MtoM #8 - $450K Paid Off In 2.5 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 eight. $450,000 paid off in two and a half years. You know, if you'd like to come on the Milestones to Millionaire podcast, all you have to do is apply@whitecoatinvestor.com Milestones to be a guest on the show. Whatever your recent financial accomplishment has been, we want to celebrate it with you and use it to inspire your peers and colleagues. Whether it's you paid off student loans, gotten public service loan forgiveness, become financially independent, become a DECA millionaire. Whatever it is, we'd like to celebrate it with you. So apply to be a guest on the show. As a white Coat, you have valuable knowledge. Various companies want that knowledge, and they're willing to pay you for it. That's why we put together a list of recommendations for companies that pay you to take surveys. If you're looking for a profitable side gig for not too much effort, getting paid for surveys could be the perfect solution for you. You can make extra money, start a Solo 401 and use your medical knowledge to impact new products. One of the WCI columnists makes an extra $30,000 a year just doing these surveys. Sign up today and use a fraction of your downtime to make extra cash. Go to whitecoatinvestor.com mdsurveys you can do this, and the White Coat Investor can help. All right, we got a great guest on today. You're going to love this. Let's bring on Daniel. All right, our next guest on here is emergency physician Daniel Axelson. Welcome to the White coat Investor podcast.

Dr. Dalle, thanks so much for having me.

All right, so tell us about this. You paid off your student loans in 2020. How much did you pay off?

So between my wife and I, who are both physicians, we graduated medical school with just shy of $450,000 in medical school debt. The vast majority of that was mine. My wife did carry a small, small amount of medical school debt as well, but together we had just shy of $450,000 of med school debt. And we paid it off recently, and it feels amazing.

Congratulations. And how long did you take to pay it off?

I graduated in 2017, and we officially paid. Paid it all off, actually, just at the very, very end of 2019. So, like December 2019, going into 2020. So it was about two and a half years after I left residency that we paid it off.

Impressive and what was your average household income over that time period?

Good question. Combined between my wife and I, it was approximately 500,000. That's between two physicians. So, you know, undoubtedly many hands make for lighter work. So, you know, both my wife and I, being physicians, helped a lot, but.

It'S still an impressive sum. Paid off in just two and a half years. I mean, we're talking about dedicating 150, $200,000 a year to your student loans. $15,000 a month or so. It's no small feat, correct?

No. And, you know, and definitely, you know, it helps, as I said, to have. Have both. Both my wife and I be physicians, but it's still. We sat down together when I left residency in 2017 and really made a budget. Once we had a month or so's new attending salary worth of paychecks coming in, we made a budget. So we knew exactly how much we were going to have coming in every month and compared that to what our nominal expenses were at the time. We did buy a very modest condo for the two of us when I left residency, but we really didn't have, you know, an extravagant lifestyle, certainly beyond that. So we made a budget, and we knew how much exactly was coming in every month. We knew exactly what our monthly expenses were, and we were both on the same page. My partner, my now wife, we were both on the same page in that we really wanted to prioritize getting rid of our medical school debt. So every spare dollar that we had, once our monthly expenses were taken care of, once our retirement accounts were paid into and our monthly expenses were covered, every spare dollar went to paying back our medical school loans.

No vacations, no new cars in two and a half years. Nothing like that?

No. We got married in 2017. We took one honeymoon. We stayed in the U.S. we traveled kind of close to where my wife grew up. We did take a honeymoon, but outside of that, maybe some weekend trips here and there, we did not take any extravagant vacations. We both have been driving the same car that I've been in my car since 2007. She's been in hers since 2009.

No kitchen renovation, no wake boat, Nothing like that, huh?

None of the above. I think we both just really prioritize wanting to be free of debt first.

Impressive discipline. Congratulations on that. So was it easier or harder than you thought it'd be? I mean, you guys sit down a month out of training, come up with this budget, talk yourselves into it. Did it turn out to be easier or harder than you thought it Would.

Be, you know, I will say, when I graduated medical school and we were staring at that amount of debt, it was incredibly intimidating. Now, sitting on the other side of it, having paid it off, it was definitely easier than I thought it would be. It required discipline, no doubt, and it required, you know, like I said, getting down and sitting down and getting on the same page with my wife and really making a plan. But once we had that plan and we really had actionable steps that we felt like we could stick to, every month, it just kind of became routine. And the two and a half years went by and I would say it just was a whole lot easier than I thought it was going to be. Looking into the debt. When I graduated medical school, I thought, oh my gosh, periods of time during medical school and residency, I thought, I'm going to be in debt for years. But with making a plan and sticking to it and having some discipline, and it ended up being not nearly as hard as I thought it would be.

Was there anybody that kind of gave you a hard time that said, why are you driving a 2007 and living in this dumpy little condo? You're not only a doctor, you're two doctors. Anybody give you a hard time like that? Or were all your friends and family supportive of this rather unique lifestyle decision you made?

You know, by and large, most people were supportive. I would say. You certainly just going through life, encounter people here and there who would make the argument, oh, you got time and once refinance, you got a great rate and you can make more and invest and all this. I mean, you certainly hear those kind of arguments. But by and large, I think people were supportive of what we were trying to do.

So how does it feel to have your student loans gone?

Every bit as good as I thought it would. I probably personally am just a little bit debt averse just as a person. So I don't love the idea of having to owe a ton to a lot of different people. So it feels great to have those student loans gone. I mean, so much so that it really has encouraged us just in other areas of our life now to be mortgage debt free. And really it's driven us to want to be just completely debt free going forward.

Do you feel like it was a trial run to pay off the debt? Was a trial run for becoming financially independent?

That's a great question. I think, you know, I think while we were paying the student loans off, I don't think I thought of it that way. But now, absolutely. I mean, I think, you know, it's something we've proven to ourselves we can do with a plan, with discipline. So, absolutely, at this point, I would say it absolutely was a trial run. Yeah.

So now that you paid it off, are you increasing your lifestyle in any way? What are you doing now with the, you know, $15,000 a month that was going towards student loans? Are you just investing at all? Are you investing some and spending some, or where are you at now?

It's a little bit of a split. So we did upgrade. We welcomed our first little son here this year in 2020. So we did.

Congratulations.

Thanks. We did move into a bigger house. So we kind of took the jump into the suburbs and we did upgrade house. So that was kind of the one big thing that we did. But outside of that, now we have a slightly larger mortgage that we pay every month. We invest the rest. And my goal is to now really pay off our current mortgage as quickly as possible. So I think that's where some of our extra money will go as well.

So what advice do you have? Somebody that's sitting there where you were a couple of years ago, three years ago, just coming out of school, totally intimidating by owing 4 or $500,000 in student loans and wondering if they can do what you just did. What advice do you have for them?

The biggest piece of advice I would share is it is possible. I entered into medical school. I went through a series of probably not very financially savvy decisions. I went to a private, out of state medical school. I ended up doing a combined dual degree program. So I spent some extra time in medical school, incurring even extra debt. And so I left medical school, entered residency, and even, I think, by and large, spent a lot of time in residency. Not particularly financially savvy with these kind of things. I just sort of thought to myself, oh, the debt was sort of nebulous. I thought, whatever, I'll pay it off at some point. So if I was able to kind of hunker down and really kind of learn about this stuff and tackle it and make a plan and get serious about paying back debt and budgeting, if I was able to do it, anyone's able to do it. And it is possible it may involve some degree of delayed gratification. It certainly did in our case. You know, in our case, at least, you know, two and a half years after residency, we could have. Could have, in theory, been doing other things with those money. But if I can do it, it's absolutely possible.

Do you remember that day when you added it all up and Found out exactly how much you owed in student loans distinctly. What was that like the first time you did that?

It honestly was nausea, Mildly nauseating. I thought to myself, oh, my God, this is just my debt alone. And then I knew kind of my wife was bringing in a small amount as well. I thought, particularly at that time, I know where I was sort of just in understanding finances and debt, you know, and paying all this stuff back. It was just nauseating and intimidating. And I thought at the time, not knowing much, I'm going to just be in debt for decades was my frame of reference. And it just took time over the course of residency, really deciding to really try to attack and run at and learn all I could through your site, other resources, just deciding I wanted to take ownership of this situation and I didn't want to be in debt for decades. Little by little learning and little by little, I think I was able to turn my frame of reference around and feel more confident that I was able to actually tackle the debt.

Well, Dr. Axelson, congratulations on your success. Thank you for sharing it with us. To inspire the next generation of docs coming out with massive loans that they can't actually pay them off. I appreciate your time.

Thanks so much. Thanks for having me.

Okay, that was a great episode. Impressive amount of discipline to pay off $450,000 in only two and a half years on an income that's not that much higher than that. Yes, it's obviously easier to pay off $450,000 in student loans when you're making $500,000, but that is not that easy to do. That means well over half of your net income was going towards student loans for those two years. It takes a lot of discipline to do that, even on a high income. You know, that sort of debt is pretty intimidating, right, to owe that much money. But it turned out to be easier than he thought it was going to be and felt every bit as good as he thought it would. You know, it's interesting. People don't like stopping once they accomplish a goal like that. So I'm not surprised to see that he then turned to his mortgage as quickly as possible. At any rate, the message I want you to take from this sort of an episode is that it is possible to pay off your debt very rapidly. Okay, you do have to play some gratification. But if you can get your income up and you can be disciplined, you can get this debt paid off in just two to five years, and then you can live the rest of your financially awesome life in a very free way. As a White coat, you have valuable knowledge. Various companies want that knowledge and they're willing to pay you for it. That's why we put together a list of recommendations for companies that pay you to take surveys. If you're looking for a profitable side gig for not too much effort, getting paid for surveys could be the perfect solution for you. You can make extra Money, start a solo 401 and use your medical knowledge to impact new products. One of the WCI columnists makes an extra $30,000 a year just doing these surveys. Sign up today and use a fraction of your downtime to make extra cash. Go to whitecoatinvestor.com mdsurveys 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 later this week on the regular White Coat Investor podcast or next week 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.