MtoM #14 - Optometrist Pays off 229K in 26 Months

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 Milestones to Millionaire podcast number 14. Optometrist pays off $229,000 in 26 months. If you are finding our podcast informative and helpful, check out our website. Since 2011, we've been working hard to provide valuable personal finance and investing information. Through thousands of blog posts written by an array of authors, you can find information on how to manage your student loans, fix and avoid common financial mistakes, understand your retirement accounts, optimize your investments, find professional help at a fair price, get started investing in real estate, and so much more, all at no cost to you. You can find out more about the courses we offer, the conferences we put on, the newsletters we provide, and interact with other WCI readers through our online forum. Head on over to whitecoatinvestor.com to start learning today. You can do this, and White Coat Investor can help. This is the Milestones to Millionaire podcast here. This podcast is all about you and your accomplishments and using those financial milestones, those accomplishments, those successes to inspire other white Coat investors to do the same. Well, I don't care what your accomplishment is. Maybe it's getting back to broken. Maybe it's getting net worth of 100,000 or a million or 10 million, or becoming financially independent. Maybe it's paying off some debt, getting public service loan forgiveness, or paying off your student loans or paying off a mortgage. Whatever it is, we want to celebrate it with you. We want to bring you on the podcast and use your story. So today we have a pretty unique story. An optometrist. Let's get him on the line. All right, now we have with us Justin Jackman. Justin, welcome to the White Coat Investor Podcast.

Thank you. Glad to be here. It's an honor.

So you paid off your student loans this last year, I understand I did. And how much were they?

Okay, so I ran all the numbers, and it's hard to believe I paid it all off, but yeah. So basically, let's start out from the beginning. I graduated in 2013 and I had like $226,000. That's undergrad and optometry school. So I'm an optometrist. And for about five years, I was just paying the minimum, which was anywhere between 801.200. And then they went up to like 1800amonth. So anyway, the final cali was after the last 26 months. I got really aggressive with it, and I paid off $229,000 in 26 months. Wow.

Very impressive. Very impressive. And what was your average income over that time period?

So I started out working, I'm in private practice. Just started out making like a little over a hundred thousand. And then I eventually bought in and started getting up to 150, then about 250. In the last couple years, it's been over 350, approaching 400.

Very impressive income. As an optometrist, you own your own business, I assume?

Yes, well, I'm a partner. 50, 50 partner.

Awesome. And is the, is the ownership of your business knew about that time period or were you doing that the whole time?

No. So the first year I was just like an associate, and so I was making like 100. That's the thing with optometry that I wanted to bring up and kind of talk with other optometrists out there. I think I'm talking veterinarians are kind of the. The worst debt to income ratio you can have. In fact, I saw on your site just yesterday, I was looking at stuff and the average optometrist was the worst. They were like almost 15% of their income, according to some graph you had on your site, went toward their student loans. So they're graduating. I was graduating 230,000, basically in debt. And the average optometrist makes between 100, 150,000 a year. So that's why I really wanted to get into private practice. That was my goal. And because I knew that there was no way out of this without really increasing the income. And so once I bought in, that's when they really started making more money. But it was. I ended up buying a quarter and then I ended up buying another quarter later. So now we're 50, 50 partners. But that's really what got the income up to, you know, over $300,000.

Awesome. So clearly the higher income had a lot to do with it.

Oh, definitely.

But you still don't pay off $226,000 in two years just from having that income. What, what has happen? How did you do this? Something. Something lit a fire in you, and you changed some things in your life. Tell us what you did.

Well, I think the biggest thing is just knowledge, like learning. I listened to your podcast, I read your books. I kind of got into the fire community. So I listened to Choose Fi and all these guys. So I really started just looking at the numbers. One thing that I recommend for people is look at how much your interest is going up every day. So I was paying $900 a month just in interest every day. And so, you know, for a little bit there, when I was income based repayment, I was only making $800 payments, but my interest is going up $900 a month. So I literally wasn't even paying all the interest on my loan. And so after five years, that's what really kind of made me so mad.

This happens to a lot of people with credit card debt. They're like, I've been paying on this for five years.

Exactly. So that's what literally you start to think of, like, you know, these lenders is like these monsters. You, like, hate them. You develop this like, almost like a hatred for these people, you know, like, I hate you. You know that Dave Ramsey likes to say, you know, Sallie Mae moved in to your fourth bedroom or third bedroom or whatever. And I mean, literally after five years, I had paid and I owed 3,000 more than what I had started with. You know, five years later after paying, I paid $40,000 in interest over that five year period. So $40,000 in interest paid and I owed 3,000 More than when I started. And that just really, just ate me alive. I was like, this is gone.

You got mad?

Yeah. Oh, yeah. You get mad and you get aggressive and you're like, look, I'm going to start throwing money. And that's the other thing is you. And I put this on my. On that Facebook post you guys had on. There was, you've got to start throwing like 10 grand. You can't like kind of pay 2 grand a month or something. I mean, the first 10 grand I paid, I looked on here and you. I threw a big chunk at it and like all of it went to interest. I mean, literally it's like principal zero interest, the entire 10 grand. And then it was like, holy smokes. So then a couple months later, I threw another, you know, 10 grand at it. And that time, I think two of the 10 went to principal and the other eight went to interest. Because I would so back, you know, through all school, I had all that interest built up.

This was just interest that hadn't capitalized that you were paying off.

Yeah, exactly. Yeah. So it just makes you sick when you throw $10,000 at something and it literally doesn't even touch the principal. So, yeah, finally I paid another like 10 or 15 grand. And I think all of it at that point went to principal because I had made another payment that month. And so anyway, that all just went right into principal. And that's when you start really feeling good. You're like, hey, I'm onto something now. And then after that, boom, boom, boom. You just started. Anytime I got extra money, it was throwing that. Now I still max maxed out my 401ks and HSA, all that stuff. So the entire, the last, at least the last four, this will be my fourth year. I think I've maxed out my 401k, so I've still been able to do that but on the side now the other thing though too is as a private practice, we have to make private practice payments. I pay close to $7,000 a month in private practice payments. So I'm paying that and taxes and all the student loans. So yeah, you still have to be kind of aggressive even though you're making between 3 and $400,000, you still have to pick and choose where your money's going.

Yeah, for sure. So what do you think? Was it harder than you expected when you really got into it two years ago? Was it easier?

I think it part of it was easier because I could see the progress, you know, those, those first. I think it's harder when you're making a hundred grand because they know I was there and you feel like, hey, I'm out of school, I'm making $100,000. And and so you're like, I should have all this money. And then you hear the government, you know, what made me mad is they, you know, they send you this. So I was on the income based repayment and once a year, you know, I get this email out of nowhere that's like, hey, you need to submit your tax return so that we can tell you how much you're going to owe us. You know, and then you never know, like, hey, am I going to owe you 1000amonth? Am I going to owe you 1800amonth? You know, then they kind of threaten you if you don't do this, you're going to owe us 2,500amonth because we're going to kick you back onto like a 10 year, you know, payment plan. And so when you're making 100 grand and they're threatening you're going to be paying 2500amonth, that kind of get your attention. I didn't like that feeling. And so I, I wanted out, you know. But the thing is I kind of messed up on I wish. It's kind of funny because ironically it did end up messing me up. But I waited really a long time to refinance because I really wanted to. I was like, I got all these Benefits with these government loans. I just want to keep, keep. It's almost like that safety thing where you feel like if something goes wrong, I can go back to these income based repayments or, or something. But so I kept waiting and waiting and waiting and finally I made up my mind and I was aggressively paying it down, paying it down, paying it down. So I finally refinanced and now here we go. And I paid it off this year back in September when I actually paid it off. So it was during the pandemic. Well, then I think right around that same time, they got zero interest on their student loans and stuff. And I'm like, oh, this is exactly.

Why kick you while you're down, right? You try to do the right thing and they punish you for it.

Yeah, yeah. For years I'm thinking I got to refinance, got to refinance. Okay, I'm going to go ahead and refinance. Enough of this, you know, screw the benefits, I'm moving on. So I refinance and then sure enough, boom, zero percent interest for the.

Yeah, exactly. But you're done now. How's it feel to be done? How's it feel to not owe an auto Sallie Mae a thing?

Oh, yeah, it feels amazing. It just like I said, you don't get those emails, hey, by the way, your payment's going to go up to 2,500. That really just would eat at you. It would eat at me. So it feels amazing to just know that I don't have to worry about that my education is paid for.

Some people say you should carry a bunch of debt for a while so you can invest and earn more than your student loan interest. How do you feel about that advice?

I thought about that because obviously I see that all the time too. And I think for me it was just the security, the knowledge that doesn't matter. What happens in the future? I don't know, Sallie Mae, nothing. So if something happens to my income, I don't have to worry about making $2,000 payments. And I don't want to wait 20 years for the government to say, okay, your loans are forgiven. I mean, that's if they, if that works out. I mean, I don't want to put all my trust in the government. So the thing about it too is I was thinking, you know, if I would have put all that $200,000 into a taxable account, at the end of the day it's like, well, now I got 200 or today I grew to 250 and then I owe 200. Was I willing to then cash that 250 out to. To pay the 200? You know, part of me would have been like, yeah, let's do it. And part of me's like, no, you can't. You got to make your mind up. You got to. You can't straddle the fence, I guess. And so for me, it was like, nope, I'd rather have the guaranteed return. I'm going to pay the sucker off, and I'm going to move on with my life.

Congratulations on your success.

Oh, thank you.

This is really impressive. $226,000 in just a couple of years. And thanks for what you do well.

Thank you. I appreciate all your help. You guys are very beneficial to all of us out there that don't know any of this stuff. You're very welcome. I've learned way more after graduating than I ever did through eight years of school.

Sounds like the typical situation. Well, thanks for coming on today.

No problem. Have a good day. All right.

I think there's a lot of lessons to learn from that story. Number one, you don't have to be a physician to pay off a significant amount of debt very quickly.

Okay?

Even allied health professional, an optometrist in this case, can do it. It takes some frugal living, it takes some dedication, some focus, but it can be done, right? I mean, when I think about the worst debt to income ratio professions out there, I think about veterinary medicine, I think about optometry, right? But you know what Justin showed, it can still be done. So I mean, it's really impressive to me to be able to do this on that sort of an income. And it involves, in this case, some even hatred for lenders and to just be done and be sick of owing money to people. When you get like that and you know how to do it and you're dedicated and you're disciplined, well, you can pound out a lot of debt in a hurry, as you can see. If you are finding our podcast informative and helpful, check out our website. Since 2011, we've been working hard to provide valuable personal finance and investing information. Through thousands of blog posts written by an array of authors, you can find information on how to manage your student loans, fix and avoid common financial mistakes, understand your retirement accounts, optimize your investments, find professional help at a fair price, get started investing in real estate, and so much more, all at no cost to you. You can find out more about the courses we offer, the conferences we put on, the newsletters we provide, and interact with other WCI readers through our online forum. Head on over to whitecoatinvestor.com to start learning today. 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.

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. Sam.