MtoM #48 - Family Docs Pay Off $570K

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 48 family docs pay off $570,000. The white coat Investor is proud to introduce our no Hype Real Estate investing course, which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. All right, let's get our guest on today. Katie is coming on the podcast. All right, I am here with Katie. Welcome to the Milestones to Millionaire podcast.

Thank you. I'm happy to be here.

All right, so what is your profession specialty, and how far are you out of your schooling and training?

So, I'm a family medicine physician. I'm married to another family medicine physician. We both graduated from medical school in 2009 and residency in 2012.

Okay, and how much debt did you pay off?

Well, as of July 1st of 2012, we had between us $570,000.

Wow.

We paid that off in nine years and finished it up in August of this year.

Awesome. Congratulations. That's wonderful.

Thank you.

So over that time period, I don't know how much you were both working. Were you both full time? I mean, what was your average household income over that nine years?

So we were both full time, aside from the time I took off for maternity leave a couple times, and we varied between 300,000 and 440,000.

Okay, so pretty typical family physician incomes. And you used that to pay off $570,000. How'd you do that?

You know, sometimes I don't even know how we did it. We just paid it off a bit at a time. I think one thing that we were looking at was every time we had an extra 3,000 or 5,000 or $10,000, we just put it straight to the loans. And we did that year after year after year. And it just got to be a habit. Anytime we had extra money, put it on the loans.

Was there some point at which you decided that this was going to be a priority for you, or did you work on it about the same amount over the entire time period?

Well, I'll say I wish I discovered your website years ago. We knew that with the monthly payments that we were going to have, if we just paid on the standard payback period, it was going to be something that we would be dealing with a lot for 10 to 25 years. And so we hit it really hard. The first two years, it was before we had kids. We rented, we lived like residents. Once we had kids, we had moved again and changed jobs, and we had to dial it back a little bit with the speed because we had to hire a nanny. And all of those things were kind of expensive, and we wanted to start saving for retirement more. So the first two years were a ton of it, and the last couple of years, we hit it really hard.

Cool. So in the end, did it turn out to be easier or harder than you thought it was going to be?

You know, I think it was easier in the beginning. It felt insurmountable. I would log into Sallie Mae with Sallie Mae at the time, and every day you could see our balance going up. I'll tell you, I didn't log in every day, but every time I did, it was just shocking. And then it just started going down after a couple of years in, and that was inspiring enough to have us keep working at it.

You could see the progress you were making. So how's it feel now? I mean, your student loans are paid off.

It is so great. I mean, I've been listening to your podcast a lot, and some people talk about how if you put the money in the market, we would probably be better off financially than we are now. And that's definitely true, especially over the last couple of years. But I am so happy not being on the hook for thousands and thousands of dollars every month. It's just a great feeling now, every month to know that we get to save this money and invest this money and use it in different ways.

Does it affect the way you practice? Do you think it's changed how you interact with patients?

Well, I think when you get to approach your job every day as something that you want to do, that really changes it. And I'll tell you, we've been focusing a lot on work, life balance, and. And I went part time. My husband and I are committing to taking all of our vacation. And so in that way, it's made a really big difference.

Do you think if you still owed three or four hundred thousand dollars, that you wouldn't be as comfortable making those decisions?

Oh, Absolutely. I mean, when in the beginning, when we owed this much money, we worked so much. Every possible chance we could get a few extra hours, we did it. And now we don't have to do that anymore. And it feels really good. More time with the kids, more time seeing family. We're really enjoying things more now.

What loan programs did you use? Were you in a government loan program, or did you end up refinancing your loans, or what was your strategy through there?

You know, I have to say we didn't know a lot about the programs that were available. And back in 2012, it just wasn't really publicized too much what was available to us. So we haven't had any government programs. We didn't do public service loan forgiveness. We did refinance several times with the two of us over the years to get lower interest rates, but that was about it. We just paid it all off.

Carved it out of your budget and sent it into the lender.

Yep.

All right, so let's go back. Let's say there's somebody in your situation. They are coming out of school or they're in residency, and they owe 250,000, $300,000. They're married to somebody else that owes $300,000. What advice do you have for them?

Well, I think that it means a lot to listen to your other attendings and see what they did well and what they wish they would have changed. One of my biggest pieces of advice is similar to what you give people is drive a used car. Don't buy a house right away because you're likely to leave your first job, as we did a couple years in. Live in that crummy rental just a little bit longer because you'll appreciate the nicer house even more when you really have the money to enjoy it. And then just get in the habit of sending every spare dollar that you have into the loans while still saving in your 401s and the 529s if you've got kids.

So it sounds like you took a balanced approach over those nine years, so you've built some wealth along the way.

We did.

All right, well, what's next for you and your financial goals?

Well, as I mentioned, we've been focusing a lot on working a little bit less, spending more time with the family. So I went part time, and that's been really enjoyable, spending more time with my son, which has been great. And we're really starting to focus more on the 529s. We didn't really want to do a Lot of that while we still had student loan debt. I don't know if that was the right decision, but that's the decision that we made then putting more in the taxable, which is another thing that we didn't do a lot of while we were focusing on the debt. The other thing is we have some projects on this big old house that we have that we've just been waiting on. And we. We're actually going to do a couple of those just a little bit at a time as we have cash to do it. And that's gonna be fun.

Awesome. Well, this is a pretty remarkable story. You guys paid off a lot of debt. Yes, it took a little while, but you were also saving along the way. And so it's not like you're behind in anything else. You just simply took it out of your living expenses by living frugally, driving an older car, et cetera, not going crazy on home renovations, so on and so forth. I mean, basically, you just came up with a plan, you followed your plan, and voila, nine years years later, $570,000 is gone. So that is pretty awesome. Very, very well done.

Thank you.

You should be proud of yourselves. Do you have any plans to celebrate a little bit?

You know, we have a lot of friends locally, and I think that was the other thing that helped us, is that we absolutely love where we live. And so we did have a little get together with some of our friends and told those that care about that kind of thing, how we did it. And so that was fun.

Cool. You know, I feel like paying off student loans is one of those things that you can invite your friends over still and celebrate. You know, years ago, people used to have mortgage burning parties. I haven't heard of any of those lately. But student loans, you can still do that on. Everybody feels kind of united and stepping on those and getting rid of them, getting them out of your lives. I don't know that you're gonna be able to celebrate a lot of your other future milestones with all of your friends, but that might be a little more awkward to celebrate financial independence with them.

Yeah.

But this one, you can. So well done. Congratulations on your success.

Thank you.

All right. I hope you enjoy that interview. You know, it's always fun to talk to people. When we do these recordings, I usually talk to them for a few minutes before and afterward. You don't actually get to hear the whole interview, which sometimes comes out with some additional information. You know, it's really fun. She wanted to come on because she felt like she didn't hear very many of these Milestones interviews that talked about people paying off loans in longer time periods. They spent nine years paying theirs off. And I pointed out to her, well, when you graduated, you had far more than average debt and as family practitioners had less than average income. So they really had, in a lot of ways, a tough row to hoe. And so it wasn't surprising at all to me to see them take nine years to do it. And I was proud of them for not only doing that, but also being able to invest along the way. And so now they're not like they're starting from scratch now. They've already gotten a significant nest egg being built. So pretty inspiring story. You too can pay off your student loans. You should not feel bad if you can't get them paid off in two or three years. These two docs took nine years to pay theirs off, but look at what it's allowed them to do. Right now they're looking at making changes in their house. They've made changes to how they practice, they've made changes in how much they practice. It really is pretty liberating to be able to get your financial ducks in a row. The White Coat Investor is proud to introduce our no Hype Real Estate Investing course, which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. Well, thanks for being here with us again. We record these every week. We drop these Milestones to Millionaire podcasts on Mondays. We drop the regular White Coat Investor podcast on Thursdays. I hope you enjoy both types of podcasts. We sure enjoy making them for you. And keep your head up, shoulders back. You've got this and we can help. We'll see you next time right here 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.