MtoM #7 - Psychiatrist pays off $330K in 3.5 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 episode number seven. Psychiatrist pays off $330,000 in 3.5 years. Hope you're enjoying these podcasts. We're having a lot of fun with them. If you want to be a guest on the Milestones to Millionaire podcast, you can apply@whitecoatinvestor.com Milestones and we'll see if we can get you on. No matter what your financial milestone is, maybe you've become a millionaire. Maybe you've paid off your student loans. Maybe you paid off a mortgage. Whatever it is, let's help you celebrate and use your story to inspire others to do the same. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do, for a fraction of the price of hiring a professional financial planner. The fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this, and the White coat Investor can help. All right, we've got a great guest today. Donnie and her husband Jonathan. Let's get them on. All right, we have two guests here on the podcast. We have Dr. Donnie Barnhart as well as her husband, Jonathan Adams. Welcome to the white coat investor podcast.

Hi. Thank you.

So how much debt did you pay off altogether?

About $330,000.

$330,000. Working as a psychiatrist, what was your range of income over the time period you were paying it off?

I started paying it off in residency, so that was around 40, I think. I started at 42,000, and now I make around 230, 250 a year.

And you paid it off over how long of a time period?

It took us about three and a half, four years?

Yeah, three and a half years. You hit it pretty hard.

I did. My husband can testify to that, yes.

What was the secret? How'd you do it?

Well, I took to heart in medical school to live like a resident after you became an attending. And, you know, I'VE always thought that debt was a great evil and it kept people down. So I intended in my heart, we purposed to get that debt down as soon as possible. So we did. We lived like residents, even after getting an attending salary. And I also moonlight, and that moonlighting job allowed me to pay extra on things. There's lots of little secrets.

I'll bet we could learn a lot from you. It sounds like you had quite a bit of intensity as you went through it. Did it take longer than you thought? Was it easier than you thought? What was your take on it? Now that it's all said and done.

You know, after it's all been over, it just flew by and it was a lot easier than I thought it was going to be, and I actually got it done. My original goal was 5 years, but we just hit it hard and time flew by and was such a relief to get rid of that debt.

What do you think about this whole process, Jonathan? Was this a. See, would you feel like you were an active participant in this, a passive observer? What was it like for you to see her take on that debt to start with and then wipe it out in such an intense way?

It was a fine process. We had a decent quality of life the whole time. We just never bought an expensive house and expensive cars and. But we still did some traveling and so forth and, you know, we enjoyed life. So it wasn't as bad as it might have sounded, but I'm glad we did. I mean, it's real nice now, you know, to have that money to throw at savings and retirement and things like that.

Were you guys ever tempted to carry the debt for a long time in hopes of investing and out earning what the loan was costing you or anything like that?

I kind of looked into that, you know, even in medical school, and no, my intention was just to get rid of the debt, and now I'm investing more. I think it was a psychological thing for me, of course, like, who knew what the stock market was going to do and those things, you know. But I'm glad I did it this way because now I'm free.

Yeah, you never know if it's going to be a 2019 or a 2008, do you?

Yeah, right.

Yeah, exactly. So what advice do you have for someone that's just like you were a few short years ago, staring at this big pile of debt and wondering if they can ever take care of it? What would you. What would you tell that person?

I would tell them to live simply and everything that you have over your cost of simple living put it into debt. And I do have an emergency fund, you know, the just in case. But anything over that emergency fund went into my student loan. I also refinanced using, I think, SoFi, which was a lead that I got off the white coat investor website, which I followed throughout and went back to read the book several times during residency and even as an attending, make sure I was following the right steps. I guess, simply put, live simply invest into the debt like you would invest into the stock market, because you really are paying off and paying into freedom. And then finally, always keep your eyes and ears open for opportunities to advance and get that debt paid off.

And don't forget how nice it feels to have it paid off. I mean, that's the goal, is that you have that great big income to throw at other things instead of dividing it up into a big house payment and car payments and credit card payments and furniture payments and all the different things people do that wind up just giving you an incredible amount of stress.

Yeah.

And it feels the whole world looks different when you don't have any debt.

I was putting, you know, $7,000, sometimes a month towards my debt. I'm sure it looked kind of funny.

Yeah, it was.

If anybody just was watching the absolute transaction history. But that's how we did it was just so anything over our basic needs went into debt.

Well, now you have 2000, 3000, $7000 a month put toward whatever you want. So what's next for you guys and your financial goals?

Actually, I'm going to defer to my husband. He's a carpenter and we've got some real estate ideas, so. Or not even ideas. We actually have bought a building in our little small hometown and we've refurbished it and put apartments in, so we're getting income in from that.

You care if I tell them how old you are?

No, I don't care.

Okay. She's 50. Just celebrated her birthday on Thanksgiving, so that plays into it. She looks like she's 28, but she's 50.

Yeah.

So we're thinking about retirement, you know, because there was no money in retirement with medical school and things like that, you took everything you had and put it into that. And so now we're very aggressive. And so our horizon's a little closer than a young doctor.

Yeah. Well, congratulations on your success. I mean, you clearly went to medical school and residency as a relatively non traditional student, and you still knocked out your student loans by 50, so that's pretty awesome. So it's really inspiring to. I'M sure a lot of the non traditional docs out there, so I appreciate you sharing that.

Well, thank you. Thank you for this opportunity and thank you sir for that book.

You're welcome. I'm glad it was helpful to you. Bye bye.

Bye bye.

All right. I hope you enjoyed hearing from them. You can actually see them if you go to our YouTube channel and you'll see these episodes also on YouTube, but I think there's some great takeaways there. First of all is just the simple idea that you can do this. $330,000 in debt, an income of 42,000 to $230,000 and they paid it off in three and a half years. It can be done. You can pay this stuff off, you can live like a resident, you can get rid of your debt. So I found it interesting that she thought it was easier than she expected to pay off the debt. I don't think that's the case for everybody, but a lot of times as you get the ball rolling and you get some momentum, you find that you can wipe it out quickly. Refinancing doesn't hurt either, and that's why we partner with so many of these refinancing companies. When you refinance your student loans, more of your payment is going to principal and less of it's going to interest, so you can pay it off a little bit faster. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do, for a fraction of the price of hiring a professional financial planner. The Fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school or residency, but never was. Fire your financial Advisor also has a version eligible for CME Credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the white coat investor can help. Keep your head up, 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. 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.