MtoM #108 - Hospitalist Pays off $350,000 in 18 months

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

This is Milestones to Millionaire podcast number 108. Hospitalist pays off $350,000 in 18 months. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do for a fraction of the price of hiring a professional financial planner. The Fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the White Coat Investor can help. All right, we have got a 2 doc couple, 1 attending, 1 a resident that we're going to bring on the podcast here with a pretty impressive story that I think you're going to like. We have two guests on today's Milestone to millionaires podcast. Dhanish and Khadija, welcome to the podcast.

Thank you for having us.

All right, before we get into this too far, let's have you tell the audience a little bit about you. What do you do for a living? How far are you out of school and training? And what part of the country do you live in?

My name is Khadija. I'm a hospitalist. I've been working for almost one and.

A half years and my name is Danish. I'm a third year psychiatry resident, still in training and we live in New York.

Okay, so you're out on the east coast. Expensive area or is this like upstate New York?

No, no, we live in Manhattan. So it's pretty expensive out here.

Manhattan, it's expensive. Okay, so, all right, hospitalist, psych, resident, expensive, high cost of living area. And tell us what milestone you have recently accomplished.

Well, right now we just went back to broke. Luckily for me, I'm still a resident, but I went to the Caribbean for medical school. My tuition wasn't that much. I think total was about 100k. But I was lucky and fortunate enough to have my dad pay for all of it. So I didn't have any loans. How are my wife over here? She went to a U.S. med school.

You can talk more about that. So I, like after med school and residency, I went the traditional route. So I ended up with 350k in debt. So our goal, right, when we, after we got married was to make sure we pay off my debt first, my loan debt, and then after that we could focus on other expenses and other goals.

So you're a year and a half out. You owed over $350,000 in student loans. You're working as a hospitalist and that's now gone?

Yes.

Is that right?

That's right. That's right.

Where did it go? How did you pay off $350,000 in a year and a half as a hospitalist in New York City?

Well, we got lucky with the pandemic. First of all, all the loans were under the government loans, so they're all paused. Interest was paused, so just that interest for the last three years. If you think about it, I calculated it'd be about $60,000 of the interest just on interest accumulated on the loans. We were very aggressive. I have a place in Manhattan, luckily.

So the rent, you think this is incredibly aggressive. This is super impressive. All right, so how'd you do it?

So basically for housing costs, I have an apartment, a one bedroom apartment in the city which is fully paid off already. My dad helped me purchase it. And so our living costs have been pretty low. Rent has been, you know, very low. So every dollar we had, basically we've been either it's on food or gas or our student loans.

Okay.

So we've been, you know, I have my residency income, which is not much, is about 80k. She makes about 220,000. So the last year and a half we've been like just putting everything in that we can. I had a few stocks I sold, you know, Tesla, I made like about 60,000 from it. So I sold that, that, that I put towards it. So we've just been very aggressive. Like the only thing in my mind was just to pay off these loans so we can start from, you know, scratch.

Okay, so a little bit of help from dad with both living expenses and Sounds like you kind of brought a little bit of money into the marriage. This is a little bit like Katie and I, right? She brought in all the assets, I brought in all the debt. We didn't have very many assets and we didn't have very much debt, but, you know, that's where it came from. Okay, so that helped a little bit. That at least makes the number. Right? Because I look at this initially and I'm like, these numbers don't even work. Yeah, but still, this is pretty cool you guys were making together, you know, 300ish.

Yes.

And obviously in Manhattan you are paying federal, state, local income taxes on 300,000. That's. That's substantial amount of money in New York City. And sounds like pretty much everything else went to these loans to knock them out in a year and a half. That's pretty cool. So how does it feel to be out of debt so quickly? I mean, this is. This wasn't an average amount of debt. The average people coming out of med school is like 200. You had 350 and to be done with it in a year and a half. How does that feel?

It feels surreal. I haven't paid it off fully yet because the interest is still paused. Right. So I have it in the money in a high yield savings account right now. So I can pay it off anytime. So I don't think it'll. I mean, kind of feels like it's paid off, right?

It does feel like it's paid off. I have the money, but it's just once I see that actual account go to zero, it would be nice. That would make me feel more amazing. But right now it is nice to know that, like, I have the money, I can pay it off. So. Just feels amazing because a lot of people don't achieve this in a shorter period of time.

Yeah, for sure. So, you know, come June, July, August, when whenever they decide they're done with this 0% thing, you're just going transfer the money over is your plan, huh?

Yep.

It's pretty cool. And in the meantime, you're making, you know, you know, 4% or so on it. You know, that might be worth a few thousand dollars more. So that's always fun.

Yep.

Okay, so take me back, right? You guys, you know, you graduate from residency, Khadija, and you're like, you guys talk and you're like, okay, we're going to pay this all off in like a year and a half. Tell me about this conversation. How'd this go?

So it wasn't like that where we were, like, we kind of planned it out. It was going to be a year and a half. It was kind of like, okay, we're going to pay off these loans as soon as possible. But when I, like he was a resident in New York City, we were first long distance. So we, like when I moved here, it was kind of like we had to make sure we started managing our money together. And so that's where we kind of decided that most of our money is going to go into an account, and then most of it will be allocated for our loans. And then we just take out a small amount for living expenses and then also just dining out. And still we still get to enjoy the best of both worlds, I think. So we still were able to go on a few nice trips and all those things. So we just kind of were allocating most of it for our loans, which made sure. I think we had to just make sure we were responsible.

How long have you been married?

Three years.

Three years. Okay, so Danish, when you. We're first talking about getting married, at what point did she tell you she owed $350,000 in student loans?

I think she told me right away when she told because I didn't have any loans. But at that point when I was talking to her, I was actually applying for residency. I had trouble matching into residency. I came from a Caribbean school. You know, I had average scores.

Right.

So it was very difficult for me to get residency. She was already in residency, so she was bringing something. She was bringing loans, but she was also, you know, already working.

Right.

I, on the other hand, was just, you know, doing odd jobs, doing construction, random jobs that don't really require an education.

Okay. How did. How did it feel to reveal that bit of financial information, Khadija? Do you remember? I mean, I know it's been a.

While, but I felt a little bit nervous. But for me, it was kind of like something that I feel like in a relationship you have to kind of be honest and transparent. So I kind of told him early on, because if there is some people that are, like, not okay with it, then it's from the start you kind of know if they're okay with it and if it's going to work further. So for me, it was nice to just be able to, like, tell him and then see whether or not he would actually accept that as something that came with me alone.

Yeah, yeah. I mean, well, this is part of our complex financial lives as doctors, right?

Yes.

We come with this high income or high income potential in the case for those of us who get married before we're attendings. And we often come with a big old fat amount of debt, you know, and each of us, at some point in a serious relationship, you know, we gotta trot out that fact and set it on the table in front of us. Guess What? I owe $200,000 or $400,000 in student loans. And that's part of me. If you like me, that's what's coming with me, you know, And I think, I think that makes that worries a lot of people, I think to reveal that sort of thing. And so I'm always curious how people deal with it. All right, so what now? I mean, you guys are like incredible savers, right? Are you going to start spending a little bit more money now? I assume at some point, you know, dad doesn't help so much with the, you know, the living expenses and expects you to be a little more on your own, you know, what are your plans now?

So going forward, I still have a year and a half more of residency to finish. I might do a fellowship for another year. So the plan is to buy a house because we just had a three month old baby.

Congratulations.

Thank you. In Manhattan, one bedroom's not enough space. Maybe for a single guy it was good enough, but now that I have a family, it's. So we're gonna probably save for a down payment for a house and we're not sure where we'll move to next, but maybe we'll just do some. What's that term you guys use, Geographic arbitrage? Where you like, move to a place where they pay doctors more because New York City just does not pay that much for physicians, unfortunately.

So you're planning to leave the city after you finish training then?

Oh, for sure, for sure. So let's see, that's the plan. But it's weird. It doesn't really feel like we saved a lot because whatever we wanted to buy, I mean, we went to the Maldives on vacation last year. We fly once a month somewhere. I mean, we don't like, stay at like super fancy five star resorts, you know, do like a four star hotel or three star, you know, hotel. But I think we've whatever we need to get. We, you know, we've been spending. So like the extra money that was accumulating was more than we really needed.

You never felt deprived?

Never felt deprived?

Yeah, never felt deprived.

Did it turn out to be easier or harder than you thought it would be at the beginning?

I think it was a little bit just easier because you would think that with like saving up all that money, you wouldn't be able to do all these things, like still enjoy the luxury of going out to eat at nice restaurants in the city, going out on vacation and like traveling. But we were still able to save a majority of our money and then still travel, still dine out and still like enjoy like a good lifestyle. So we had a good balance even while saving so much money.

Yeah. All right, what advice do you have for somebody that's just like you. Maybe it's someone that's, you know, coming out of Residency and owes $350,000, wondering if they're ever going to get paid off. Maybe it's somebody that's thinking about marrying a doctor that owes $350,000. What advice do you have for somebody like you? A few years ago, I would say.

To just live like a resident. That's the main thing. Like, if you're coming out of training, don't like, increase your expenses. Don't buy like a brand new Mercedes. You know, I have a Nissan Max. I've been driving. It's fully paid off. It's a 2016. It's doing fine. So, I mean, you know, I could buy a nicer car, but then that would deter me from paying off my loans and just like, you know, keep, keep your eyes on the price. Like if you want to pay off loans or if you have a goal, just stick to it and don't try to, you know, do too many things at once.

Yeah, I think the main thing is that you should just start off the relationship by discussing what's important to you. And then if go like your goal is to pay off your loans, then make sure that you're allocating and come up with a plan, kind of that majority of your money is going to go towards loans, and then you won't be able to have all the luxuries where you won't get a Mercedes Benz right out of residency. So it's kind of like making sure you discuss expectations and then come up with a plan together and that you agree with the plan. And I think that would make that way you can actually pay off and reach your goals.

Awesome. Well, Danish and Khadija, you have done fantastic work. I'm super proud of you. You should be proud of yourselves. You really have done something very remarkable that a lot of white coat investors would like to do. And I appreciate you coming on the podcast to share your story, to inspire others to do the same.

Thank you for having us.

All right. That was cool. It was cool. Not only because they're in New York City. Right? Cause I'm always getting these emails. Well, what you say works if you live in Indianapolis or if you work or if you live in Georgia or New Mexico, but it would never work in the Bay Area. It would never work in Manhattan. Well, here's somebody living in Manhattan. One of them's not even out of residency yet. And they paid off $350,000 in student loans. Right. This is not an orthopedic surgeon. This is a hospitalist. She makes $220,000 a year. They say they are still eating out, say they're still going on trips, and they are, but they're clearly being very frugal about them. Because if you do the math, even with a little bit of help from family, which was not insignificant, but even with a little bit of help from family, almost everything they made went toward these loans. That's the only way the math works out. And so super impressive for them to be that disciplined. But what impressed me the most about it was that they are on exactly the same page, right? They had the same plan, they both worked together, they both bought into it. And it's really powerful when a couple is working together toward the same financial goals. You know, all their income goes in there. You know, he didn't look at this as her debt. It was our debt from the moment they got married and they said, what can we do to get rid of it? And they took it in the corner and they dropped an anvil on it. And I think that's pretty impressive. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do. For a fraction of the price of hiring a professional financial planner, the Fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the white coat investor can help. By the way, this podcast is driven by you, and we want to share your stories and use them to inspire others. I don't care what your story is. If you have accomplished any sort of financial milestone, we will celebrate it with you. That might be saving up 10 grand for your kid to go to college. That might be getting back to where you were before the divorce. As far as net worth goes, it might be negotiating rent discounts. Who knows what it might be? It might be boosting your passive income by a certain amount. I don't care. We'll celebrate it with you. It doesn't have to be a traditional. I paid off my student loans. It doesn't have to be a, you know, I hit millionaire status. It can be anything we've had. You know what we haven't had? We've never had someone come on and talk about paying off their mortgage. You know, 108 episodes we've done, we have yet to do one with someone that paid off their mortgage. So either nobody's ever paying off their mortgages out there or they don't think it's worth talking about on the podcast. So let's have somebody that's paid off their mortgage come on and talk about it. You can apply whatever it might be, whitecoatinvestor.com and we would love to share that story with the listeners. All right, well, this is dropping March 6th. We're back from the conference. I can't tell you anything about it because I haven't gone yet. We're recording this on the day before Valentine's Day, but we'll be back soon to tell you all about the conference in Phoenix. I'm sure we had a great time. If it was anything like last year, I know we had a great time and hope to meet you. Many of you there, keep your head up, shoulders back. You've got this and we can help. We'll see you next time on the Milestones to Millionaire podcast.

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.