MtoM #80 - Dual Physician Couple Pays off Loans and Becomes Millionaires

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 80. Dual physician couple pays off student loans and becomes millionaires. I estimate that 80% of doctors need, want, and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. All right, we've got a doc coming on today with a great interview. You know, you ever wonder what you should do if you hit two milestones at once? Well, this doc didn't. He applied to come on and talk with us on the Milestones to Millionaire podcast about both milestones, and I think you'll find it to be a very interesting episode. Let's get him on the line. All right. Our guest today on the Milestones to Millionaire podcast is Andy. Welcome to the podcast.

Thanks, Jim. Glad to be here.

Tell us your specialty and how far you are out of training.

I am in family medicine. I'm a primary care provider and I am almost seven years out of training.

Almost seven years out. And what part of the country are you in? The Southeast or Intermountain west or what?

I'm in Texas.

Texas. All right, and what milestone are we celebrating today? It sounds like we got two of them to celebrate.

That's right. I paid off my medical school loans and became a millionaire at the same time.

Awesome. It's pretty cool to knock two of them out at once. It's going to have to be a very packed episode to talk about both of these, though. Why don't we start with talking about your net worth? Tell us about your debts and assets and about your net worth to start with.

So, yeah, I calculated this again this morning, and net worth came out to 1.2 million. The only liabilities that we still have. We do have a mortgage. We've got about a little less than 400,000 left on our mortgage. We've got about 40,000 left on some solar panels that we installed a couple of years ago. And then we just bought a new minivan because our family grew.

Okay, that's exciting. Congratulations on that.

Thank you.

Now you're using we pronoun. So tell us about your partner.

Yeah, so my wife is also a physician. She's a hospitalist. So this everything that we talk about today, paying off loans and net worth is definitely the two of us combined. We work together to achieve those goals.

Okay, so seven years, $1.2 million. What did you start at when you guys came out of training? What was the lowest this net worth ever was?

We had $550,000 in school loans, and when we came out of residency, we up and moved to Hawaii for a few years. So we had $30,000 in credit card debt as well, because we had to buy a whole bunch of stuff to get out there.

So you're close to $600,000 in the hole when you started, and now you're up to $1.2 million. I mean, that's a swing of $1.8 million in just seven years. That's pretty awesome. Congratulations.

Thank you.

So what was your average income between the two of you in this time period together?

It stayed pretty consistent. We've been pretty much between 400 and 500,000 a year over that time. It varied a lot between the two of us. I started out at a federal health center making 135,000, and I'm currently making almost 370,000. And then my wife started out at 300,000 as a hospitalist, but she's working more part time, and because of maternity leave and the kids and things like that, she's between 100 and 200,000.

Okay, and tell us about. Let's talk a little bit now. We'll turn the page a little bit. Let's talk about the debt you mentioned. I think you said earlier, $550,000 in student loans. Tell us about that. How'd you end up with that? Tell us about your schooling and how you felt about that debt when you came out.

Yeah, we both went to Caribbean medical school, so definitely the expense was a little bit higher than probably the average student. I had the majority of the debt. I had about 375,000, and my wife had just under 200,000 when we came out of residency. So, yeah, it was just a lot of. I mean, besides tuition, I was in New York for my rotation, so there was a lot of eating out and bar tabs and things like that. That seemed fun at the time, but probably not the best idea financially.

So a lot of people consider going to school in the Caribbean to be a pretty big gamble. Now, this has obviously paid off for you. Guys, I mean, here you are, seven years out of residency, millionaires. This has worked out very, very well for you. Do you think it's a gamble to go to a Caribbean medical school? What would you tell somebody that's considering doing that?

I don't think gamble's the right word. Cause that means you're leaving it all up to chance. I think it's hard. You're definitely a couple steps behind your U.S. counterparts throughout the whole process. But if you put the work in and you get the grades and you do well on your boards, then you are almost as competitive as a US student. I do have a lot of colleagues who did not get residency spots though, so there's definitely some risk there.

Have you heard any horror stories from those who came out owing $300,000 like you and and then didn't match?

I don't know any of them really closely. I've kept in touch a little bit with them and they all can still find fairly high paying jobs as MD consultants. So it's definitely not the end of the world, but won't make as much as you can getting into clinical medicine for sure.

All right, so at what point did you guys come up with a plan? I mean, you had to get together. Here you are owing close to $600,000. You go to Hawaii, did something change, and you decided we gotta do something about this or how did that process work?

Yeah, I think we got there, we realized what this hole that we were in, we sat down, we made a budget, and we really just started a lot of auto payments. Really. We started putting basically $6,000 a month towards our loans. And that number grew as the income grew as well. But it was really all about just chipping away at it and staying with it. And even though we were in a high cost of living area, we didn't spend a lot of money if we didn't need to. So most of our money went towards paying off debt.

Which one are you more excited about? Are you more excited about being millionaires or more excited about being rid of your student loans?

For me, the debt for sure. I'm very excited to have paid off the loans. I have become very debt averse over the past few years. My wife might be more excited about the millionaire status. I don't know.

How did you balance? Deciding how much to pay off on debt and how much to invest? And how'd you make that decision?

We kept it pretty equal, honestly. I think because we were just on cruise control with paying off the debt. Anything that was left over at the end of the month, we would kind of split up between the debt and investing. So we did put some money into the stock market, and we've been maxing out the backdoor roths and Ford 401ks and all that other stuff. But we didn't go crazy with the investing yet because we wanted to get the majority of that debt out of the way.

What do you think was the hardest part of this whole process? Was there a point when you lost hope or felt like you might never get there or had a particularly difficult obstacle to overcome or. What was the hardest part?

Yeah, I think those first couple years, you look at your loans and first it's 375, and then you look a few months later and it's like 360. And it just. That big number doesn't seem to be coming down much. But I think really, once you get going and you just stay the course, it just gets easier and easier because the number comes down quicker and quicker. And then as you start throwing bigger chunks at it, it really. You get that good positive feedback and it feels so good, and then you just keep going. So probably seeing those debt numbers not come down much initially was a little discouraging, but it got better.

Did you guys always agree on stuff or do you have any good arguments or fights about what to do with the money over the last seven years?

No, we're really good about it. We've kind of split up roles in our house. My wife runs the show. We kind of joke around. We say she's the CEO of the house, so she makes sure the kids are going where they need to go and that everything's squared away. And she's in charge of researching all the big purchases and contractors and all that stuff, whereas I took on the CFO role and really did most of the invest and paying off the debt. And I think we really just trusted each other, and so far it's worked out really well for us.

Do you feel like you had to make any significant sacrifices along the way, or did you find it all to be pretty easy and straightforward?

It's always in the back of your mind that you shouldn't be spending on stuff that you don't really need. So I still feel that way, which is probably a good thing, but I think that was the main thing. We didn't miss out on anything that we really, really wanted, but we certainly couldn't just spend, spend, spend, either.

What advice do you have for somebody else? Like you say, it's a dual physician couple. They Owe a ton of money. Five, six hundred thousand dollars. This is you guys seven years ago. What advice do you have for them?

I think what worked out well for us was sitting down early on, making that budget, saying that we need to put this much towards the debt every month, and then putting everything on auto payment really helped, because then it's just mindless. You don't even think about that money. It's just gone and paying, paying off those debts. So I think that's a big thing. Auto payment. We've definitely been frugal, but I can't say that we've truly lived like residents. We have let ourselves loosen the purse strings a little bit, which I think makes it more tolerable as well. If you're letting yourself have some fun and enjoying some of that income that you're bringing in, I think that's important too, just so that you don't get too burnt out on just paying somebody else all your money. So those are my two big points, I guess.

Well, congratulations. You guys have done a fantastic job. You should be very proud of yourselves. Not only have you met one huge milestone, you've met two. And so this is great. Congratulations to both of you. Thank you for coming on to the podcast and sharing with others and inspiring them.

Thank you.

Hope you enjoyed that episode as much as I did. Those guys are doing great. I mean, look at that. Paid off student loans within seven years, became millionaires within seven years, and on a trajectory to just do incredible things financially throughout their lives. They should be super proud of themselves because they've done a really, really great job. You know, what lessons can we learn? Well, I think an important one is moderation in all things, right? Not only have they preserved their marriage, they found something that works for them, them and their family. Right? You notice that she was making more initially, now he's making more, and they've kept their income up. They've been investing, they're paying off their debts, you know, just awesome. Just killing it. So a lot of great things and lessons you can take away from that. I estimate that 80% of doctors need, want, and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you're getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. If you would like to come on the Milestones to Millionaire podcast, you can do so. Apply@whitecoatinvestor.com Milestones we don't care what milestone you've achieved, we'll celebrate it with you. Till then, keep your head up, shoulders back. You've got this and we can help. See you next time on the podcast.

The hosts of the White Code 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.