MtoM #113 - Paid Off Student Loans and Bought a Car With Cash

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 113. Paid off student loans and bought a car with cash. Love what you hear on the podcast. Looking for more great White Coat Investor content? Head over to our YouTube channel where you can watch video recordings of our podcast, short snippets of financial tips explained succinctly by me and others, and deep dives into topics for more in depth learning. You can even learn all about real estate with webinars from our real estate partners. Check out all this and more@YouTube.com TheWhiteCoatinVestor. You can do this and the White Coat Investor can help. All right, welcome back to the podcast. Hope you are enjoying it. I enjoy making it. I've been looking forward to being with you again for the last couple of days while I was in the er and you know, sometimes it's easier to stay in my chair and work than it is to run around the ER all crazy, taking care of people. I'm not going to lie. But I do enjoy doing this for you and hope that it's beneficial to you. Today we have a great interview. We're going to do that first and then I'm going to talk for a little bit. Those of you watching this on YouTube can see what I'm going to talk about. I'm going to talk about a book that was put out by my friend Mike Piper. He's been a speaker twice at WC Icons. I cannot praise Mike enough for what he does. And we're going to talk about his latest book, More Than Enough after this interview. But first, we got a double financial goal. Financial milestone interview. We're going to talk with the doc who has done a couple of things, so let's get him on the show. Our guest today on the Milestones to Millionaire podcast is Naveen. Welcome to the podcast.

Thank you for having me.

You have hit two milestones. Tell us what they are.

I paid off all my student loans and I bought a car with cash.

All right, which one are you most proud of?

I think the loans is probably I'm most proud of since the amount was 411,000.

Wow. $411,000 in student loans. And how long did it take you to pay that off?

Three and a half years after fellowship.

Three and a half years. And what do you do for a living?

I'm a neurologist in Texas Neurology.

And over those three and a half years, what was your Average income.

So when I took my first job, I was about 240k starting salary. And then I'd done some Locums work beforehand. Then Covid hit and my group actually asked me to take somewhat of a pay cut. So I kind of negotiated doing some Locums work in there to increase income and then also negotiate early partnership. And so that was an expense, but also a helped with increasing income as well. So total income, like for example, when I started in 2019, my average salary was 240. And then now as a partner combined with my wife, we made about 550 last year total.

That's really great. I bet you're working pretty hard to get that.

I am, yeah.

All right. Hey, I need to thank you too. I canceled the first time we're going to record this with you, and for two reasons. One, I didn't think that our podcast producer, Megan, was going to be able to to my house due to snow and ski traffic. But two, I just wanted to go skiing. It was like two and a half feet of snow that morning, so it was really an epic morning. So I should thank you for being so willing to reschedule this.

I totally, totally got it. Regarding the Midwest, I mean, I understand how much snow can impact a lot of things, but obviously you have to take advantage of it. I think you had mentioned a couple previous episodes there were droughts going on. So I think it was good for all, you know, good for everyone involved to have that.

Yeah, for sure. All right, well, you've done something pretty awesome. I mean, this is. This is a huge student loan, right? That's twice the average of what MD students are coming out with, on average, indebted MD students. So this is a big student loan. There's lots of people out there with student loans this size who are worried about it, who are like, this is going to hang over my head my whole career. And yet you took it in the corner and dropped an anvil on it. Despite being in a. In a specialty that a lot of people don't look at as. As a highly paid specialty. What advice do you have to somebody that wants to do what you've done?

It's. It is overwhelming. It was definitely overwhelming. And especially, you know, while I was in fellowship, just seeing all the interest rates and seeing all the amount I was paying interest and just. It just kept growing and growing and growing. But I think I took a unique approach to, I guess, my career in general. After fellowship, I did Locum's work out in rural Kentucky, and I took Advantage of just the higher rates that Locums physicians earns and also just for the extra experience. So I was able, I think I earned in three months, I earned about 100k. And I just took a lot of that to pay off student loans, pay off just other personal debt I had accumulated. And then when I joined my group In October of 19, just paid, you know, taking about 6k a month towards the student loans. And then Covid happened March 2020, and my interest rates went from, you know, a 2% variable down to 0.6%. So I took advantage of the low interest payments and just kept shoveling everything towards principal. And then slowly but surely, you know, principal kept going down. And in November 22, you know, while interest rates started rising again, I was like, all right, I have enough in savings. Let me just pay. Let me just pay all this off and then I'll just pay myself back over the next couple months. And yeah, it was hard. I mean, it was just a lot of commitment. We delayed a lot of things. But at the end of the day, my wife is very supportive of getting these loans taken care of, and we just wanted to be done with it.

When did you first refinance your loans?

So I first refinanced, I think it was about April of 2019, after I knew I wasn't going to do a PSLF job. So I refinanced with SoFi, took advantage of their $100 monthly payments and lower interest rate, went from like 7% from the government to I think it was like 4% at the time. And I refinanced again in the summer for up to like 3%. And then right before my job, I.

Got a 2% variable, and then that went down as low as 0.6%.

I had that for about two years. And then it started going back up. I think by the time I paid it off, it was all the way. It was already back up to like 3 or 4%.

Yeah. How did you feel in March of 2020 when everybody that still had federal student loans had their payments put on pause and their interest rate changed to zero percent?

You know, there's a little bit of that. Oh, man, I wish I was, you know, I wish I had taken an academic job and still had loans or still had, you know, or had a PLC qualifying job. But, you know, it bothered me maybe for a little bit, but at the end of the day, I knew I was in the right place career wise, and I knew that I love the job that I have, and I knew this was Going to be a temporary setback, but that didn't really bother me too much.

There's a lot of students out there, pre meds, medical students that they don't have any family help. Nobody's going to be paying for their undergrad, much less their medical school. And they know if they come out it's going to be 300, 400, 500 plus thousand dollars. What advice do you have for them? Do you think it's still the right thing, thing to do to go into medicine even though it's going to, you know, take years of training and a huge debt that's, you know, you're not even guaranteed to match into a residency. What advice would you give to someone that their only option was to run up a debt like you had?

You know, for someone. I didn't have family help either. You know, my parents are first generation immigrants and so you know, college was mostly what you know, we paid for loans and, or scholarships and then med school going to the Midwest was very expensive.

So.

But you know, if I had to do it all over again, I would have done it. I would have done it the exact same way. I would have done it the same way. And for me, you know, I, I chose neurology late in my career or late in my med school career. But you know, I'm super happy where I am. I mean, sure I, you know, like you said, traditionally neurologists don't make that much, but I've joined a group where we all do pretty well and it's like, like you said, live like Rosen for two to five years, have a plan and as long as you do that, it's, you know, you can conquer it. It's required a little bit of discipline, but I mean it's not, it's definitely doable.

You know, I often tell people, and I'm not sure they all believe me, I often tell people that the range of intra specialty incomes is more variable than the range of inter specialty incomes. And you're a good demonstration of that. I mean you're making well, more than the average on salary surveys for a neurologist. Were you surprised that you could make that much money as a neurologist? I was.

I mean when I was looking at jobs, you know, I was, I was looking at what would be the earning potential because you know, going into it, you know, I knew I would work really hard and I wanted to, you know, a just work really hard, serve the community, but at the same time obviously get compensated accordingly. And you know, with an academic job, I Was looking at, they, it was an RVU based model and they, that one, you know, had a decent option, opportunity to make, make some money. But at the same time going, looking at a private practice with, you know, buying after buying in and just kind of controlling what I want to do there was, I mean, I definitely make more than, I guess some of my friends in that work in different job, different jobs.

Now you grew up in Chicago and you're now practicing in Texas. You know, this is kind of the classic example of geographic arbitrage. You've gone from a high cost of living place to a lower cost of living place. You went from place with high taxes to low taxes, someplace with kind of a nasty medical legal climate to a very nice medical legal climate. Tell us about that decision and what effect you think it has had in your ability to pay off debt, build your net worth, et cetera.

You know, I had grown up in Chicago for my entire life and when I was looking at med school, when I was looking at residencies, I initially gone into the process saying I want to stay here. But you know, I, I wanted to go to a place where I would get good training and just get good experience so I could be a good doctor. And having, like you said, having seen what when I was looking for jobs, seeing the medical legal environment, the, you know, cost of living taxes, you know, all of those factored in. And I think the biggest thing for me really was my wife is from Texas and she didn't want to leave. So that decision was kind of made for me. But I think, but that being that side, I mean, for like you said, all the reasons that you mentioned, it's a good place to practice medicine and practice, focus on practicing medicine, not having to worry about do I have to order this many tests or order extra tests I don't think are necessary just to make sure that I cover all my bases.

All right, let's turn just for a second to this other milestone you hit. You paid cash for a car. What'd you buy?

I bought a 2022 RAV4 Hybrid. It came out to 42,000.

And how are you enjoying it?

It's great. I mean it was good at the time. Gas prices started coming down and everything, but I still love it. We need to upgrade anyway. We have an 11 month old daughter now, so I need an SUV anyway. So it worked itself out very cool.

So how did it feel to not buy it with a car loan?

It felt good just to have, just to give them a check and say, here you go. After I was almost done paying my loans off at that point. So I don't want to keep adding on debt. But, no, I felt very proud of myself to hand that check over and walk out with the car and not have anything else, no other strings attached to it.

Was the seller surprised, do you think? The fact that you didn't pay for.

It with credit, you know, I don't think they cared, to be honest. I think this is in a time where, oh, you don't want it? All right, I've got 20 other people lined up right behind you, so if you pay for it with cash or with a loan, doesn't really matter to me.

Yep, let's get it off the lot. Very cool. All right, well, congratulations to you on two very notable milestones, and congratulations to you on your personal and professional and financial success. You are en route to a great future. So thank you for what you're doing, and thank you for coming on the podcast to share it with others and inspire them to do the same.

Thank you for having me and thank you for all that you do. I've learned a lot from you and your blogs, your podcasts, everything. It's helped me tremendously.

It's our pleasure. All right. Hope that interview was helpful to you. I enjoyed it. I just love his optimism and his success, and it just feels like he's on his way. Not only has he crushed his student loans, but those habits that he developed doing that will lead him to be able to reach financial independence early. Paying off your student loans, the best kind of training wheels for reaching early financial independence. And he's becoming financially literate, obviously financially disciplined, working hard, and really just going to do great. It's pretty awesome. All right, as I mentioned earlier, let's talk about this book for a second. More Than Enough is from Mike Piper, subtitled a brief guide to the questions that arise after realizing you have more than you need. And this is by Mike Piper, cpa. If you don't know Mike, he is the brain behind the oblivious investor. When we founded obliviousinvestor.com. it's a blog. It's been around since, I don't know, like, 2007 maybe. Big inspiration to me to start the White coat investor in 2011. I've known Mike for a long time. Yes, he's a cpa, but essentially his entire job is writing that blog and writing books. And the only monetization off the blog is the books. And the books sell for, like, five bucks. I don't know what this one is. If I look it up on Amazon. Let's see what it's going for. This one is $4.99 on Kindle. The paperback's 15 bucks, but it's $5, so I'm not making any money. If you go out and buy this, I mean, we'll put an affiliate link in the show notes. Oh, we don't even have show notes for this because it's Milestones to Millionaire. I'm not gonna make a dime from this. I'm just telling you about Mike's great book. Mike is fantastic. He's totally understated. He's way too humble for his knowledge base. He's always a top rated speaker at wcicon. He speaks regularly at the Bogleheads conference as well. I think he's actually on the Bogleheads board. Now. This is a short book, like all of Mike's books. In fact, this is kind of long for Mike. This thing's like 129 pages of this. What is this? 7 by 5 book? 8 by 5, 9 by 5? I don't know, big print. So this is like, I don't know, two, three hours of reading is all it is. But if you are in this situation where you are already wealthy, you're still enjoying what you're doing, you're continuing to build wealth, and you're like, holy smokes, I've got an estate tax problem or there's no way I'm going to spend as much as I have. This is a book for you and it goes through a lot of interesting stuff. He starts with the non financial considerations is what he calls it. First chapter is, do you have more than enough? I guess there's a little bit of numbers in there. You got to know what you need to to know if you have more. And then how to allocate among the recipients, who's going to get it, what's going to go to charity, what's going to go to heirs, et cetera. And then an entire chapter. And I say an entire chapter, right? These chapters are like five pages or something. Talking with your kids or other heirs, why you need to talk to them. And I think that's an important thing to consider right up front when you're talking about this subject. Then part two is all about financial considerations. Giving and spending during your lifetime. Warm hands instead of cold hands. Learning to spend and give more. Which types of spending are best. And I think that's more about what brings most happiness as well as mental health care. He has a whole chapter on impactful charitable giving. How to select which charities to donate to, whether to make the gifts restricted or not, et cetera. Impactful Investing gets a section. He talks about maybe reassessing your asset allocation now that you are not so much investing for yourself. There's a section on trust, there's a short section on asset protection. Then he gets into part three. I mean, Mike is a cpa, right? So he's going to have a big section on taxes. And he talks about qualified charitable distributions, which is the best way for someone of RMD age to give to charity. Donating appreciated taxable assets, deduction, bunching donor advised funds, dealing with rothifying your accounts, talks about state estate taxes, and then gives some good lists to incorporate into your financial plan. And the final section is simply about finding assistance with attorneys, financial planners and tax preparers. Great book. You ought to check it out. Mike sent me a free copy. There's my disclosure to you. And I hope he sells a bazillion copies of them because this will help a lot of people. But you ought to check that out more than enough. If you were in that situation, think you might eventually be in that situation. Want to be in that situation. It's 4.99 on Kindle, right? I mean, you're going to spend more of your time time value of your time than you are on the book itself. You know, if I was giving Mike business advice, I'd tell him to charge more. But this is the way he does business and he has a reasonably good life and he's more than content with that and loves to help people. So there you go. Enjoy More than enough from Mike Piper. Love what you hear on the podcast. Looking for more great White Coat Investor content? Head over to our YouTube channel where you can watch video recordings of our podcast, short snippets of financial tips explained succinctly by me and others, and deep dives into topics for more in depth learning. You can even learn all about real estate with webinars from our real estate partners. Check out all this and more@YouTube.com thewhitecoatinvestor you can do this. And the White Coat Investor can help. All right, you can do this. Finances are not that hard. You've already won the game by virtue of your high income. You've done 90% of what you need to do already to be financially successful. Here at the White Coat Investor, we just help you do the other 10% to get the ball over the rest of the goal line. To borrow a sports analogy, it's not that hard. Many, many White Coat investors before you have done this. I don't care how bad your situation is. I don't care if your income and your assets just got cut in half from a divorce. I don't care if you just failed to match the second time. I don't care if you owe $1.3 million in student loans. You can improve your financial life. There is hope and we can give you the tools. We can build the community around you that can inspire you to do the same. If you would like to come and share your milestone, I don't care what the milestone is. Getting back to broke, you know, paying off a $3,000 beater loan, whatever it is, apply whitecoatinvestor.com Milestones will bring you on the podcast. Your situation will inspire somebody else out there trying to do the same. Thank you for your time. Thank you for trusting us. We know you have a choice when it comes to your podcast listening and we're glad you fly with us. See you next time.

The hosts of the White Coat 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.