business called Me, Incorporated. Finance influences your lifestyle, your work, your home, all of it. Tax strategy, life insurance, asset protection, it all has to work together.

Here’s the deal. The average physician makes $350,000 a year, a top 1% global income. So when I say you don’t have an income problem, they look at me like I’m crazy. Yet only 7% of physicians have a net worth over $5 million, about half are around $2 million, and half of physicians work past 65 because they have to. That’s the disconnect. Lifestyle creep and financial literacy are the main reasons. Expenses are skyrocketing and reimbursements have decreased for 20-plus years. Medscape puts out studies every year. They ask the number one contributor to burnout and what would fix it, and physicians say more compensation. But they don’t have an income problem. They have an outflow problem.

[00:11] Mindset and behavior

Luke: It’s the culture as a whole. I was talking to a sales guy whose goal was to make $10,000 a month, and I told him he doesn’t behave like someone who makes $10,000 a month. There’s a disconnect. If you don’t focus on the lead measures, the behaviors and habits and discipline, the lag measure never happens. Society doesn’t teach this. If it did, more people would be winning. A lot of it comes back to how you show up every single day. So what did you do, how did you figure it out, and what do you see successful people do? I’m not talking about people worth $20 million, just people who do well with some security and some legacy.

Dr. Nilssen: It’s mindset. When I started in 2009 as a resident and fellow I made $50,000 a year, and that hasn’t changed much. Then you jump to $50,000 a month. Massive. I fell victim like a lot of people: nice car, house, boat. But when my first big tax bill came and I wrote a sizable check to the government, I remembered my dad saying it’s not how much you make, it’s how much you hang on to. I realized I had an outflow problem with taxes. The mindset piece was that I felt uncomfortable handing hundreds of thousands to a planner and asking how it works out 25 years later. I had a trust issue. So I taught myself, late at night, the difference between a tax strategy and a tax deduction and depreciation. What’s a 1099 versus a W-2. The types of life insurance. Whether I had the right disability insurance.

I heard you say on another podcast that doctors are trained to be technicians. I was born with an entrepreneurial spirit. In clinic from eight to five, the technician hat is on. Driving home, I put the entrepreneur hat on for an hour, then the manager hat. The question becomes how to work on your life, not just in it. Spirituality mattered to me, and my wife told me early on she didn’t sign up for me going crazy over this. Through maturity I learned to vet people. What we do now is what I wish someone had done for me. The goal is empowering physicians, not enabling them. Physicians are type A and supposed to know everything in medicine, but ask them how much they want to retire with and they don’t know, and that frustrates them. We have to massage that.

[00:16] The discovery process

Luke: What are some of the false beliefs? Maybe they come in with things set up that aren’t in their best interest. Where do you start?

Dr. Nilssen: There’s a discovery phase. Last night I gave a one-hour lecture to LSU med students on Zoom and the response was overwhelming. If I could talk to med students and residents all day I would, because they’re not tarnished or bitter yet. A physician ten years out is harder to backtrack with. We start with an intake, a two-page form that takes about 15 minutes: what’s in savings, what you’re invested in, how heavily you’re in the market, what life and disability insurance you have. We put it on a spreadsheet and project where you’ll be in ten and 20 years, then show how tweaking a couple of things changes the outcome. It’s about a system. Everything you do here is a system. We build a financial system based on math that answers what you need to retire and how much you’d have to reduce your lifestyle.

Everyone’s focused on the accumulation phase. Picture 2,000 people summiting Kilimanjaro but only 1,000 making it down. Retirement is the peak. What good is busting your tail to accumulate if you run out halfway down the mountain in your golden years? Nobody focuses on the distribution phase, and that’s the target: make it down and leave a legacy. That’s what separates us from the everyday financial planner.

[00:19] Short game vs long game

Luke: I’d categorize that as short game versus long game. Society teaches us to focus on right now. Back to that sales guy: you’re making $350,000 now, but what happens when you don’t, or when you get arthritis in your hands? If you invested 20% to 30% of your income for a decade in the right products and had the right disability coverage, you could sustain it. I was listening to something about Warren Buffett. Most of his wealth was built later in life through patient compounding, not a few lucky trades. He made hundreds of average decisions but stayed disciplined for decades. Most of us wouldn’t be that patient. Investments are the long game. There’s no overnight. As you grow a private practice, yes it’s skill, but a lot of it is risk, and you could call the rest luck or blessings. The Bible says a worker is worthy of his wage. Do the work for 30 years and you’ll earn a good wage. But keeping it and stewarding it well is the part we don’t think about.

Dr. Nilssen: To put a bow on that: Tiger Woods, arguably the most famous golfer ever. Do you want his clubs or his swing? You want the swing. That’s the long game. Clubs help, but in the end you want the swing.

Luke: Bill Gates talks about his ten dark years living at Microsoft. You sacrifice a lot. Look at what physicians sacrifice for schooling, training, and residency. The same is true for the next phase in business. You put the shingle up and think you made it, but it’s another 10, 20, 30 years. You can enjoy it, but statistically the first ten years as a business owner are a climb.

Dr. Nilssen: It’s a grind, no question, and harder now. Look at the characters in the play: the government, the hospitals, the insurance companies, the patients, and the physicians. The government, hospitals, and insurers play in the same sandbox. The physicians and patients are in a different one. I always ask what you can control. I can’t control insurance carriers, the government, or hospitals, so I don’t fight with them. All I can control is my world: provide the best care I can, and provide service well above what I’m paid for. To this new generation, that sounds like a foreign language.

Dr. Nilssen: Entitlement is the pull. You can instill the opposite. I tell my kids: provide more service than you’re paid for, keep grinding, and the fruits of your labor will come. Teaching young physicians that, and helping them not lose the love of caring for patients while reimbursements drop and expenses rise, is the whole game. Being more efficient through education changes that paradigm.

[00:25] How life insurance actually works

Luke: Jumping into practical things. To be clear, we don’t do business together, we’re just friends. You and I talked maybe six or seven years ago about life insurance and you gave me a thin book, almost magazine size, and it made complete sense. Other high earners vouched for it. But everything on the internet says don’t get whole life. I have both now, term to insure me and whole life as an investment strategy. Can you give a brief overview of how life insurance actually works?

Dr. Nilssen: It’s the million-dollar question. There are two types: term, which is exactly what it sounds like and serves a real purpose, and whole life. When you look at any product, the first question is what’s your goal, what are you trying to attain. Life insurance has a death benefit, what your family gets when you die. There’s also a living benefit, which is the part people don’t understand. I’m not using my whole life mainly for the death benefit. I’m using it for a living benefit, as a cash savings plan, because Wall Street scares me and you can’t predict it. People cite a 10% average annual return over 100 years, but I can show you mathematically how a 25% return on a dollar over four years can leave you with less than you started. Everyone focuses on rate of return and not the volume of money.

Back to life insurance: properly structured is the whole key. A few mutual insurance companies offer products built for banking. I use mine as a banking policy. As a high wage earner, why carry any risk of losing money? My policy has a 0% chance of losing money and it uses uninterrupted compounding interest, which is the key. People say their stocks compound every year, but when you take a loss it resets everything. Uninterrupted compounding is the eighth wonder of the world, a line often attributed to Einstein. It’s safe and secure. I like paying tax on the seed, not the harvest. I fund premiums with post-tax dollars, it grows tax-free, and it comes out tax-free. I have no idea what my tax rate will be in 20 years, but I’d bet it’s higher than today. I like the asset protection too, it’s creditor-proof, and I’m in control.

I’m the bank and the borrower. If I want to make an investment, I pull money from my cash value. The company puts a lien on the policy because the money never actually left, so it keeps compounding as if uninterrupted. Then I use that money to, say, buy a CT scanner for my office, which makes money and serves patients on site. I pay back the policy because of the lien, but it compounded the whole time as if it never left. My money is working in two pockets. I get to write the promissory note and write off the interest. The concept was called infinite banking. It took me two years to buy in, honestly, because it seemed too good to be true.

After doing it, I started in 2012 and never looked back. When someone says “whole life,” it’s like saying all wine is the same, which is ignorant. And there’s the Dave Ramsey factor. Ramsey pushes “buy term, invest the rest,” but as a physician, Ramsey isn’t talking to you. He’s talking to the person making $30,000 a year who just bought an $80,000 truck.

Luke: He’s talking to the entry level or middle class, and there’s nothing wrong with that. You have to know what advice is sound for where you are. He does that well for most people, especially on debt, since that group holds the most debt they can’t pay back. So I applaud what he does, but most of it may not be relevant for our audience.

Dr. Nilssen: They’re generalizations. I just wish he’d say whole life has a place for certain people instead of being so anti. He’s done a lot of good. But if you truly understand whole life, the key is that it’s properly structured, set up by someone who knows exactly what they’re doing, not a friend or a dad’s colleague.

Luke: Maybe someone’s thinking they’re 60 and whole life doesn’t fit.

Dr. Nilssen: Not necessarily. It depends. Some people have generational tax issues and are moving money to certain places, so it’s not too late. You can pay premiums your whole life, or for ten years, or structure it many ways. You don’t have to be a high wage earner; you can do the same thing on a smaller scale. There’s really no age cutoff.

[00:33] Disability insurance

Luke: How about disability? That’s a big risk for doctors. If you smashed your hand, that’s game over. How does it work?

Dr. Nilssen: We’re education-based with a fulfillment arm for life insurance, and I always tell people not everyone needs life insurance, but every healthcare professional needs disability insurance. About three or four companies write good policies, and there’s an art to how they’re created. People think they have disability, but it depends on the company and how the policy is written. As a surgeon, if I’m in a car accident and lose some fingers, depending on the policy I either get paid until I’m 65 tax-free or I get zero. You may think you have it, but you don’t have it until you actually need it. One of the best carriers for healthcare professionals is Principal. We have an agreement with them, so residents and trainees can get automatic approval through the volume we produce, whereas otherwise there’s an interview, a physical, and coverage limits.

Disability is a huge deal. When I first set mine up it was a friend of a friend, and later I looked back and realized it would’ve been a disaster if I’d gotten hurt. People ask how common injury is. About 30% to 40% of physicians will use their disability at some point. It’s not 1%, and it’s usually not trauma, it’s illness like cancer or disease where they can’t work.

One more thing about employed physicians. When you’re independent, you’re forced to get a private policy, which is what you should do. Half the employed physicians we talk to have disability through their hospital, and it’s often a catastrophic nightmare with little real coverage. They think they have own-occupation, but there are riders where if you get hurt and can’t operate, but you can lecture or be a hospital CEO with an MBA, some policies will cancel because you can do something else. The right policy pays around $15,000 a month tax-free until 65 regardless of what else I do, because I can’t cut. As soon as you can do anything else, the hospital policy stops covering you, so employed physicians really need a private policy. There are also policies now where you can stack two, and if you never file a claim by 65 they return premium to you, with more coverage too.

[00:36] Where to find Dr. Nilssen

Luke: Awesome. Thanks so much for coming on the show. If people want to get a hold of you, what’s the best way?

Dr. Nilssen: The website is wealthdx.com. We had a soft opening a little while ago. Otherwise, shoot me an email through the site.

Luke: Thank you.

Dr. Nilssen: Thanks, Luke. Enjoyed it.