MtoM #93 - Dermatology Resident Dumps His Lease

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 93. Durham resident dumps his lease. Getting quality disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state or health status. And one in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we've put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart. If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com insurance and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this, and the White Coat Investor can help. All right. I have been telling you on this podcast for years that we will celebrate any milestone, any financial milestone you have accomplished. I will celebrate with you and use it to inspire somebody else to do the same. We have a new milestone today that we have never had on the podcast and I'm pretty excited about it. So let's get Mike on the line and talk about this milestone that he has accomplished. Well, our guest today on the Milestones to Millionaire podcast is Mike. Welcome to the podcast.

Thank you. Thank you so much for having me. It's been a long time coming.

It's awesome to have you on here. You know, we were chatting just before we started recording. You've actually listened to all of the Milestones podcast, so congratulations.

Yeah, absolutely. And then some too.

So that's the small feat. So very important.

Helps me stay focused financially, you know, so.

Yeah, well, focus is important, especially at the beginning. And we're going to be talking a lot about being at the beginning today. But let's tell everybody where you're at in life. What, what are you doing? What, what's your job? What do you do?

So I'm a third year or PGY3 second year dermatology resident. My wife, we recently got married three weeks ago now, is a. Thank you, PGY3 anesthesiology resident. So we don't have kids. We have a loving Bernadoodle who is about £100 and just a big fluff ball and that's our little family right now. So trying to work through some financial situations together in our married life.

What part of the country are you in?

So we're in the Midwest. Michigan. Born and raised here. Moved out a little bit, but yep, that's where we're practicing now. We're training.

Okay, cool. And you applied to be on this podcast a while back. Obviously, some things have changed since then. You've had a lot of recent changes in your life, but the milestone we're celebrating with you today is what most people would consider one of the early milestones. When you think about all the financial milestones that doctors go through, you have essentially taken care of a high interest debt. Let's talk about that. Let's talk about what you've accomplished.

Yeah. So I think it goes back to just kind of my upbringing. I was very almost spoiled in a way and kind of always had a nice new car every time I needed one. Didn't really realize the financial toll that took until it was me paying for it. And then once I caught on to that, I was like, okay, this needs to change. And it's hard. You go from driving a nice Jeep to hunkering down in a 2011 Nissan Xterra with 200,000 miles on it. It's a big change, but, you know, paying that off. I can't even tell you the relief that I got and how much happier I am just knowing I don't have that payment every month and I'm not really springing for a nice car. It just feels so appropriate right now for where I'm at in life.

Cool. So let's get into the deets here. I mean, when did you buy this Jeep? Was this when you finished med school? When did you buy it?

The Nissan? Yeah, so I bought it about 14 months ago. It took me a little bit longer than you said of the 12 months to pay it all off, but had a nice interest rate. I just wanted to get rid of it, get rid of all the monthly payments. I was over it. I wanted to start focusing on things that were more important to me, like investing and saving for my family. And so I was paying pretty aggressively down. I got it for about 7,000 and pay that all off in a year. 14 months.

Cool. And before that, what were you driving before you got the Xterra? That's what I want to hear about.

I had a beautiful 2018 Jeep Grand Cherokee that I loved to death. Saved me in a lot of bad winters up here in Michigan. Man, I missed that car. I dream about it still so often, but someday I'll get back to it.

When did you buy that car?

It was a lease in 2018.

A lease in 2018. So you walked in, you didn't even buy it. You basically rented it for three years. Yep. Okay, so you're what, a med student or. When did you get that?

Yeah, I was a med student. It was with the help of my parents, and then it kind of transitioned solely to me. I wanted to take more of that financial responsibility on moving into residency.

What was the payment, do you remember?

285. I can't remember the down payment, but it was pretty substantial.

So there was a down payment, and then it's 285 bucks a month to keep it. And of course, insurance. Yep.

Plus insurance. Absolutely.

Okay. So they hand you the payment when you get out of med school and say, you're going to pay for this now.

Yeah.

And that was a pretty good chunk of a resident.

Oh, yeah. It was, like I said, very substantial. And just thinking of, you know, how much that really eats into your monthly budget, it was like, this is crazy, you know, like, I don't. I'm not there yet. I don't need to be doing this. And it was a hard gap or a hard step downwards for sure, like I said. But if I can do it, trust me, a lot of other people can do it too.

Okay, so how'd you get rid of the lease? Did you wait until the lease was up? Did you try to get out of it early? What'd you do?

I tried to get out of it early and we ended up doing so just because I wasn't really driving. A lot worked out with the dealer and I was able to roll it in early, a few months early, you know, nothing crazy, but, like, I think like three or four months early.

So you get rid of that and you decide, I'm going to take a big step down. I'm going to go buy an old beater. And you, you bought that for 7,000, you said?

Yeah, in Asheville, North Carolina. Drove or flew down to the mountains and drove it back with my now wife.

Okay, so tell me about this car.

I love it. I don't know. Never thought I would, but it really is, I mean, just such a great car for us. We love to camp. All of our friends kind of have more steady jobs, marketing majors, and they're buying scamps or Class Cs or even sprinter vans. And so we try and, you know, outfit the Xterra a little bit so we're able to hang with them at the very least. And we do it comfortably. It's got about 190. No, 195. When I bought about 205,000 now and just hit a bunch of big repairs, actually. But there were things that were going to happen. The brakes, the wheel bearing, shocks in the back had to all be replaced. But I've been saving over time and just budgeting for that and building up that emergency fund, so it really didn't stink as much when I had to pay it because I knew I had been waiting for this moment.

Plus, you're saving $285 every month.

Exactly. Yeah.

And the truth is, you actually own something now. If you really wanted to, you could put that on Craigslist and sell it.

Right? Yeah. That's probably one of the most gratifying points of it all.

Yeah, that's cool. Well, I tell you what, your wife is going to be an attending anesthesiologist soon. You are going to be an attending dermatologist soon. You will not have to drive this car for that much longer. Right, right. And. And at that point, you start going whatever you want in. You know, you want a sprinter van, you save up for two or three months, and you walk in and you buy the stupid thing for cash. So the habit goes a long way, even if the actual dollar differences don't matter that much. So how is it doing in the snow up there in Michigan?

Oh, fantastic. Absolutely.

Great.

Yeah.

Now, a lot of people are afraid to get an older car to drive a beater, to drive something with 190,000 miles on it because they're afraid of repairs. They're afraid of it breaking down and stranding them. So in the time you've had this, have you ever been stranded?

No, absolutely not. Once. And I was that person. I mean, I read all your posts about, you know, buying the junker, buying the beater. I'm like, this guy's kind of crazy. There's no way. But you're right. I never got stranded. I've never had issues. Like, I've heard noises. I take it in when it gets fixed. I'm good. You know, it's. It's no big.

You gotta do a wheel bearing every now and then. It's true. You know, you have to do the brakes every now and then. It turns out that brakes don't last 250,000 miles. But unfortunately, you know, it's interesting, I mentioned on this podcast last week that I have been trying to buy a truck. I put in an order to buy an F250 about 11 and a half months ago. And literally just before I started recording that podcast, which, although everybody listened to this last week, I only Recorded it about a half hour ago. Just before I did that, I got this email from this dealership that I'm not going to get my truck at all. They literally aren't going to build it. So it's not all that easy to get new cars these days.

Yeah.

Over to a 2023. It's probably going to be months again before I can get it.

Yeah, I got an attending waiting for a Ford Maverick right now as well. Electronic Ford Maverick, Same problem.

Same problem. I got a buddy that just got a. That just got one of the new hybrid sequoias, was waiting a year and a half for it.

So it's just, you know.

But the truth is, down the road, not very far for you. You'll be able to order whatever you want. Hopefully by then they'll actually build it for you.

Right.

And buy whatever you want. This is very much a temporary thing, so. All right, well, let's. Let's talk about what inspired you to do this. What? I mean, you must have been becoming financially literate, reading something, doing something. What inspired you to start going, Maybe I ought to pay more attention to my finances.

The biggest thing we haven't talked about yet, which is the debt, the student loan debt. You know, I took out loans all the way through undergrad, through medical school, and I, to say the very least, was not smart about that loan money at all. You know, had an older brother who went to college, but didn't really learn the ins and outs of loans. It didn't really seem real to me. Didn't really know what I was getting into. In undergrad, I was really racking up a lot more debt than I should have been. Kind of picked up on it in medical school a little bit, but by that time, I mean, things were just piling up and up and I knew I had to do something. You know, started listening to you more and more during the pandemic when I was living with my now in laws, just trying to keep to myself and out of their way and kind of just reading more about you and all the information and content you put out. And I'm like, you know what? This is it. I got to do something. This is going to get way too out of control the more money that rolls through. So I got to do something now. And that's kind of what kickstarted it.

I have a feeling we're going to have you back on this podcast.

That's my goal. Yeah.

Tell people, you know, this is going to be fun because we're going to put you on the beginning. Right. Which is essentially now. And in a few years, we're going to put you back on having accomplished goal. Tell people about your student loans.

So combined between my wife and I.

Were about 800,000, $800,000 in student loans.

Most of that is from me. I think she had the very average medical school debt, no undergrad debt, but, you know, I just didn't. Like I said, I made a lot of dumb decisions growing up. Didn't really understand it.

How much of those are yours? 600 of them.

No, five.

500 of them. Okay, so let's do this. Let's bring you back on the podcast when you get back to Broken.

Heck, yeah.

And then again when the student loans are gone.

Absolutely.

Three episodes out of you we're gonna get. And everyone impressed by what you do. So what's your plan? What's the plan to take care of these student loans? Are you. You thinking about pslf? You thinking about, you know, living like a resident? What's your plan?

Living like a resident? I think keep on keeping on with what we're doing. I think you had a guest the other day who really kind of got past the resident phase of his career, but still was doing it and said a lot about just, I feel comfortable. And I really. And I feel that same way right now, you know, living on our dual income of not much, just resident salary. We're really comfortable. We travel, we credit card hack for points and whatnot. So my plan is going to be. Our plan is going to be get out of residency, continue to live the life we're living with just a smidge of inflammation, you know, for growing into that and aggressively pay down. I think that if we're smart about it, we can really be aggressive and get rid of them pretty fast. So it's just going to take some commitment.

So you guys get out of training when. How long till you're out of training?

2024. July 1, 2024. 2024.

So about a year and a half you'll be out.

Yeah.

And how long do you think it's going to take you once you get out to slay this student loan dragon?

You know, I've crunched the numbers. I think we could do it in three at most, depending on how aggressive we want to be.

Cool. Yeah, you guys will be paying a lot of taxes for sure. But even so, if you can keep your lifestyle anywhere near what you're living right now, you'll be able to throw money at those and get rid of them in a hurry. So Pretty awesome. Well, cool. Stay motivated and keep, you know, keep building your financial literacy. Make sure you do what you can to maximize your income. And, you know, the rest of it is. Is just writing checks to lender and it does go away.

That's what they say, at least. I don't know.

Well, this is going to be fun to have. Get the rest of the story on this debt.

Yeah, I'll have my wife on that episode, too, once we paid it all off, too.

That'd be great. We'd love to have her. But congratulations to you and the move you've made with the car. You're obviously getting started on your getting things under control with your finances. And like I've told people many times on this show, we. We will celebrate any financial milestone you have. And I sincerely mean that because the first steps are the hardest steps.

Absolutely.

And everything else gets easier as it goes. I can promise you that. Congratulations to you and thanks for being on the podcast.

Thanks, Dr. Dali.

All right. I hope you enjoyed that podcast as much as I did. I like having unique milestones on the podcast. If you'd like to come on the podcast, you can apply whitecoatinvestor.commilestones and we'll bring you on. Now we will celebrate the traditional milestones, the getting back to broke, getting a net worth of $100,000 or a million, or paying off your student loans or your mortgage, or becoming financially independent. I love doing that, too. But I love these unique ones, especially people that are relatively early in their career, relatively early in their financial journey. Maybe it was opening up a Roth IRA for the first time. Maybe it was, you know, cutting your grocery budget in half. I don't care what your milestone is. We can use it to inspire somebody else to be financially successful. And in this case, obviously, these docs have got a big challenge ahead of them. While they'll have big shovels eventually, they've got a pretty big hole to fill. And I'm looking forward to spending some time with them over the years and celebrating future milestones with them. But there's lots of people out there just like them with huge student loan burdens that are just finding their way in the financial world, that are just biding their time, trying to get through med school, dental school, trying to get through residency and get that high income that's going to allow them to actually start making progress toward their financial goals. It's wonderful to see them being inspired and becoming financially literate so they can hit the ground running. When they get that high income, getting quality, disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state or health status, and one in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart. If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com insurance and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this and the White Code Investor can help. All right, well, I hope you enjoyed that episode. We're going to have another one next week. Please tune in same bat time, same bat channel. Until then, keep your head up, shoulders back. You've got this. We can help you here at the White Coat Investor and on this Milestones to Millionaire podcast. See you next time. The hosts of the White Coat Investor.

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