MtoM #60 - Captain Pays off $269K in 2 Years

This is the White Coat Investor podcast. Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom. This is Milestones to Millionaire podcast number 60. A captain pays off $269,000 in two years. Welcome back to the podcast. This is the Milestones to Millionaire podcast where we talk about your accomplishments, we celebrate them with you, and we use them to inspire others who are working toward the same goals. There are lots of milest in life. The first one for most stocks is simply getting back to broke. But it might be paying off your student loans or paying off a mortgage or hitting a net worth figure like 100,000 or a million or 5 million or 10 million. Whatever. Whatever your financial accomplishment is, come celebrate it with us. You can apply@whitecoatinvestor.com Milestones. 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 financial future, and start down the right path toward financial freedom. Book a consult today at studentloanadvice. You can do this, and the White Coat Investor can help. All right, let's get our guest on the line. I think you're going to enjoy this one. With us on the show today is Dan. Welcome, Dan, to the Milestones to Millionaire podcast.

Thanks for having me, sir.

Now, you are a. At least you were. Are you still in the military?

Yes. So I'm currently a reservist with the army, and I did the MDSSP scholarship kind of program when I was in medical school and residency.

Okay, so due to the program, you had a military commitment anyway?

Yes, sir.

Okay, and what's your specialty? And how far are you out of training?

Yep. So I did a family medicine residency and a sports medicine fellowship. My practice is a 5050 split between those two.

And you're primarily civilian now, correct? As far as your practice or primarily. Okay, primarily civilian. All right. And married? Single.

I'm married and my wife is a neonatal nurse practitioner.

Neonatal nurse practitioner. Okay. And you guys accomplished something pretty special with your student loans. It was a both of your loans or just one of your loans?

We paid off all student debt about two years after I finished my fellowship training. And the total education dollars that we spent was about 400,000. And that was between my medical school, her training, as well as I did MBA during my residency and after fellowship as well.

Okay, and what was the total debt you had when you came out of your training?

The maximum debt we had was about 260,000.

260?

Yep.

Okay, and how long did it take you to pay that off?

2 years out of fellowship.

Okay, that's. That's pretty quick.

It was.

What was your average household income during. During that time?

Yeah, so our income range from when I was an intern, our combined income was about 100,000. That was the lowest. And then this past year, combined income was about $460,000.

Okay, so quite a swing there. But I mean, you must have been throwing $150,000 a year or so with this debt. How'd you pull that off? How'd you manage to squirrel that out of your income?

It was multiple ways. So when I moved back to central Ohio, I ended up getting a relocation student loan stipend, and I got about 70,000 for that. And each year with my company, there's a $20,000 student loan payment from there. And then we paid all bonuses towards that and about 4,000amonth, just as the standard rate.

So you kind of just threw the extra money at it.

We threw a lot of money at that loan.

All right, so now your employer was willing to put money toward your student loans, Would they have put money toward it after two years?

So they would. So what they offer is a 20,000 year student loan payment for four years. They call it a retention bonus. So if you do not have loans, they can provide it for whatever you want, but we use that to pay down our debt.

Okay, so you can actually take it as cash now, you're not actually losing that?

That is correct.

Okay. All right. Because you always wonder about that. A lot of people wonder, should I drag it out longer if someone else is paying it off, Et cetera, et cetera. And sometimes it can be a calculation if it's a relatively small amount, but. All right, so I mean, did you guys. Was this a plan? How long were you. How long were you planning to take to pay off your student loans?

So my initial goal was about three to five years after residency. We've budgeted pretty tightly. We followed the physician on fire. He has the tale of four physicians, and there's four different budgets to follow. When we followed the Dr. A which was the most limited lifestyle of about living on 80,000 a year. And then we actually did your course fire your financial advisor and came up with a written financial plan. And that was kind of what we wrote in. And we beat our goal, which was awesome.

Cool. So did it turn out to be easier or harder than you thought?

I've been thinking about that question a lot. In hindsight, maybe a little bit easier. But I think the toughest part is just seeing friends accelerate their lifestyles, and that's even going through medical school. And we elected to not purchase, like a Dr. House or we didn't even buy a couch because we wanted to keep throwing all our additional income at student loans.

Of course, now you've just freed up at a minimum $4,000 a month that you can do whatever you want with.

Correct.

You can buy a lot of couches with $4,000 a month.

I agree.

All right. So how does it feel to have all this student loan debt paid off?

It feels awesome. So I actually paid off my student loans when I was deployed for the second time and I got to FaceTime my wife from the Middle east as I clicked the final payment button and she started crying. And I was very excited sitting in a trailer in the desert.

Well, whatever it takes when you're deployed, man. It doesn't take much to be highly entertaining. Even that's a special moment. It's a little hard to celebrate when you're on opposite sides of the planet, though. Have you guys had a chance to celebrate this milestone?

Yeah, we did. And so again, going back to your articles, those financial milestones, every time we do those, we try to do a little celebration. So we did kind of the super nice dinner out on the town and went on a date, which was, we felt very well deserved.

Did you guys ever feel deprived during the process? Did you ever feel like, man, this sucks. I can't spend any money, I can't get what I want. Or was it. Did it feel like you were still able to buy what you wanted to buy?

We did not feel deprived. We both have low expense hobbies, so we just kind of like to exercise. And so we were able to do whatever we wanted. We were still able to take a couple vacations a year and go hiking, which we also enjoy, which is relatively cheap. So it never felt deprived living on kind of that 70 to $80,000 year annual budget.

Now a lot of people, especially these days, where interest rates are super low and inflation's, you know, significant over 7% now they're saying, carry Your student loans don't pay off your debt. Invest in something with a higher return than your interest rate, you're being paid to carry debt, et cetera. What do you say to someone who says that?

Personally, I think it's all based on personality type. So there are people who are uncomfortable with debt and if that's your personality type, I say pay it off as fast as you can. Other people who are more comfortable with that, they're not going to pay it off more aggressively, even if I suggest to do so. So to those who follow your blog, they tend to be more debt averse and so I strongly recommend pay them off as soon as you can and it gives you a lot more freedom in the long term.

So what advice do you have for someone that's just like you go back a few years, you know you're coming out, you owe hundreds of thousands of dollars in student loans, you feel his weight over your head, you want to be rid of them. What do you recommend to that person?

I recommend that they come up with a plan for their debt and get as much education as possible. I think a reasonable template for, you know, expanding your financial education is starting with your boot camp. Book is an excellent resource for someone who doesn't have any information and then just develop a written plan. If you're looking for new jobs, make sure you get multiple offers from different employers and then see if there's additional dollars hanging around. So if you don't ask, you're not going to get it. Sometimes there are student loan repayment dollars that are out in the community. If you're at an at need community area, they will give you stipends to move into that area and pay off some of your loans as well. So just find as much money as you can that people are willing to give you.

Yeah, you had a signing bonus, it sounds like, and you also had student loan payments and of course you know some pretty significant tax benefits when you deploy. So you managed to piece a whole bunch of things together to help pay this off.

Correct. So I always was searching for different ways to get whether that was education paid for or even a supplementary income. So I was moonlighting a fair amount because I chose the residency I did, I ended up getting a tuition benefit for the mba. And because my wife was doing her graduate school for her nurse practitioner program through the university that I did residency for, we ended up getting that tuition benefit for her as well. So there was alternative ways to reduce our debt burden from student loans just by looking where we were employed.

You Know, it's interesting, a lot of people ask, especially pre meds, is it worth it? Is it worth it to borrow hundreds of thousands of dollars in order to become a doctor? Now you're kind of on the end of that process of paying for medical school. You know, you're shoot, what, nine years past those folks when they're asking that question, nine, 10 years, what do you say to them? Was it worth borrowing to pay for your schooling?

I think it is. I sometimes struggle more with the operations, management of our practice. I love practicing medicine. I think the investment was worth it. I think the challenges for most medical students is their expectations of the job end up being a little bit different from the reality once they're in practice. And sometimes they feel a little dissatisfied once they get into their clinical role. So, you know, if they're considering it, I strongly encourage people to shadow other physicians or providers as much as possible to see if this is the lifestyle that they're interested in. But right now, again, we have the surplus of income that's going to give us a lot of opportunities in the future to either retire early or pursue other opportunities if we want. So the big thing that I like is the freedom. And being a physician generally provides that higher income, which can give you that freedom in the future.

So what's next in your financial goals now that you've accomplished this one?

Yep. So we've been following that doctor a template. So our next goal is to become financially independent over the next seven years. We're currently on track to do so. The other thing that we would like to do is be more charitable with our income. I would really like to support our community with the additional income that we have. And I would like to be a lot more generous than we've been in the past when we were trying to pay down these loans.

Well, Captain Dan, you're a great American. Thanks so much for what you've done for our country, what you're doing for your community and for coming on here and sharing your story to inspire other white coat investors to do the same. We appreciate your time.

Thank you for everything that you've done. It's been a huge blessing to my wife and my life and. And we appreciate everything. So thank you.

Well, that was great talking with Dan. You know, it's fairly conventional path. You know, you go to work, you make money, you throw it at your student loans and they go away. I find these useful because they demonstrate that what I'm telling people is true, that it works if you live like a resident or A little better. In their case, they lived on like $80,000, which is obviously better than a resident lives. Then you got lots of money to throw at student loans or investments or whatever you want to do. You know, maybe you can start a real estate empire with that money instead of paying off your student loans if you don't want to pay off your student loans. But obviously if you throw it at your student loans, they go away very quickly. They were done in two years. $260,000 in student loans gone in two years. You know, I talk to pre meds all the time and they wonder, can I do this? That's a lot of debt, right? These are people that have never made $20,000 in their life, much less $200,000 in their life, and they're contemplating borrowing 200, 300, $400,000. The truth is, they can. It makes sense as long as you have a plan for those loans. Now the plan might be pslf. The plan might be living like a resident for a couple of years and throwing the loans at them. But so long as you have a plan, you can handle it. It makes sense to borrow a couple hundred thousand dollars in order to have a multi six figure job so long as you manage the money well. 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 studentloanavice.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. You gain clarity about your financial future 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. We'll see you next time on the Milestones to Millionaire podcast. Until then, keep your head up, shoulders back. You've got this. The hosts of the White Coat Investor podcast are not licensed accountants, attorneys or financial advisors. This podcast is free entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.