MtoM #41 - Pediatrician pays off $300K in 3 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 41. Pediatrician pays off $300,000 in three years. You're going to like this one.

Did you know that the White Coat Investor not only has a podcast and a blog, but but several books that will help you on your way to financial independence. These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing, and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances or early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help. All right, let's get our guest on today.

All right, our guest today is Dr. Sabrina Perino. She is a pediatrician who has accomplished an important goal, one that I know many of our listeners would love to accomplish or have already accomplished. She has paid off her student loans. So welcome to the podcast and congratulations on your accomplishment.

Thank you so much.

All right, so $300,000 is the amount, right?

Yeah, that's right.

And how long did that take?

It took about three years.

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

I think the average was about $200,000 between me and my husband.

Okay, so $200,000 between you and your husband. So not exactly the $800,000 incomes we sometimes have on this. Clearly had to work hard and make some sacrifices in order to pull this off.

Yeah, we really did.

So talk to us about how you did it. How did you pay off $300,000 in debt on just $200,000 of income in only three years? I mean, that's basically half of your gross income. Plus, you know, due to the interest had to go toward your student loans. How did you do that?

Yeah, I mean, for us, I think what ignited my decision to do it was having kids that everyone starts asking, oh, are you saving for college for them? And I was thinking, how do I save for college if I have to finish my own med school stuff? So that got me really interested in figuring out what to do quickly. And one of the things that I decided was to do a very short term hold on, like saving for retirement and just focusing on getting rid of the debt. And so we, you know, set little like monthly goals and annual goals and just turn into a big game. Trying to just get numbers down to certain amounts and then knowing that at some point it'll get to zero.

And I imagine you kind of start seeing momentum after a while.

Yeah, I think anything that was still in the 200s was pretty painful. But we started getting into the 100,000 range and below. It really felt like the end was near. And it really helped me to realize, like, I never want to live through anything like that again.

Yeah, I think a lot of people that pay off a big debt like that arrive at that same conclusion that they're like, that was a lot of work. That was a sacrifice. I don't want to do that again. It's a little bit like completing residency that way, I think.

Yeah.

Wonderful experience. Don't want to do it again. All right, so how old are those kids now?

Four and two.

Four and two. So still young. Lots of time to save for college. Especially when you know what you can do in just three years. So that's pretty cool. So did it turn out to be easier or harder than you thought it was going to be?

At the beginning, I would say there was a short time period where it seemed easy. And then in that middle, right, somewhere between 100 and 250. It's kind of like it just feels like it's taking forever. But I don't know, I mean, I think that that's when I started to just do little things. And with each paycheck that I would get, I would say, oh, let me round down the number, you know, to an even number. Let me put a thousand here or like, you know, $50 here to make it just look right. It was just turning into a little game so that it seemed like I was always checking the numbers, you know, weekly just to. To do something with it.

And who is your supporters during this time? I mean, I can't imagine the two year old gave you much support for this particular goal. But I mean, did you feel lonely doing this or who was helping you?

I mean, it was definitely weird. I don't have anyone in my family who's a physician, so nobody really knows. And I think that the assumption is that, oh, once you're a doctor, you're rich and, and congrats. And so I think a lot of the stuff that I did utilize was some of your book stuff and website. And then, you know, at that point there was some like Dave Ramsey stuff I was looking into. So it really started getting my eyes open to the world of, you know, like financial independence and literacy, but with the lens of medical because it is very specific for us who are going through this.

Yeah. Now that you have this debt monkey off your back, I suppose you can now start working toward being the rich doctor that your family already thinks you are. Most likely they don't realize you're, you had a, you know, negative net worth of $300,000 coming out of training. They all just assume you're, you're in the money now. So that can be definitely a unique to I think first generation doctor problem. So how do you feel you got the student loans gone? How's it feel?

It's good. I mean, like I said, I've used that learning to try to help out other people that I know in medicine who want to try to do something like this. But there's still a lot of people who, they're just, they don't know how to go about. So I've learned not to be too pushy about, you know, talking about it unless people really want to. When they're ready. Right. When they're ready.

Do you feel bad for the people that don't kind of see?

I do. I think that especially, you know, I think that they assume that their body is going to be able to keep up over the years, that they, they can handle this for the long term. And I don't think they realize that just knowing that there's security of if something were to happen and I would have to quit, that I could, there was no burden on my shoulders now to deal with that.

Now some people out there say, you know, your student loans, 2 or 3 or 4 or 5% whatever, you should carry them around and invest and earn more than your interest rate on the student loans in order to come out ahead. You clearly did not believe that. What would you say to someone who makes that argument?

I mean, if that's the choice that they're going to make, I don't think anybody can convince them. So I think that there's still that idea of, you know, what if you have a seizure tomorrow? What are you going to do? You know, like there's a lot of unknown. So you can speculate all you want about the future and doing that, but it's assuming that you're going to work every day and be able to keep up. So I wish them Luck. If they want to even do that.

It introduces a certain amount of risk, doesn't it? I agree with you. Okay, so let's go back three years. We find somebody that's in your shoes where you were three years ago. They're sitting there, they're a pediatrician, they're making 150, 200, $225,000 maybe, and they owe $300,000 or more. And they're looking at it going, how am I ever going to save for my kids college when I have this hanging over my head? What advice do you have for that person?

I would just tell them to be prepared to be different, you know, like, I still have the oldest car in the Dr. Parking lot. And, you know, I may not be, you know, grabbing lunch out every day in the clinic. And so I know that it does make me a little bit of outlier, you know, outlier compared to other people. But to just get comfortable knowing that if that's the goal that someone wants to do, it's okay, you know, you don't have to do what everyone else is doing.

Yeah, you know, I've really experienced that in my partnership. Right. When I joined it in 2010, right. I was the cheapskate guy. I was the guy with the beater car. And now everyone's asking me for financial advice, Right. I'm the one who's only working six shifts a month. And they became a lot more interested watching what happened in my life over the last decade, for sure. And I think that's probably the experience you're going to have over the next decade for you. And people start going, now, wait a minute. How did you get to where you are? Because your life looks really awesome right now, so that's cool. Well, you just freed up about, what, 8,000 bucks a month in your budget, right? That was going toward student loans.

Yeah.

Well, what's next?

What are you going to do with that money?

How much are you going to spend? How much are you going to put toward, you know, investments, kids, college, et cetera? What's next in your financial goals?

So all of it. I mean, the challenge I have now is that I'm in SoCal, so we, we are buying a house, and so we're going to use that money to put towards retirement, save for the kids, and then hopefully pay off a mortgage in 10, 10 to 15 years, and then just enjoy working for the sake of working. You know, that that's really the main goal is. I just don't want to wake up and have to go into Work, feeling like I don't want to be either. It's nice knowing, oh, I don't have to go, you know, even though I love going, especially in pediatrics, most of us, the goal is to be as old as possible. Patients who've known you for 20 plus years, that's really like the, the goal is, you know, older and wiser. So I want to be able to do that and have people know that I'm coming to work because it's fun and I enjoy it, not because of my financial burdens, you know.

Yeah, well, one of my good friends down the street is a pediatrician, so I totally get what you're saying. And just seeing the light in his eyes, just coming home from clinic or even going in when he's on call to help out with a newborn or whatever, he's got the light in his eyes and it reminds me every time I see him of why I fell in love with medicine in the first place. So it's wonderful to be able to practice, not because you have to, but because you want to. And Congratulations to you, Dr. Perino, on accomplishing this wonderful goal. I know your story is going to inspire somebody else to do the same, so thank you so much. Congratulations on your accomplishment. Thank you for being a doctor and thanks for coming on the podcast.

Thanks for having me.

It's always a pleasure to talk to a pediatrician. Those folks are so happy. I love my pediatrics rotation in medical school and pick you rotations and residency, et cetera. It's always a pleasure to work with that particular group of people. You know, they have this reputation for having the lowest incomes in the house of medicine. It's not always true. Obviously the intra specialty pay differences dwarf the inter specialty pay differences, but it's true for a lot of pediatricians for sure. And to see them also being able to knock out their student loans and sizable student loans, well above average student loans in three years, gives me great hope that yes, medicine is still a good investment. It still makes sense to go to medical school. We're still going to have great people becoming doctors. And so I love having people like that on the episode. I hope you found that as inspiring as I did.

Did you know that the White Coat Investor not only has a podcast and a blog, but several books that will help you on your way to financial independence? These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency, and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help.

See you next time on the Milestones to Millionaire podcast. Till then, keep your head up, shoulders back, and thanks for what you do.

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.