MtoM #104 - Dual Physician Couple Pay Off Loans During Residency

This is the White Coat Investor Podcast, Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom.

Milestones to millionaire podcast number 104 dual physician couple pays off student loans in residency. Do you ever find yourself wishing there was somewhere to go to ask your finance, insurance or investing questions? The White Coat Investor community is a great place to turn. We have a thriving community across all of our social Facebook, Twitter, Instagram, Reddit and our WCI forum. We have been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other White Coat investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this and the White Coat Investor can help. Welcome back to the Milestones to Millionaire podcast. This is the podcast where we celebrate with you your financial accomplishments, no matter how big or how small they might be. If you'd like to come on this podcast, apply@whitecoatinvestor.com Milestones by the way, if you are a medical or dental student, we have a webinar coming up in like a week and you can sign up for this whitecoatinvestor.com student webinar. And this is the talk I would give if I came to your medical school. Andrew Paulson, our student loan guru, he runs student loan advice for us. He is also going to come on and help with this webinar. And so we're going to answer all your questions just like we would if we were able to come out to your school in person. Unfortunately, we cannot come out to all the medical schools that invite us. Not only don't have the time to do it, but you know, medical schools never have any money either. So this is the best we can do is to reach you virtually. So please tune into that webinar. Sign up today. We'll send you a reminder. Whitecoatinvestor.com student webinar totally free to you, right? Totally free. Okay, we got a great guest today who's accomplished some pretty impressive milestones. Let's get him on the line. Our guest today on the Milestones to Millionaire podcast is Edgar. He is an anesthesiologist and has recently accomplished not one, but two milestones. Welcome to the Milestones to Millionaire podcast.

Thank you so much, Jim. Thanks for having me.

Before we get into what you've accomplished, tell us about your specialty and where you're at in your career and what part of the country you live in. Sure.

So, yeah, my name is Edgar Ramadi. I'm currently a CA2 or a PGY3 at the Beth Israel Hospital in Boston, Harvard Medical School. And right now I'm just living here, finishing up residency with my wife, who's also a current internal medicine resident.

Okay, so a two resident couple in a fairly expensive place to live. All right, now we're going to impress our listeners by telling them what your two milestones are.

Awesome. So, yeah, my two milestones are. The one is we got rid of a good amount of debt, about $100,000. And we also were able to accrue a good amount of money in our bank accounts and other investments, about $250,000.

Wow. So you have paid off your student loans during residency and built a net worth of a quarter million dollars already, which is pretty awesome considering that I don't know how I would have paid off any student loans during residency. I didn't happen to have any. I owed time, not money. But I think I left residency with a net worth of like 10,000 or $20,000 at the end of it, you know, much less halfway through, like you are. So let's start with the first one of these of these milestones. Let's talk about the debt. First of all, you've done something very impressive that the two of you somehow got through school with only $100,000 in debt. So tell us about what you did to pull that off. I assume there's some scholarships, some parental help, something enabled. You couldn't have paid for all of that just with loans and only come out with 100. How did you keep it so low?

Absolutely. So, I mean, the first thing is, you're absolutely right. We did have some help from our parents. A lot of people do. A lot of people, unfortunately, take full loans, and that certainly makes the repayment process that much longer. But for one, that was helpful. The other one is also through scholarships. When I attended a college at Boston University, I did have a scholarship, which helped a little bit as well. But overall, we did still have a good chunk of debt that was left over about $100,000, and we were able to pay that off ourselves entirely.

How'd you do it on a resident salary? I mean, what are residents making this year? I haven't looked up resident salary for PGY3 at Beth or Israel, but I assume it's around 60 grand.

Yeah, so actually I make about 72 grand and my wife makes about 68, so about $150,000 combined.

So you're right.

There definitely is more to that. We were both non traditional Students. So we worked for two years. Not very high paying jobs in it of itself, but that helped a little bit as well. But a good chunk of that debt, about 50 to 60k, that was left over, we also paid with our resident salaries.

So you carved money out of your resident salaries and used it to pay off student loans during residency?

Correct.

Very well done.

Thank you.

Very well done. I'm impressed. I think most people, and it's probably fine, you know what most people do, which is tread water in residency. In fact, there's a whole lot of people that leave residency owing more than they started residency, much less paying them off. But you guys managed to do that. So was this a priority for you? Is this a goal you had? How did you end up, how did you end up going down this pathway? Did it just happen that you just don't spend very much and you had nowhere to send your money so you sent it to your, to, you know, your lenders? How'd you get to that point?

No, that's a, that's a great point. Honestly, finance and just, I guess if you want to call it frugality, has always been something that I've just been doing. I guess it was part of the way that I was raised. I didn't go and always buy extravagant things. I didn't buy frivolous things that, you know, I couldn't really explain purchasing. So I think one of the big reasons why we're able to put away a lot of that money is because we both share that mindset. And so it's very reasonable when we look at our kind of budgeting where we are able to put away about 65, up to 85% of our salary every month. So with that amount of money, it's not a lot, but it's definitely enough to make a dent. And as you can see, it has made a pretty good dent on everything that we have. And now we don't have any more debt.

That might be the highest saving rate I've ever heard from a resident. That's pretty awesome.

Thank you.

65 to 85%. Well, I think that probably explains most of how you were able to reach these two milestones. The debt payoff plan happen faster or slower than you thought it was going to happen?

Honestly, it happens. I say a little bit faster. One of the reasons why it was faster is because as a senior we're able to take pre call and make a little bit of extra money. So, you know, if there's extra calls to be had, I always, and I always Am picking them up. So I'm making a good amount of extra money on the side so far this year. Probably up to about 8,000, almost $10,000. So that's definitely been part of the.

Reason why it's pretty awesome. All right, so you've done more though than just throw extra income at debt. You've also built some wealth along the way. Tell us about your investing plan. How you guys get this money that you've built, this quarter Million dollar net worth.

Yeah, so I have a lot of friends who like to go on the stock market and look for all these different individual stocks and they're always doing day trading. But unfortunately that's not really what I've been doing. Nothing really that exciting, to be honest with you. The investment vehicles we've been using have been our Roth IRAs, which we both always maximize. Our 403 or 401 respectively, that we also try to maximize, although that's certainly more difficult with a resident salary. And then we actually took advantage of the I bond savings rate this year and put away $20,000 for that. So for right now, just kind of long term investments, I mostly invest in VT Sachs. And then once we have more money in the future, then we'll look at other investment strategies.

Well, that's super boring, but amazingly effective.

Thank you.

Congratulations on that. That's pretty awesome. Wow. To be able to come out of residency not only debt free, but with substantial wealth being built. Have you given thought to long term, you know, investing goals where you might be trying to go with money in your lives? I mean, do you have plans for families or cutting back or fire or anything like that?

It's funny you should mention fire. I mean, it's definitely something that I've always thought about, but I think something that's kind of been a cornerstone to not just my kind of financial journey, but just life in general has been. You know, I find that these topics are actually just very, very interesting to me. I actually have a passion for investing, I have a passion for saving. So I don't think I'm ever going to stop. I also don't foresee myself ever really stopping to work also. That's probably pretty easy to say now that, you know, I haven't started my attending ship yet. But yeah, I think one of the big things for me that I do plan on utilizing to make a lot of wealth and one of the cornerstones of my financial interest is actually property management. So it's something I've danced around with. I've talked to different Property management groups, but obviously don't have the capital yet. But my wife will be a hospitalist next year, so we're going to start exploring that.

So maybe some, you know, real estate empire in your future or something like that.

That's the plan.

Cool. Well, are you particularly debt averse? Were the student loans bothering you or did it just seem like a natural place to invest some of your money paying down your debt?

That's also a great question. So I know a lot of people, especially when they have debt in the hundreds of thousands of dollars or if they're planning on taking advantage of pslf, then fine, don't pay it off. You have no reason to do so. But in terms of my mentality for that as well, I'm a pretty big believer in Ramsey. So I don't believe in having debt. Obviously, if you can find something that has a lower interest and you can maybe justify that. Sure. But I've never been comfortable with the idea of debt. I've also never really had a reason to kind of have that debt. So it just made sense. And I feel a lot better and I sleep a lot better at night.

I found something to be true. And you're maybe one of the most perfect examples of it. People who become wealthy not only pay off their debt, but invest money, you know, they tend to do both. And you know, it's not that they're super anti debt or whatever, but they are just, you know, they see it as, here's a way I can build my net worth by paying down debt, and of course I'm going to do that. And here's another way I can build net worth by investing. And so of course I'm going to do that. And the rich people I've met tend to do both, you know, and you're a good example of that.

Thank you.

Well, let's go back to somebody that's coming out of med school, they owe some money, maybe they really did a good job like you did, and they don't know that much. Maybe they owe 100, 150, 200,000 between the two of them or whatever, they want to do what you did. They want to knock that debt out. They want to start building wealth. Not when they're attendings, but in residency, in fellowship. What advice do you have for that person?

So I think the first thing is, I think it's awesome when residents especially are able to have those financial goals and they're able to save that much money. Something I was able to appreciate, especially during residency, is that a Lot of people in medicine, they have a lot of understanding of things related to clinical medicine. But in terms of finance, there seems to be a really big dearth there. So that would be my first thing. First thing is good thing for you for being able to kind of explore these things and educate yourself. But then in terms of things to do during residency or even fellowship, I think it really depends on what your overall financial plan is. So for myself and my wife right now, we do have a good chunk of change in the bank right now that's kind of just idling there, and it hurts me every day to see it there not gaining some better interest. But we are planning on buying hopefully a house sometime soon. So that's one of the reasons why we're kind of keeping it there. Kind of dancing around with the idea of CDARs, not really doing anything too exciting. But if you have very different goals and if you're really starting to see more of that attending type of salary, then I think it's really imperative that you explore all the different avenues, all the different financial vehicles that are available to you, find one that you're really passionate about, one that you really think you can kind of go forward with, and then just really fully embrace it. So I'd say my overall point is just keep doing what you're doing, keep being smart, keep educating yourself, and the rest will just take some time.

Sounds like you guys are pretty much on the same page when it comes to finances. What do you think was the biggest disagreement you had about money?

That's a great question. I think the biggest thing that we differed for in terms of money is so one, we do always agree in terms of saving, but in terms of overall scope and scale, I think she was envisioning a more, I guess, for lack of a better word, simple life. But I, as you kind of mentioned, really want to start exploring, getting involved with property management and starting small, but then really, really expanding that scope. So she's starting to warm up to the idea and she's actually starting to really get interested in kind of these more involved avenues. But I say that would be the biggest point of disagreement so far.

Awesome. Well, congratulations to you, Edgar. You've accomplished not one, but two important milestones without ever finishing your training. So you, you deserve a well deserved pat on the back and congratulations and thank you so much for coming on the podcast to inspire others to do the same.

Thanks so much, Dr. Dalla.

All right. I hope you enjoyed that. It gives a good demonstration of what is possible. Right. I'm Always talking to docs and they're like, oh, can't do that. I've got this expense, or I've got that expense, or I've got this expense. Well, the truth is there's people out there who are living on a whole lot less money than you, who are doing more to earn money. And when they do that and have these massive saving rates, incredible financial things can be accomplished, right? Student loans can be paid off, wealth can be built down payments can be saved up. You can start that real estate empire you want, whatever it is that you want to do with your life financially, it is possible. It's out there. Yes, you probably have to spend a little less than maybe you could. Maybe you got to work a little harder than you could. But the truth is, if you have both financial discipline like this couple clearly has, and you combine that with financial literacy, it's like a superpower. You start looking around going, I can do things that nobody else I know can do. And that is an option for you if you will learn this stuff and apply it in your life. You know, I had a conversation with them after we stopped recording about how wealthy they're going to be and how much trouble they're going to have trying to figure out what to spend their money on or how to give it away. Because you will do one of those things, you know, whether you give it away during your life or afterward. If you are one of these people who's good at saving, good at investing, financially literate from the beginning of your career, and you like working, you're going to have more money than you need and you're going to have some challenges in that regard. There's five money activities, right? There's earning, saving, investing, spending and giving. And the trick in life is to get good at all five of them. It's not as easy as it might sound. Most people obviously struggle with earning and saving, but even those of us who don't. You know what? The other activities aren't necessarily all that easy either. Do you ever find yourself wishing there was somewhere to go to ask your finance, insurance or investing questions? The White Coat investor community is a great place to turn. We have a thriving community across all of our social, Facebook, Twitter, Instagram, Reddit and our WCI forum. We have been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other white coat investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this and the White Coat Investor can help. All right. It's been great being with you today. We've got the White Coat Investor podcast dropping on Thursday. We'll have another Milestones podcast next Monday. Until then, keep your head up, shoulders back. You've got this and we can help. We'll see you next time.

The hosts of the White Code Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is free 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.