MtoM #1 - High COLA Family Doc Slays $400K in Student Loans

This is the White Coat Investor Podcast, Milestones to celebrating stories of success along the journey to financial freedom. Here is your host, Dr. Jim Dali.

This is the first episode of Milestones to Millionaires podcast. Now, over the years, we've had a few really popular episodes of the White Coat Investor Podcast, and they're usually the ones where we get regular listeners on and talk about some great things they've accomplished in their lives. Such as, such as paying off their student loans or becoming particularly financially successful. Becoming millionaires, for instance. And so this year we've decided to launch a second weekly podcast of the White Coat Investor. It's going to be shorter podcasts. We're not going to take Speak pipe questions on it. We're not going to have big, long interviews on it. What we're going to do is each one is going to feature one regular listener who has recently achieved a significant milestone in their life. And these might be paying off their student loans. Lots of those I expect. Becoming a millionaire, paying off their mortgage, perhaps hitting a net worth of zero. Becoming financially independent, receiving public service loan forgiveness, perhaps becoming a DECA millionaire. Really anything that you view as a significant financial milestone for you, we'd like to bring you on the podcast interview you share your success with your fellow listeners and hopefully inspire them to become similarly successful to you. We're going to release these episodes on Mondays.

We're going to continue to have the.

Regular White Coat Investor podcast released on Thursdays, but these will be released Mondays. We'll combine the show notes into the show notes that run on Thursdays on the blog and go with this. We think it's going to be really popular and you guys are going to really enjoy it and hopefully get a lot of inspiration out of it. But if you would like to apply to be on it, you can apply@whitecoatinvestor.com Milestones. That's whitegoatinvestor.com Milestones.

If you're like most doctors, nobody taught you anything about personal finance or investing during your undergrad, professional school or residency. Even though your family and perhaps even your business rely on you to be the Chief Financial Officer, you have never been given the tools to succeed. Enroll in WCI Financial Bootcamp, a free educational email series, and learn to convert your high income to wealth. You will learn the basics of investing, saving, insurance, and more. Your high income alone will not lead to financial success, but as always, we want to help you on your financial journey. Go to whitecoatinvestor.com financialbootcamp to sign up today. You can do this, and the White Coat Investor can help.

Okay. Today we have Dr. Emily Shah on the White Coat Investor podcast. Welcome to the podcast.

Hi. Thanks. Happy to be here.

We're excited to have you here to kind of celebrate a milestone that you've achieved. You've paid off your student loans in the last year, I understand.

Yeah. Not just mine. My wife is also a doctor, so we had just a little over $400,000 of student loans that we ended up paying off.

Wow.

And each of your specialties?

We're both family docs.

Both family docs. Okay. And how long did it take you to pay off that $400,000?

Well, we didn't end up paying it off until this year, and we graduated residency in 2013, and residency was three years. So however you end up calculating it, it took us seven years after residency to pay off our loans. But really, honestly, we didn't sort of flip our mindset. We were waiting for public service loan forgiveness, and we're sort of stuck in this rut of assuming that at some point, someday, if we just kept going, that it would get forgiven. And so we didn't really do anything actively for the first couple years out of residency. So it wasn't really until 2016 that we decided to turn it on.

And why was that? Was it that you realized that your.

Job didn't qualify for public service loan.

Forgiveness, or what was it that turned the switch?

It was multiple things. It was. We were both working at federally qualified community health centers, and our jobs qualified for public service loan forgiveness. But then I decided to make a change and stop working full time there and start doing some other things that were more of a potpourri of a job, collection of different things, and work in urgent care and pursue other interests. So I stopped qualifying in 2016 for public service loan forgiveness. And then my wife, Laura, she's still in that same job today that she had before. And what changed for her was that she kept submitting the forms for public service loan forgiveness. And then, even though literally her job was exactly the same, with the same supervisor, the same person signing the form every single year, about half of her forms would get rejected for no apparent reason, and nobody could tell her why. And so she started just getting really frustrated with that process since literally her job had not changed at all. And we just got fed up about it and decided. And decided to just screw it.

Just pay it off.

Yeah, exactly.

Awesome. So it sounds like you really did it over about four or five years.

Yeah.

And what do you think your income was Average income over that time period.

So together, the two of us, we were probably at the beginning around maybe like $280,000 in the beginning. And then Laura actually took a leadership position during that time, and then her income increased. So we were, the two of us together last year. You know, last year we're probably at like 320 or something like that.

So you dedicated a lot of income to this. You put a lot of income of your income toward paying this off.

And we also had two kids in the meantime, so we took long maternity leave. So actually we had two years when we actually made significantly less. But one of the things that we did that was important was we accepted a retention bonus at Laura's work. So that was $50,000, which helped actually pay off all of her private loans from med school. And then we refinanced all of our loans at 1.95%, which certainly helps when.

The money's going to principal instead of interesting, right?

Because it was, it was six and a half percent and then we refinanced to 1.95.

Now, impressively, you mentioned before the show that you live in a relatively high cost of living area. And so, you know, not, not the highest income we've ever had on this show for sure. A pretty significant student loan burden, a high cost of living area. And yet you still managed to do it. How did you do that?

It was literally flipping the switch in our brains. Like we went from just believing we were gonna. That debt was just a part of the way that everybody lived. And it was just, you know, this sort of assumption and that we were sort of stuck and feeling like that. And then we, like, literally it was a, it was a brain switch. And I mean, it was also like that that $50,000 from Laura's work really helped and I switched jobs. So I started working. Instead of working at the fqhc, I started working for Sutter, which is a private multi specialty practice. So my, my salary went up as well. So there were multiple different changes. We started budgeting and really paying attention to what we were. We didn't live like residents. I know that's a lot of your thing, but. So we didn't live like residents, but we really started paying a lot of attention, whereas before we weren't.

And what was the biggest disagreement you had over budgeting or something you wanted to spend more on or less on than she did?

I don't think there was so much disagreement as actually the biggest realization was actually how much money we were spending on travel, because spending Time with family is so important to us, and none of our family is local, and we have family in Hawaii and Spain and, like, all over the place, like, very far places. I don't think we realized how much we were spending on travel.

So did you dial the travel back or did you cut something else back to allow you to travel?

Well, coronavirus helped us. Honestly, we saved a ton of money this year, and that's actually why we were able to pay our loans off at least six months, if not more than that, earlier than we thought. But I think what we did was we were more cost conscious when we were looking at, like, Airbnbs and flights and, like, let's travel on a Wednesday instead of on a Saturday, or, you know, things like that.

What do you think? I mean, when you looked at this huge number you had in 2016, and you're like, we're going to pay this off. We're going to get rid of this, did it turn out to be easier or harder than you thought?

Oh, I think it actually ended up being easier. Yeah. I think for me, it ended up being easier. I think for Laura, I mean, I'm the one who does most of our financial stuff, and she's sort of someone who tends to stick her head in the sand, but, yeah, I think for us, it was probably easier.

And how's it feel to have the loans gone?

Oh, my gosh, incredible. Laura keeps saying all the time, I finally feel like an adult. We still have a mortgage. But, yeah, so she's like, I finally feel like an adult now. For me, it just feels like this incredible weight is off of me. And I know that our financial planner is like, your interest is so low. You should really be spending that, Putting that money into your investment account or your brokerage account or whatever, which we listened to him some, and we did put money there. But the emotional burden, just having that, the way that we were thinking about it as this sort of black cloud looming over us, and having that gone is a big deal.

So what would you say to somebody that's where you were four or five years ago. What advice do you have for them?

Oh, you can totally do it. You just have to decide that you want to do it. I mean, we're so smart, we're so capable. We're so capable of doing whatever we want to do. And so, really, for us, it was a matter of just setting our minds to it and then doing it. And then we did.

Awesome. Well, Dr. Shah, I'm proud of you. Nice work. Congratulations on your success. And thank you so much for coming on the White Coat Investor podcast.

Thanks for having me.

You're very welcome. All right.

A lot of takeaways you can get from this interview. First one I really want you to get is that you can still do this in a high cost of living area in a relatively low paying specialty. A lot of people use those two things as excuses for why they haven't become financially successful. But Emily and her partner have certainly demonstrated that this can be done in a high cost of living area. It can be done without being, you know, a spine surgeon. And so I want you to take that message away from it. Two, this took them seven years out of residency, but once they got serious.

It only took four.

And I want to point out that.

You can do this pretty quickly, you know.

Now imagine you're in a low cost of living area with a relatively high income specialty, right? Maybe instead of four years. Now it's a two year process, so keep that in mind. Next, they refinanced. Refinancing helps, right? They went from 6.5% to 2%, essentially, so that on a $100,000 loan is $4,500, on a $200,000 loan is $9,000 a year. That's going toward principal instead of interest. And that helps. It's not going to do it all by itself. Refinancing doesn't excuse you from actually living like a resident and throwing a whole bunch of money at these loans, but it does help. And of course, if you're looking for deals on refinancing, you can find those at our website under Recommended Refinancing resources. That specific URL is whitecoatinvestor.com student loan refinancing. But make sure you take advantage of opportunities that come up. Maybe it's inheritance, maybe it's a bonus, maybe it's a raise, maybe it's a change job. In this case, it was the pandemic that helped them spend less. Take advantage of those things and have them, you know, bump up your progress by months at a time simply by taking advantage of an unexpected opportunity. And of course, it's important to, to be intentional. You have to intentionally do this. Everybody wanders into debt. But there's only one way out, and that's to get intentional about paying it off.

If you're like most doctors, nobody taught you anything about personal finance or investing during your undergrad, professional school, or residency. Even though your family and perhaps even your business rely on you to be the chief financial officer, you have never been given the tools to succeed. Enroll in WCI Financial Bootcamp, a free educational email series, and learn to convert your high income to wealth. You will learn the basics of investing, saving, insurance and more. Your high income alone will not lead to financial success, but as always, we want to help you on your financial journey. Go to whitecoatinvestor.com financialbootcamp to sign up today. You can do this and the White Coat Investor can help.

Head up, Shoulders back. You've got this and we can help. We'll see you in a few days on the regular episode of the White Coat Investor.

My dad your host, Dr. Dahl, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney or financial advisor, so this podcast is for your entertainment and information only and should not be considered official personalized financial advice.