MtoM #110 - New York Physician Pays Off Student Loans

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 110, New York physician pays Off Student Loans. This is the podcast where we feature you, you and your accomplishments, you and your milestones. And we use what you've done to to inspire your peers and colleagues and your trainees to do the same so that we can all lift each other and be financially successful. If you'd like to be on this podcast, we'd like to have you. You sign up@whitecoatinvestor.com Milestones. There's a little application to fill out, but this is not exactly a high stress situation. We don't even record these interviews live, so if you would like to share what you've accomplished, we would like to do so as well. Please apply.

Getting quality disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state or health status. And one in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart. If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this, and the white code investor can help.

All right, we've got a great guest on the podcast today. Let's bring him on. Our guest today on the Milestones to Millionaire podcast is Vinny. Welcome to the podcast.

Thank you. Thanks so much for having me. Excited to be here.

All right, I just got to know you for a few minutes before we started recording, but these guys don't know you at all. So tell them about what your specialty is, how far you are out of tr, what part of the country you live in.

Yeah, sure. So I am a ER doc. I'm about 5 1/2 years out of training now and I live in a suburb of New York City, so relatively high cost of living area. My house is about 30 minutes north of the city, but I do work in New York City.

Okay, so somebody living and working in a high cost of living area and tell us the milestone you have reached recently.

Yeah, so we paid off a total of $370,000 worth of our student loans.

Awesome. $370,000. Do you have any idea how much hope that gives other people who are swimming around in that much student loans?

It is possible, that's for sure.

Yeah. Now you said we. Who's we? Is there somebody else involved here?

Yeah. So my wife is a. She's a pediatrician. She finished training two years after me. So that was a combined student loan burden from the both of us.

Okay. And she working full time as well.

So she's currently working part time. Since she finished training, she's had two maternity leaves, mostly part time work, and was full time for a very small portion of that.

Okay. So, you know, I kind of described this as you followed the program, right? There's two of you, you had a whole bunch of student loans, you worked hard, you put a bunch of money toward them, you knocked them out. In your case, and about five years out of training, in her case, about three years out of training, did you feel like this was the plan or did you stumble into this? How did you get into this pathway?

I guess kind of both. When I finished training, I didn't know much about finances, but I knew I had student loans and I knew I had to pay them back. So the first step was figuring out a plan to pay them back. And I kind of stumbled onto your website and refinance my student loans with one of your affiliate, you know, your affiliate banks. And when I refinance, I asked them, you know, what were the terms that I could pick from? And they said five, seven or 10 years. And I picked the five years because, you know, we should be trying to pay them back within five years. So that's how I first refinanced my student loans. And then my wife finished training in 2019. And just like me, she also was not going for public service loan forgiveness. So I knew we had to refinance hers. So we did the same process with her refinance hers, and obviously we paid hers off a little bit more aggressively than mine. But I kind of stumbled onto your website through that, and I've been a follower ever since.

Okay, so you two refinance your student loans and then the pandemic rolls around. Right now it's March 2020. President Trump gets up there, declares everything an emergency, and says your student loans are going to zero percent and you don't even have to make. Did you feel like you'd been hosed at that point? How did that feel?

Well, I had to look back at my statement because I couldn't remember the exact date that I Refinanced my wife's student loans, but it was in February of 2020.

Oh.

So it was literally right before the student loan interest freeze. And I tried not to think about it. It just wasn't great luck. But during COVID a lot of people lost either part of their income or part of their salary. And obviously, working in New York City, I didn't get asked to stay home for any portion of that year. Yeah, my salary didn't change at all. And we weren't going anywhere. And one of the things that I feel like we do still spend a decent amount of money on is travel, and we obviously weren't traveling anywhere. So that kind of lit a little bit of a few onto the fire for paying back these loans as we had a lot of extra money lying around that we weren't really spending it on.

Do you remember what rates you refinanced into?

Yeah, mine was a five year, 1.95%.

Okay.

So that one, when I refinanced in 2017, I just let that roll and just paid every month for those five years. And my wife was a five year at around like three or three and a half percent, something like that.

Okay. So it's not like you had terrible rates. You know, I mean, 1.9% is not all that different from 0%.

Yeah.

Yeah. Very cool. So how long did it take you to get Covid the first time working in ER in New York City in 2020?

You know, it's funny, it's a story that I'll be able to tell my daughter for the rest of my life is that I. I worked in New York City during COVID never got it once. And then in 20. March of 2020. No, in January of 2022. Excuse me. She brought Covid home from school and gave us our entire.

So it's exactly what happened in our house. I didn't get it till 2022, and it was brought home by teenagers, so I had it twice in 2022 and never before then. So very, very interesting. Okay, well, let's talk about your income. I guess pre and post her graduation from residency. That's probably the big change in your household income, I would assume, and how you decided you could dedicate enough of it to paying off loans despite living in a high cost of living area to be done in five years.

Yeah. So for the household income when she was still in residency, I think our combined salary was somewhere around 325. And like I said, after she graduated, she was maternity for six months. Two different Times, and she's been basically part time since then as a pediatrician. So, you know, our salary's gone up. With both of us as attendings now, I think our combined is roughly 425 to 450. And, you know, one of the things I think helped us be able to pay back a lot of those loans was we bought a house and we started having a family. And although it's in a high cost of living area, you know, there's certainly more expensive areas to live and less even within that area outside New York City. So, you know, we bought a modest home, we have a modest mortgage. We live in a, a very working class neighborhood. Cops, firemen, contractors and whatnot. And so the keeping up with the Joneses has not been an issue for us, which I think has been helpful. And, you know, like you said, money is fungible. So if you have certain amount of money you can use to pay off your debt each month, if your mortgage is, you know, 1,000 instead of 2,000 or if it's less than, you know, it could be, then you're just funneling more of that money towards your student loans.

Yeah, it's nice of you to use those low numbers while talking about the New York City area mortgages. All right, so was there something else? Was there a windfall inheritance? One of you a trust fund baby, you sell some house for some excessive amount, or was this all just put your nose to the grindstone, See patients make money, carve a portion out and send it to the lender.

Yeah, basically the latter. Yeah, exactly. No windfalls, haven't sold anything. You know, I do come from a household where I have parents who were good with money. They were good savers. And I think those principles, you know, definitely are instilled in me. My wife also isn't a big spender. That certainly helps. You know, it's kind of like you said, you. You can have anything you want, but you can't have everything you want. So we prioritize what's important to us. Spending time with family and friends and definitely vacations and sitting on a beach with our kids. I think that's a priority for us. And then everything else, we kind of live within reason. I don't feel like we've deprived ourself of anything, but, yeah, basically just working, making money, saving a portion of it and, you know, putting it towards your debts.

Where's your favorite beach?

Oh, it's a great question. We, we live obviously in New York, so we spend a lot of time in the Winter in Florida. So a lot of the. The Gulf coast coast, Florida beaches are some of our favorites.

Very cool. All right, so I mean, you recently sent in a last payment and you looked at that website and it says $0. How did that feel?

Yeah, it was great. It was a really, really good feeling. Feels like a long journey. And the weight lifted off of your shoulders is definitely a palpable thing. And for us, one of our priorities was paying off my wife's student loans in particular, because once we started a family, I never wanted her to feel like she had to go to work in order to pay back these loans. You know, I didn't know if she'd want to be full time, part time or stay at home, but I wanted to make sure she would have the option of any of those three. So we both made it a point to aggressively pay back hers, which is why we pay back hers, actually, before mine even finished on that five year plan. But. And now she has that freedom where if she wants to cut back, she can cut back. If she wants to work more, she can work more. You know, whatever fits our family life. Yeah.

So did it turn out to be easier or harder than you thought it was going to be when you started?

Honestly, I feel like it was easier than I thought it was going to be. When you're in residency, you're making $60,000 a year, and then you become an attending and you 4x your salary, it's a huge increase. And sure, we definitely increased our lifestyle somewhat, but as long as you don't explode that lifestyle, there's a huge difference in the amount of salary you have that you can put towards building wealth, whether it be saving for a down payment for a house or paying off your loans or investing. And like I said, if we lived in a bigger house that was more expensive and kind of got onto the merry go round of keeping up with the Joneses, I think it'd be a lot harder to be able to save and pay down all those debts in such a short period of time. But it's been easier than I honestly thought.

Were you able to save anything for retirement during that time period?

Yeah. So ever since I remember in residency, like I said, I didn't know much. And then once I became an attending, I started listening to the White Coat Investor. And like most people, I started an attending job in July. So when I got all of my attending benefits, I saw that I had a retirement plan and I said, I'm not really sure what I'm supposed to be doing, but I know that I should probably put as much money as I can into this retirement plan over the next six months. So I maxed out my 403B over the last six months of the year and you know, that's been maxed out every year since then. And while we were paying back our student loans, we did invest somewhat on the side just because I felt like I wanted to do something and not just put everything towards loans. And then once the loans were paid back then, you know, all of a sudden now you have a huge, you know, cash flow increase that we've been throwing much more money at investing since the loans were paid back.

So you kind of did it all. You were able to increase your lifestyle a little bit. You were able to get into a house even in a high cost of living area. You were able to pay off your student loans and you were able to save for retirement. It's not impossible it turns out, huh?

No, it's certainly not impossible. And like I said, you can, you can have anything. I feel like we haven't deprived ourselves of any sort of vacation or trip or weekend getaway, but you know, you have to be within reason on the other aspects of your life. You can't have everything and everything.

Yeah. So what's next for you financially? What's your next financial goal to work on?

I guess next up probably the million dollar net worth. I think we're close. I think when I calculated at the beginning of the year we were somewhere in the 800s. So just continue plugging away. Everything's pretty much automated so I don't really have to do much. The 403 is automated and then my investments into the brokerage account is also automated. So check back in on time to time and see how the accounts look.

Well, there's a bunch of senior EM residents out there who are feeling like they don't know anything about finances right now who owe two or three or $400,000 in student loans. What advice do you have for them?

I think the most important thing is to have a plan, you know, whether you're going for public service loan forgiveness or not as important. And if you're not. So refinance as soon as possible as often as you can and pay them back as soon as you could. And not inflating your lifestyle dramatically will help you to pay those back on, you know, sooner rather than later. So have a plan, stick to it. And keep in mind that once those loans are paying back, you can probably even increase your lifestyle a little bit more. So it's just a temporary five year period. Pay back your loans, and then you'll have even more opportunities after those are paid off.

Well, awesome, Vinny. Congratulations to you and your wife. You have pulled off a great feat. It is the best practice I know of for reaching early financial independence. If you can get your student loans paid off in five years, you can certainly reach financial independence within half a career. And so I congratulate you and thank you for coming on the podcast to inspire others to do the same.

Thank you so much for having me. And also thank you for all the work you do. It's appreciated very much by myself and I'm sure all of our listeners.

You're very welcome. Thank you.

All right.

I hope you enjoyed that interview. It's always good to talk to a fellow emergency physician. It feels very comfortable talking to Vinnie. I'm like, wow, if I was in the er, this is a guy I'd love to have taken care of me. But I love that it's somebody in a high cost of living area, because I get told all the time, well, this works just fine if you're l in small town Indiana, but you can't do it if you live in the Bay Area. You can't do it if you work in New York City because you're paying all these taxes and everything's so expensive. Well, I think Vinnie's shown that, yes, maybe you don't do it in a year and a half, but you can still pay those student loans off in less than five years, three years in the case of his wife. And so it very much is possible. Does it take a little bit of knowledge? Yes. Does it take some discipline? Absolutely. Does it take a plan? Yes, it does. But you can pay off those student loans. I mean, it took me four years to pay for my education. Four years of commitment to the military, Right where I was working very hard. As I look back and think about what's actually considered full time in emergency medicine, I was working about 1.3 FTEs in the military, and that's before I got deployed to a foreign country. And they're paying me about $120,000 a year. And so it doesn't take a genius to figure out that maybe I didn't come out ahead, financially speaking, by having the military pay for my medical school. But it took me four years of time to pay that back, just like it takes most people who pay for their medical school with loans. 3, 4, 5 years of time to pay for medical school. And once you're done with that you're free. You can work less, you can hit fi early, you can pursue other careers or side gigs. You've got a whole lot of financial freedom that you can do. Whether you still love medicine, you can practice it any way you want to. And I can promise you this medicine is a lot more fun to practice when you don't have to practice it. It's a real pleasure for me these days to go in and see my friends at the er, sit down with a few people, help them for a few hours, and then go home for my shift knowing I don't have to go back for quite a few days in for my next shift. And I just find it immensely satisfying to be able to practice the way I prefer to practice all day shifts, six shifts a month. It's the amount of medicine that I find fun and I want that for all of you as well.

Getting quality disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state or health status, and one in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart. If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com insurance and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this and the White Coat Investor can help.

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.