MtoM #22 - Family Doc Pays Off $230K in 6 years

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 22, Wendy the Student Loan Slayer. Still not sure what to do with your student loans? Overwhelmed with how to tackle that giant debt in an ever changing political climate, the experts@studentloanadvice.com are here to help guide you through the best options to manage your loans. Our experienced staff have consulted on over $250 million in student loan debt, and the average studentloanadvice.com client has saved over $190,000. You will receive a customized student loan plan using the principles of the White Coat Investor. Get answers to all of your student loan questions, gain clarity about your financial future, and start down the right path toward financial freedom. Put book a consult today@studentloanadvice.com you can do this, and the White Coat Investor can help. In case you're not aware, this month we've had a sale on our online courses, and today, July 12, is the last day to get that discount. Okay, so you have until midnight, if you're listening to this, the day it drops to get 10% off our online courses. That includes Fire your financial advisor, which is our flagship course that helps you write a financial plan. It includes the version of Fire your financial advisor. That includes cme. Right. So you can use your CME funds to pay for this course. That one is called financial wellness and burnout prevention for medical professionals. And of course, our continuing Financial Education 2021 course. All of that 10% off, plus if you buy it today, you get a free WCI T shirt. So check out that sale today. You got to use code W WCI July 10th. And you go to our Teachable page, whitecoatinvestor.teachable.com to buy those courses. You don't have to take them today. You just have to buy them by today to get that discount and the T shirt. All right, we got a great guest today who has really slayed her student loans. Let's bring her on. All right, our next guest is family physician Dr. Wendy Palastro. Welcome to the white Coat Investor podcast.

Thank you. Thanks for having me.

So we brought you on because you've accomplished something very remarkable among physicians. You've paid off your student loans. So congratulations on that.

Thank you.

How much did you pay off?

$230,000.

$230,000. And how long did that take you to do it?

Took me six years.

Six years? And what was your average household income over that time period?

It was about $260,000 for my husband.

And I, similar to the amount of debt that you had. And how'd you do it?

Like you said, I tried to live like a student, live like a resident as long as I could. I did still save for retirement at the same time, have two kids, which aren't very cheap, unfortunately, and split up my goals between all those different things that I like to do. But mostly what I tried to do was live below my means, save more than I spent, and put as much as possible toward the loans.

So was there a decision made six years ago that we're going to pay these off over six years, or did you kind of muddle around for a little while and then get serious about it, or what kind of happened?

Yeah, it was kind of a muddling process. Yeah, that's a good way to put it. You know, when I first became an attending, I decided, oh, just to pick a number, put a thousand toward the loans each month. And then as I got more and more tired of the loans over time, I just started to get more and more aggressive.

What do you mean you got tired of them? Tell me about that.

It just weighs on you. It's not a fun thing to have your net worth be negative and look at the big debt, and you're putting a tiny amount toward it and not seeing it budge very much.

So at some point in there, you decided to put more than $1,000 a month toward those loans. How much were you putting toward them at the peak, when you're really hardcore paying these off?

Exactly. Yeah. I was putting more like three or four thousand a month. Yeah.

So a big chunk, pretty significant portion of any physician income, particularly of a family physician income.

Absolutely.

So in the end, did it turn out to be easier or harder than you thought it would be to pay off your student loans?

I think it was harder, yeah. You wish it would be easy to accomplish any goal you'd set out to do, but it's hard to make sacrifices. You get blessed with a big income as a doctor, but you get tempted with all these things to spend on and things to do, especially if you have a family.

So how does it feel? Your student loans are gone. You've just freed up somewhere between $1,000 and $4,000 a month in income to do something else with it. How are you feeling about that?

Feel pretty good. Yeah, it feels kind of strange, actually. It feels very free and kind of trying to figure out what to do now with all that extra money, I just did that about six months ago. So it's still kind of new and still kind of hard to believe that I did it.

Was your family supportive of it? Do you feel like you were doing it on your own? Were you all in it together or what was your process?

Yeah, I was a little bit of. Yeah, mostly on my own. Yeah. I mean, my husband didn't like the loans and yeah, it was mostly me, though.

What would you say to someone who said you should carry your student loans around for a while and you should invest in something with a higher rate return than your interest rate and try to come out ahead?

Yeah, I've heard that thought about it, but it's just not in my nature. It's not in my DNA. I'm pretty conservative. I don't think I could stomach that. I would see those loans every day or every week looking at my statements, and I would know those wouldn't go away. But the investments, they're great. They have good returns, but the market is very hard to predict. And I think I could predict better my behavior paying off the loans than I could with investing.

Certainly the nice thing about paying off loans is you get a guaranteed rate.

Yeah, exactly.

So what advice do you have for someone that's just like you were a few years ago, you know, maybe they're a resident and they're staring at $200,000 plus or $300,000 plus in loans. They know they're going into preventive medicine or pediatrics or family practice or something that's not necessarily going to make $700,000 a year. What advice do you have for that person about what to do with their student loans?

Yeah, I think one thing I've learned maybe is just getting older and getting wiser, but is learning to figure out what I can control. There's so much that I like to, or we like to worry about as human beings what we can't control in terms of how much school costs, how long it takes, how the market does. But there's so much I can't control. How much I save, how much I spend, what career I pick, all these things. I think learning to figure out what I can control has helped me accept better the journey toward getting rid of this debt and the journey toward becoming a better person.

Are you enjoying your practice more now that you're done paying for school or less? Do you have more or less motivation to work now?

I guess way, way more, Yeah. I think I got kind of fixated and obsessed with the debt near the end the last year or two and thinking and minutiae about how many months it would take, how many hours each week it would take. I think that kind of made the job a lot harder to do because I was thinking more in terms of getting rid of the debt than seeing my patients. So, yeah, definitely getting rid of it has helped me focus more on why I'm doing what I'm doing instead of focusing too much on that.

So you think you're a better doctor now that you're debt free?

I hope so, yes. I sure hope so, Yeah. I feel. I feel better. Yeah.

So what's next in your financial goals? What do you, what do you turn into now?

Well, one is learning how to spend money. Going through all these years of being so frugal, letting the purse strings loosen a bit, and spending on what makes me happy. That's one thing I'm trying to learn how to do. The other thing is trying to save for my kids college while it's still fresh in my mind with how this debt journey went for me, I kind of don't want them to go through that either if I can help it. And then continuing to save for retirement.

Awesome. Well, thank you so much for coming on and for sharing your story. I know a lot of people will find it inspiring. I just recorded a couple of podcasts with people that, that frankly have fairly high income for physicians, knocked out their loans very quickly. And so I actually like hearing a story from somebody who clearly had to work very hard at it and stay disciplined for a number of years to knock it out, because I think that's far more typical of the journey that doctors take. But your, your example certainly demonstrates that it can be done. It feels maybe even better when you have to work that hard to do it. And I congratulate you on your success and your discipline. So thank you for coming on the podcast.

Yeah, thank you.

All right. That was a great episode. I think there's a lot to learn there. One, I thought it was pretty significant that she said it was a little bit harder than she thought it was going to be to make these sacrifices. And it is a sacrifice. It's hard work and you got to pass on some things. If you want to build wealth, if you want to pay off student loans, if you want to become financially independent, it means there's got to be some money that you don't spend on something else. And that is a sacrifice. It's hard, but I think it's worth it in the end. You know, as she says, she's no longer obsessed with her debt and now she's able to focus much more on her work and her practice that way. So it's hard but worth it. And I hope that episode was inspired to those of you who are paying off student loans still not sure what to do with your student loans? Overwhelmed with how to tackle that giant debt in an ever changing political climate, the experts@studentloanadvice.com are here to help guide you through the best options to manage your loans. Our experienced staff have consulted on over $250 million in student loan debt and the averagestudentloanadvice.com client has saved over $190,000. You will receive a customized student loan plan using the principles of the White Coat Investor. Get answers to all of your student loan questions, gain clarity about your and start down the right path toward financial freedom. Book a consult today@studentloanadvice.com you can do this and the White Coat Investor can help. Don't forget about our sale on the online courses. The code is WCIJELY10. That sale just goes through July 12, so you gotta get on it right away if you want to get that discount. Thanks to those of you leaving us a five star review on the podcast, it does help spread the word. Keep your head up, your 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. Daly, 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.