MtoM #5 - Anesthesiologist Pays Off $300K in 2 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. We normally don't do podcasts live here at the White Coat Investor. There's actually a substantial editing process that goes on behind the scenes. But today we're going to do two episodes live. All the mistakes, everything you could possibly see, we're just going to record them live, and then we're going to release these on the podcast over the next few weeks. So this is really exciting. But the reason we came up with the Milestones to Millionaire podcast is because basically, these podcasts where we bring you onto the podcast and talk about your successes, congratulate you, and use them to really give you, you know, inspire others to do the same thing you've done, have just been wildly popular. People love them. So we said, well, why don't we just do one of those every week? And so we've started to do that, and I think we've run three or four already. And today we're going to record two more right here in the conference. So let's bring out my first guest. She's actually local here from Salt Lake. So we're actually going to do this right in front of you here as part of the conference. Let's come on out. Welcome to the Milestones to Millionaire Podcast number five. If you're finding our podcast informative and helpful, we would encourage you to sign up for our monthly newsletter. It is totally free and includes useful, actionable information not available on the regular blog posts or this podcast. It's almost like being in a secret club. The kind of club that can boost your knowledge and enhance your wealth at the same time, with no strings attached. Sign up today@whitecoatinvestor.com Newsletter. You can do this, and the White Coat Investor can help. All right, so if you want to come on the Milestones to Millionaire podcast, all you have to do is go to whitecoatinvestor.com milestones and apply, and we'll get you on there. So these are people that have done all kinds of cool stuff. Some of them maybe became a millionaire, became financially independent, became broke. Right? That's a big milestone for most doctors just getting back to broke. Maybe they paid off their student loans or paid off a mortgage or got public service loan forgiveness, whatever. If you're willing to come on, we'll celebrate with you and use your story to inspire others. But our guest today is Dr. Vai Jessup. Welcome to the White Coat Investor Milestone and Millionaire Podcast.

Thanks for having me on, Jim. Good to be here.

All right, so we brought you on to celebrate paying off your student loans, which is actually a pretty awesome accomplishment. A lot of docs out there would love to be in your shoes. Tell us how much you paid off.

Paid off about 3, 300,000 in about two years.

$300,000 in student loans in two years. That is pretty awesome. And what was your average household income over that time period?

Probably about 550.

550. Okay, so a good income. That obviously helped.

Yeah, that helped out a lot. Yeah.

So how did you do it?

So for me it was, you know, kind of a three step process. You know, coming with the mindset to pay it off, coming up with a plan, and then, you know, execute, executing the plan. With regards to the mindset, a little bit about me. When I graduated high school, I joined the Air National Guard actually. And so they paid for my undergrad. And when I got into med school, I had the choice to either stay in the National Guard and take out loans or do HPSP like you did and owe four years to active duty Air Force. And so ultimately I chose to stay in the National Guard. And then I promised myself that I'd pay off my loans faster than I would take me to pay back Uncle Sam.

And you pulled it off?

Yes.

Two years instead of the four years that I. That I spent paying off my time loans.

Yes, yes. And so yeah, you know, I went through med school and residency. Towards the end of my residency, one of my co residents, Jen Evans Smith, she just kept talking about the white coat investor and I was, interestingly, I was just curious about it. I eventually bought the book and it's probably the best investment I made had so far besides marrying my wife, but.

Pretty good return on that 20 or 25 bucks, huh?

Yeah, it was actually. And so yeah, one of the chapters in that book is how to become a rich doctor and just outline the steps. And then when I finished my fellowship, we went moved back here and then we literally just went down the steps. I couldn't participate in my group's 401k right off the bat, so maxed out backdoor Roths and then just started paying down my loans. So when we started this, it was about March 2018. We were broke November 2019. And then we paid off my loans about February of last year, two weeks before the government shut down mandatory payments and sent the interest rates to zero.

Maybe not the best timing, but at least you know, you're done with it.

I shaved off one And a half. It took me about two and a half years total. I mean, I shaved off one and a half years that I would have had to be in active duty. I'd still be on active duty right now had I did the hpsp.

So when you say you came up with a plan that you then executed, what did your plan look like? How did you come up with the plan?

Literally, I was just following the steps in the book. I was totally financially illiterate going into med school, and I said when I read that book, it gave me a solid foundation to how I should invest my money. And so that was just the start. Just following those steps. And then anything else I was interested in, I would expand my knowledge on that.

But as far as your student loans, did you just take your $300,000 and divide it by 24 months and that's what you paid every month or how did it work out?

Every, like, extra cent we had went to the my student loans, basically. And so, yeah, we just made huge payments. Any time. Tax returns we got, any bonuses we got all went to student loans.

Awesome. Did it turn out to be easier or harder than you thought?

It turned out a lot. Be a lot easier once we got the mindset and my wife bought into that as well. We were on the same page. It was pretty effortless to pay that off.

And how does it feel now to have it gone?

Feels great. I now can keep moving further down the list on the things I can invest in and become that rich doctor, like in the outline of the chapter of that book.

So a lot of people say you should carry your student loans for a long time. You should drag them out so you can invest and try to make more money than the interest rate you're paying on your loans. What do you say to those people?

I mean, for me, it was just trying to be free. Right. Like I said, it was just a time thing for me. Any of you guys have been active duty military? I'm sure you enjoyed your time. It can be you're just locked into doing that for the military. And for me, I just wanted to be free from that. And so that just gave me the motivation to pay off my loans as quick as possible. And so that's just one less thing to worry about. Now I can relax a little bit more and focus on other things. That burden's not hanging over me anymore.

It's amazing how much freedom you give up to protect freedom, right?

That's true. Yeah.

Okay, so let's imagine there's somebody that's Just like you were two or three years ago or maybe even 10 years ago and worried about taking out those student loans for medical school, et cetera. What do you say to them now that you're kind of on this end of it? You wiped out your student loans basically two years out of residency. What advice do you have for them?

I would say if anything, just try to avoid the lifestyle creep as much as possible when you first get out. And one of my favorite quotes is from Chuck Palahnik, who says, the things you own end up owning you. And I mean, you can find that out really fast if you just let your spending get out of control. And I've also noticed that, I mean, it's amazing the things that you can accomplish when you don't care what other people think. So I have like lots of friends with $100,000 trucks. They all make fun of me for driving my Honda Civic. Some of the parents in my kids preschool, they kind of like turn their nose up at us when they found out we were living in a townhome. I mean, I just thought that was funny. I'm totally free, rather I don't have to. I'm not burdened to debts or anything.

Yeah, it turns out that you can be rich or look rich, right?

That is true. Yeah. Yeah.

Okay, so what's next for you and your financial goals?

I'm with my group's 401k plan right now, so we're maxing out that max out the ross. We got 529 basically just going down the list. We're saving up money, invest, are interested in getting to real estate. So that's where we're going to go for right now.

Awesome. Well, congratulations on your success. I hope it inspires somebody out there in the same situation that's worried that feels this weight of their student loans on top of their shoulders to know that you can get out from under this relatively quickly. Thank you so much for, for your time and coming on the podcast.

Thanks for having me on.

Yeah, very welcome. So a lot of takeaways you can take from that one. Obviously having a lot of income helps, right? If you are an academic, pediatric, rheumatologist, it's going to be a little bit harder to pay off $300,000 in student loans than if you're a private practice anesthesiologist, ENT or orthopedic surgeon. So income does matter, and not only matters by specialty, but it matters within the specialty. I've always been very impressed at the wide range of income within a given specialty. The intra specialty range is much wider than the inter specialty range sometimes. So that's obviously something that made a big difference. But something else I was really impressed with was the ability to focus on that goal. I mean, he basically put every penny toward this that he had. After paying, obviously a lot of taxes you pay on that income, he put that toward paying off this, these loans. And so I'm really impressed with that. And then of course, the mindset that you no longer care what other people think about what you drive, what you live in, where you vacation, et cetera, being able to be a little bit different, you know, living maybe like nobody else is living, allows you in just a few years to live like nobody else is living. If you're finding our podcast informative and helpful, we would encourage you to sign up for our monthly newsletter. It is totally free and includes useful, actionable information not available on the regular blog posts or this podcast. It's almost like being in a secret club. The kind of club that can boost your knowledge and enhance your wealth at the same time, with no strings attached. Sign up today@whitecoatinvestor.com Newsletter. You can do this and the White Coat Investor can help. Keep your head up, your shoulders back. We'll see you later this week on the White Coat Investor podcast or next week on Milestones to Millionaire. Thank you. 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. It.