Optometry not a good investment if you have more than $50,000 in federal loans

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Obtaining the OD degree nowadays is getting more and more expensive just like many other professional schools around the nation.

It is just not financially intelligent to use Optometry as an investment if you have to take out more than ~$50,000 in federal loans. Beyond $50,000 you better be doing it because of a personal calling/passion or you may be miserable. Jason K and others speak endlessly about this and it is true. People needs lessons in finance.

-Average employee salary in Optometry is around $95,000, starting is more like $80,000 but as all things it is highly variable based on many factors.
-Even though you may get paid around $80,000 about 30%-40% of this will go to taxes. (depending on where you live) So expect to take home around $52,000 a year @35% tax rate. (This is not a lot to pay student loans off of)
-You have to be flexible and be willing to move where there is a need of ODs after graduation if you want to make the average starting salary or more, Hint: its not near Optometry schools nor popular areas like Florida/Southern Cali/NYC.
-Scholarships and grants are little to none after undergraduate college.
-Federal subsidized loans were just cut so all loans are unsubsidized at 6.8% interest compounded continuously starting immediately after the loan was taken out.

This means you add 31.25% to your loan from your first year's expenses to the total you will have to pay back, 22.63% for 2nd year, 14.57% for 3rd year and 7% for your 4th year.

Use this debt wizard to make a rough plan of your future. http://mappingyourfuture.org/paying/debtwizard/
Do not just blindly go to professional school just because "it is the next step" or you cannot find a job. Optometry has traditionally been a profession of self-employment. Do not enter this field with your huge indebtedness and then look desperately for a job because you have no option of buying into a practice or starting your own because you mismanaged your finances. If you want to be an employee it is better for you to become a nurse or a PA. (less school, similar salaries)

Optometry is good if you really love it and are fine with spending many decades paying off your loans, or if you keep your debt low by living with your parents during OD school or by joining the military or by some other means. I know I may sound like I think I know everything but I hope this will be of some use to you.

Main issue is oversupply, private practices not being fully booked with patients. That has nothing to do with how much loan you have. If OD services were in high demand 200k amount would be nothing for a life time of financial & job security. Again, main issue is are there enough patients to go around for all the future ODs especially with all the new schools.

Originally Posted by Shnurek

Obtaining the OD degree nowadays is getting more and more expensive just like many other professional schools around the nation.

It is just not financially intelligent to use Optometry as an investment if you have to take out more than ~$50,000 in federal loans. Beyond $50,000 you better be doing it because of a personal calling/passion or you may be miserable. Jason K and others speak endlessly about this and it is true. People needs lessons in finance.

-Average employee salary in Optometry is around $95,000, starting is more like $80,000 but as all things it is highly variable based on many factors.
-Even though you may get paid around $80,000 about 30%-40% of this will go to taxes. (depending on where you live) So expect to take home around $52,000 a year @35% tax rate. (This is not a lot to pay student loans off of)
-You have to be flexible and be willing to move where there is a need of ODs after graduation if you want to make the average starting salary or more, Hint: its not near Optometry schools nor popular areas like Florida/Southern Cali/NYC.
-Scholarships and grants are little to none after undergraduate college.
-Federal subsidized loans were just cut so all loans are unsubsidized at 6.8% interest compounded continuously starting immediately after the loan was taken out.

This means you add 31.25% to your loan from your first year's expenses to the total you will have to pay back, 22.63% for 2nd year, 14.57% for 3rd year and 7% for your 4th year.

Use this debt wizard to make a rough plan of your future. http://mappingyourfuture.org/paying/debtwizard/
Do not just blindly go to professional school just because "it is the next step" or you cannot find a job. Optometry has traditionally been a profession of self-employment. Do not enter this field with your huge indebtedness and then look desperately for a job because you have no option of buying into a practice or starting your own because you mismanaged your finances. If you want to be an employee it is better for you to become a nurse or a PA. (less school, similar salaries)

Optometry is good if you really love it and are fine with spending many decades paying off your loans, or if you keep your debt low by living with your parents during OD school or by joining the military or by some other means. I know I may sound like I think I know everything but I hope this will be of some use to you.

40% going to taxes? this is a bit high of an estimate. Not even millionares pay this high of a tax. You are also listing on your taxes that you are paying interest to the state. Most students take out a 100k loan and are able to pay it back, not everyone lives at home with their parents. Also, it is clear that Optometry is going into the commerical business, so I don't understand your bit about private practice.

Originally Posted by Optomchick

40% going to taxes? this is a bit high of an estimate. Not even millionares pay this high of a tax. You are also listing on your taxes that you are paying interest to the state. Most students take out a 100k loan and are able to pay it back, not everyone lives at home with their parents. Also, it is clear that Optometry is going into the commerical business, so I don't understand your bit about private practice.

Try 45% of your paycheck if you live and practice in NYC for example and you make above a certain amount. Its 35% that goes to Federal, then you also have to include State tax, Local tax, Medicare, FICA and Social Security. That's why I said a range from 30%-40%, in fact I should make it to 45%. I don't know why you called me out on this. And yes, your student loan interest can be reported on your taxes but how much do you get back? 1%-5%? Tell me what are the numbers to show that it is actually significant. Also, to you it may be clear that optometry is going into a commercial business, but most people still work in private practice and not everyone will work commercial in the future so I don't understand you.

Originally Posted by Shnurek

Try 45% of your paycheck if you live and practice in NYC for example and you make above a certain amount. Its 35% that goes to Federal, then you also have to include State tax, Local tax, Medicare, FICA and Social Security. That's why I said a range from 30%-40%, in fact I should make it to 45%. I don't know why you called me out on this. And yes, your student loan interest can be reported on your taxes but how much do you get back? 1%-5%? Tell me what are the numbers to show that it is actually significant. Also, to you it may be clear that optometry is going into a commercial business, but most people still work in private practice and not everyone will work commercial in the future so I don't understand you.

Commercial will outweight private practices, whether you like it or not. 45% of your income does not go to taxes, you are being ridiculous. It will probably be around 25% or less given what tax loopholes you can find. The calculator on the site suggest 17% overall for $100,000 income.

http://www.moneychimp.com/features/tax_brackets.htm

Originally Posted by Optomchick

Commercial will outweight private practices, whether you like it or not. 45% of your income does not go to taxes, you are being ridiculous.

I think you are ridiculous and do not understand basic accounting.

http://webinfocentral.com/RESOURCES/TaxCalculator.aspx

Go type in $100,000 and you are left with under $50,000 in NYC. Mind you this is the worst case scenario where you are filing as a single person with no deductions with the highest taxing area in the country (NYC). Hence, my generous general range of 30%-40%. I know an anaesthesiologist that gives 45% of his pay to the government and he has many deductions and I have a friend that is an accountant. Like I said, it is about 30% - 40%, it can be 5-10% lower or 5-10% higher.

Yes, Federal tax itself is not so bad at 19.8% at $100,000 and 18.4% at $80,000 but its all the other mandatory crappola that piles on like Medicare (4.2%), Social Security (1.45%), FICA and state and local taxes which you completely left out and ignored for some unknown reason. Not to mention self-employment taxes if you lease the space from a commercial entity.

HOLY DOG CRAP! It is absolute AGONY reading some of these threads on here and I can not STAND IT ANY LONGER! The amount of gross misinformation that is put forth by so many people, especially Shnurek is astounding.

First of all, if you are spending 40% of your income on taxes, you are a damned idiot. My federal tax liability last month was 13% of my total salary. My state liability was about 3.3%. FICA was approximately 5.5. That adds up to about 22% of total income tax liability.

Secondly, while Shnurek does make a semi-legitimate point about the cost of an optometric education, to say that the most loan you should be taking out is $50000 is absolutely absurd.

You should take out loans no more than twice your starting salary. If the starting salary is $85000, you should take out loans totalling no more than $170,000 including your undergraduate education.

You should also take the 30 year repayment plan for your student loans. That DOES NOT MEAN YOU HAVE TO TAKE 30 YEARS TO PAY IT OFF.

But what it DOES do is allow you the cash flow in the early years of your like to hopefully buy that private practice while will ultimately allow you to make much much more than $85000. Then when you have more cash flow, you can put more money towards your student loans if you so desire.

My best advice to students on here is to NEVER PAY ATTENTION TO ANYTHING SHNUREK SAYS UNDER ANY CIRCUMSTANCES WHATSOEVER.

I don't know about all this but the three optometrists I shadowed (graduated in 2010 from SUNY, Puerto Rico, & NECO) respectively take home 85,000$$ or above so I guess there are MANY factors that go into it but don't get turned off by optometry bc SDN is not so accurate.


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Originally Posted by luckyfeet

I don't know about all this but the three optometrists I shadowed (graduated in 2010 from SUNY, Puerto Rico, & NECO) respectively take home 85,000$$ or above so I guess there are MANY factors that go into it but don't get turned off by optometry bc SDN is not so accurate.

America's Best, Cohen's, VisionWorks, etc all pay new grads b/w 80K and 105K. The income cited is only half the story. If they're in respectable private practice positions (which I doubt unless you hand picked them), then that's great - there should be more of that going around. If they're in a commercial mill, it really says nothing other than proving what is obvious; that commercial optometry has become the primary landing spot for new OD grads.

No one is saying that there are absolutely no respectable jobs for new grads. There are some, remember the lifeboat analogy? There are a few spots, but thousands upon thousands of current and future new grads. They'll all be trying to get onto the same small lifeboat. That comparison holds true. A few income quotes really doesn't change anything anymore than me coming on here discussing a few ODs who work in a dingy box somewhere. It's about the big picture of optometry, not the individual.

He's not THAT far off with his estimation of taxes, especially if you work as an independent contractor (which unfortunately most of you will initially). If you are not cheating the system as an independent contractor, expect to have to obtain a business license, and expect to have to pay self-employment taxes quarterly. Depending on your metro area, you may have to pay federal, state, county, and also metro taxes. I personally save 35% of my paychecks for tax purposes.

Originally Posted by KHE

HOLY DOG CRAP! It is absolute AGONY reading some of these threads on here and I can not STAND IT ANY LONGER! The amount of gross misinformation that is put forth by so many people, especially Shnurek is astounding.

First of all, if you are spending 40% of your income on taxes, you are a damned idiot. My federal tax liability last month was 13% of my total salary. My state liability was about 3.3%. FICA was approximately 5.5. That adds up to about 22% of total income tax liability.

Secondly, while Shnurek does make a semi-legitimate point about the cost of an optometric education, to say that the most loan you should be taking out is $50000 is absolutely absurd.

You should take out loans no more than twice your starting salary. If the starting salary is $85000, you should take out loans totalling no more than $170,000 including your undergraduate education.

You should also take the 30 year repayment plan for your student loans. That DOES NOT MEAN YOU HAVE TO TAKE 30 YEARS TO PAY IT OFF.

But what it DOES do is allow you the cash flow in the early years of your like to hopefully buy that private practice while will ultimately allow you to make much much more than $85000. Then when you have more cash flow, you can put more money towards your student loans if you so desire.

My best advice to students on here is to NEVER PAY ATTENTION TO ANYTHING SHNUREK SAYS UNDER ANY CIRCUMSTANCES WHATSOEVER.

Good to have you back K. I think your taxes may be understated though. Got to account for both business tax and personal taxes. My business S-corp paid about 20% last year. My personal income, however (which is what we all really care about) was taxed at about 37%.

This is will taking all the deductions I could including putting money away up front into a Simple IRA (pre-tax income). Part of the reason I get sodomized every year is because Uncle Sam penalizes you for being a good little boy and staying out of debt. I have everything from practice loans, school loans and even my home paid off. In return, I get to pay more in taxes since I have few deductions left unless I buy another unneeded $70,000 piece of instrument. Gotta love the US' totally unfair tax codes.

Of course this is not even counting the double taxation when purchaing items on the money you made that was already taxed. So in general, we pay way more in taxes. Probably close to 40-50% when it's all said and done.

Fortunately, in general, the newer you are and the more debt you have, the more deductions you have. So a theoretical $100,0000 income might leave with $70,000 (30%) after initial taxes. $2,000/month (I am firmly against take a lifetime to pay off school loans) will leave you $46,000/yr to live on. That's doble as long as you continue to live like a student.......for how long....??

If you do like most, and buy a home (after all you didn't work hard to become a doctor to live in a 800 sq foot apartment forever). That's another $2,000/month leaving you with $22,000/yr. If you don't continue to drive a beater, you'll have a car payment of probably $400 min. Now you've got $17,200 left for a years worth of food, cloths, entertainment, CE, etc..... Health insurance can be anywhere from $400/month to $2,000/month depending on your health and number of family members. So that alone could take up all of your remaining income.

Never underestimate how the system will screw you in taxes (and hidden taxes) while giving every lazy welfare person free housing, education, transporation, food and health care. Totally backwards system.

People don't listen to these naysayers. If you want it, go for it. The economy will always change.

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Originally Posted by KHE

HOLY DOG CRAP! It is absolute AGONY reading some of these threads on here and I can not STAND IT ANY LONGER! The amount of gross misinformation that is put forth by so many people, especially Shnurek is astounding.

First of all, if you are spending 40% of your income on taxes, you are a damned idiot. My federal tax liability last month was 13% of my total salary. My state liability was about 3.3%. FICA was approximately 5.5. That adds up to about 22% of total income tax liability.

Secondly, while Shnurek does make a semi-legitimate point about the cost of an optometric education, to say that the most loan you should be taking out is $50000 is absolutely absurd.

You should take out loans no more than twice your starting salary. If the starting salary is $85000, you should take out loans totalling no more than $170,000 including your undergraduate education.

You should also take the 30 year repayment plan for your student loans. That DOES NOT MEAN YOU HAVE TO TAKE 30 YEARS TO PAY IT OFF.

But what it DOES do is allow you the cash flow in the early years of your like to hopefully buy that private practice while will ultimately allow you to make much much more than $85000. Then when you have more cash flow, you can put more money towards your student loans if you so desire.

My best advice to students on here is to NEVER PAY ATTENTION TO ANYTHING SHNUREK SAYS UNDER ANY CIRCUMSTANCES WHATSOEVER.

ha yeah thanks for being the only sensible opinion on here.

(P.S. I sent you a PM for some advice)

Originally Posted by OATAcer

People don't listen to these naysayers. If you want it, go for it. The economy will always change.

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Ignorance truly is bliss.......

Originally Posted by Tippytoe

Never underestimate how the system will screw you in taxes (and hidden taxes) while giving every lazy welfare person free housing, education, transporation, food and health care. Totally backwards system.

There's the problem with America nowadays. It wasn't always like this. Socialism corrupts the nation from the inside out and its already at full speed ahead here. When grandpa says, "Back in my day things were better". Well they truly were. How is Australia's minimum wage 2x our minimum wage? Because they remain isolationist, capitalist and don't play world police. http://fauxcapitalist.com/2010/06/30...-than-the-u-s/ And mind you their currency is basically equal to ours. Also Canada's currency is stronger than American currency, how embarrassing, thanks liberals.

Originally Posted by Shnurek

There's the problem with America nowadays. It wasn't always like this. Socialism corrupts the nation from the inside out and its already at full speed ahead here. When grandpa says, "Back in my day things were better". Well they truly were. How is Australia's minimum wage 2x our minimum wage? Because they remain isolationist, capitalist and don't play world police. http://fauxcapitalist.com/2010/06/30...-than-the-u-s/ And mind you their currency is basically equal to ours. Also Canada's currency is stronger than American currency, how embarrassing, thanks liberals.

I enjoy that I can stay on my parents' medical insurance till I'm 26- don't tell me you don't take advantage of this policy. Not all liberal policies are bad.

Originally Posted by Jason K

Ignorance truly is bliss.......

Naysayer.

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Originally Posted by Tippytoe

Good to have you back K. I think your taxes may be understated though. Got to account for both business tax and personal taxes. My business S-corp paid about 20% last year. My personal income, however (which is what we all really care about) was taxed at about 37%.

This is will taking all the deductions I could including putting money away up front into a Simple IRA (pre-tax income). Part of the reason I get sodomized every year is because Uncle Sam penalizes you for being a good little boy and staying out of debt. I have everything from practice loans, school loans and even my home paid off. In return, I get to pay more in taxes since I have few deductions left unless I buy another unneeded $70,000 piece of instrument. Gotta love the US' totally unfair tax codes.

Of course this is not even counting the double taxation when purchaing items on the money you made that was already taxed. So in general, we pay way more in taxes. Probably close to 40-50% when it's all said and done.

Fortunately, in general, the newer you are and the more debt you have, the more deductions you have. So a theoretical $100,0000 income might leave with $70,000 (30%) after initial taxes. $2,000/month (I am firmly against take a lifetime to pay off school loans) will leave you $46,000/yr to live on. That's doble as long as you continue to live like a student.......for how long....??

If you do like most, and buy a home (after all you didn't work hard to become a doctor to live in a 800 sq foot apartment forever). That's another $2,000/month leaving you with $22,000/yr. If you don't continue to drive a beater, you'll have a car payment of probably $400 min. Now you've got $17,200 left for a years worth of food, cloths, entertainment, CE, etc..... Health insurance can be anywhere from $400/month to $2,000/month depending on your health and number of family members. So that alone could take up all of your remaining income.

Never underestimate how the system will screw you in taxes (and hidden taxes) while giving every lazy welfare person free housing, education, transporation, food and health care. Totally backwards system.

There is a modicum of truth in all of that but it applies to any business owner in any field and at the end of the day, I don't know of any practicing optometrists who would trade places with their patients on welfare.

Originally Posted by KHE

Secondly, while Shnurek does make a semi-legitimate point about the cost of an optometric education, to say that the most loan you should be taking out is $50000 is absolutely absurd.

You should also take the 30 year repayment plan for your student loans. That DOES NOT MEAN YOU HAVE TO TAKE 30 YEARS TO PAY IT OFF.

Dr. E, I just wanted to clarify something. I am repelling people from the profession that see it as "a way to get rich". I made the point that its not worth taking out more than $50k in federal unsubsidized loans if you are just investing in optometry and you are just doing it for the money. I am NOT stating that no one should take out more than $50,000 worth of loans under any circumstance. What I'm trying to do is to explain that if you have the long term passion and motivation to be an Optometrist then you should go for it even if you have to take out $200,000 in loans. But just be aware of your future financial situation.

Also, I disagree with your "cash flow" payback theories about how you should take the longest time paying back any debt that you can but I understand where you are coming from. Inflation making your debt smaller as the years go on, and tax write-offs.

Originally Posted by Shnurek

Also, I disagree with your "cash flow" payback theories about how you should take the longest time paying back any debt that you can but I understand where you are coming from. Inflation making your debt smaller as the years go on, and tax write-offs.

I have said repeatedly that you should take the longest possible repayment term but I have also said repeatedly that you do not necissarily have to take the whole term to pay it off.

The only way to make any real money in this business is to be a practice owner. Most students graduating are desirous of being a practice owner.

As such, you need sufficient cash flow in the early years of your professional life to allow you to purchase and/or start that practice. You aren't going to get there if you try to pay off a $150,000 loan in 8-10 years on a salary of $85,000. You need the flexibility.

Then, as you become established and you start actually making money you can put more towards the student loans if you so desire.

KHE's model makes PERFECT logical sense.

If you take out loans on a 10-year repayment terms...you are held to repay it in that period.

If you take out your loans on 30-year terms you can pay them back in 10 years if you feel like, but are not forced to in the sense of a 10-year agreement. Much more flexibility is available to you on 30 year terms when there is no penalty for early payoff.

Go ahead and do 10-years. When you get buried in a monthly payment that you'd rather have a bit smaller just see KHE's words in your minds-eye, "I told you so."

Originally Posted by KHE

I have said repeatedly that you should take the longest possible repayment term but I have also said repeatedly that you do not necissarily have to take the whole term to pay it off.

So is there any reason why you wouldn't take the 30 years and pay it back at your own rate? i.e. Is the interest rate going to be higher if you decide to go with the 30 year repayment plan?

Originally Posted by OpticalBlackOut

So is there any reason why you wouldn't take the 30 years and pay it back at your own rate? i.e. Is the interest rate going to be higher if you decide to go with the 30 year repayment plan?

Because it is compounded continuously and the interest accrues with time. And at 6.8% or 7.9% this is much greater than inflation.

Simple answer: the longer you take to pay it off the more you will have to pay off in total.

Originally Posted by thecgrblue

KHE's model makes PERFECT logical sense.

If you take out loans on a 10-year repayment terms...you are held to repay it in that period.

If you take out your loans on 30-year terms you can pay them back in 10 years if you feel like, but are not forced to in the sense of a 10-year agreement. Much more flexibility is available to you on 30 year terms when there is no penalty for early payoff.

Go ahead and do 10-years. When you get buried in a monthly payment that you'd rather have a bit smaller just see KHE's words in your minds-eye, "I told you so."

The standard loan period is 10 years, the 30 year term comes from consolidation and refinancing.

Originally Posted by Shnurek

Because it is compounded continuously and the interest accrues with time. And at 6.8% or 7.9% this is much greater than inflation.

Simple answer: the longer you take to pay it off the more you will have to pay off in total.

This is correct of course but again, the issue is cash flow. If you want to buy or a start a practice you are going to need positive cash flow which is going to be much much harder to attain if you have a massive monthly student loan nut to crack. Especially if it's self inflicted. The goal is to try to become a practice owner as quickly as you can because that is how you actually make real money which you can THEN use to pay off your student loans.

Originally Posted by Optomchick

Commercial will outweight private practices, whether you like it or not. 45% of your income does not go to taxes, you are being ridiculous. It will probably be around 25% or less given what tax loopholes you can find. The calculator on the site suggest 17% overall for $100,000 income.

http://www.moneychimp.com/features/tax_brackets.htm

Yeah right...

Originally Posted by PharmDstudent

Yeah right...

lol, like I said she has no idea of basic accounting nor do I agree with most of what she has to say. Its not overall, that's just federal income tax. KHE is smart he lives in a low state income tax state and probably doesn't have local tax rates and invests in a good accountant to maximize his deductions.

Originally Posted by KHE

This is correct of course but again, the issue is cash flow. If you want to buy or a start a practice you are going to need positive cash flow which is going to be much much harder to attain if you have a massive monthly student loan nut to crack. Especially if it's self inflicted. The goal is to try to become a practice owner as quickly as you can because that is how you actually make real money which you can THEN use to pay off your student loans.

This is an approach I might take upon graduation. Thank you for your advice. Working as an employee for somebody else doesn't allow you to use your autonomous license to the fullest extent of the law and doesn't give you access to the potential big bucks. Unless you don't care (like a lot of future ODs I talked to) then ya being an employee and slowly but surely paying off your loans is another path but like Jason K loves to talk endlessly about, that chosen path is greatly saturated.

Originally Posted by Shnurek

lol, like I said she has no idea of basic accounting nor do I agree with most of what she has to say. Its not overall, that's just federal income tax. KHE is smart he lives in a low state income tax state and probably doesn't have local tax rates and invests in a good accountant to maximize his deductions.

Right. That's just federal income tax. For example, in 2012, FICA is 7.65% and maxed out at $6,826.20 for $110,000. So you can add 7.65% to 21.26% overall tax if you're "single" or 17.06% if you file "married filling jointly" (http://www.moneychimp.com/features/tax_brackets.htm) if you make $100,000 in 2012.

I'm a chain and hospital pharmacist employee and file my own taxes, so I know the income tax system fairly well. Forms 1040 and Schedule A have everything in black and white!
The best advice that I can give someone on SDN is to write down what you think you can "earn" as a tax credit or deduct and then look into it to find out what you would qualify for.

Do your medical and dental expenses exceed 7.5% of your "adjusted gross income"? If not, then too bad.

Was your "adjusted gross income" over $109,000? If so, then you can't deduct mortgage insurance premiums. Too bad!

Sorry everyone... but you can't deduct student loan interest after your "modified adjusted gross" income exceeds $75,000 filling as a "single" or $150,000 as "married filling jointly".

I avoided AMT last year by only a couple grand... and I only made $170,000.


The key is to live in a low cost of living area or state. The more something costs you, the more you will pay in taxes whether it's paid via state income, property, or sales tax.

Originally Posted by Shnurek

lol, like I said she has no idea of basic accounting nor do I agree with most of what she has to say. Its not overall, that's just federal income tax. KHE is smart he lives in a low state income tax state and probably doesn't have local tax rates and invests in a good accountant to maximize his deductions.

You're joking, right? I live in Connecticut, one of the highest taxed state in terms of income tax there is.

But it doesn't matter. I used to live in Nevada where there is NO state income tax. Sounds great, right? Well....guess how much a gallon of milk is? There's no cows producing milk in Nevada so that has to be trucked in from somewhere. Guess how much car insurance is? Guess how much it costs to register your car? Guess how much an optometry license is?

Trust me...they will get their pound of flesh come hell or high water. So simply looking at state income tax rates is not a good idea.

As far as a good accountant, you're right on that. You need a good team of financial people advising you.

Originally Posted by Shnurek

This is an approach I might take upon graduation. Thank you for your advice. Working as an employee for somebody else doesn't allow you to use your autonomous license to the fullest extent of the law and doesn't give you access to the potential big bucks. Unless you don't care (like a lot of future ODs I talked to) then ya being an employee and slowly but surely paying off your loans is another path but like Jason K loves to talk endlessly about, that chosen path is greatly saturated.

You will only make money in this business (most businesses, really) by being the owner.

Originally Posted by PharmDstudent

The key is to live in a low cost of living area or state. The more something costs you, the more you will pay in taxes whether it's paid via state income, property, or sales tax.

Thanks for the tax tips From someone that understands the system.

Originally Posted by KHE

You're joking, right? I live in Connecticut, one of the highest taxed state in terms of income tax there is.

But it doesn't matter. I used to live in Nevada where there is NO state income tax. Sounds great, right? Well....guess how much a gallon of milk is? There's no cows producing milk in Nevada so that has to be trucked in from somewhere. Guess how much car insurance is? Guess how much it costs to register your car? Guess how much an optometry license is?

Trust me...they will get their pound of flesh come hell or high water. So simply looking at state income tax rates is not a good idea.

Oh, OK I thought NY and California have the highest state income taxes. I haven't looked into the exact percentages. Also, sales tax wise, property tax wise etc. New Hampshire is looking better and better every day lol.

Well ya if you live in Las Vegas, I'm sure all of those costs are sky high because of local taxes and other crappola. Except for the OD license well that's a statewide thing.

Originally Posted by Shnurek

lol, like I said she has no idea of basic accounting nor do I agree with most of what she has to say. Its not overall, that's just federal income tax. KHE is smart he lives in a low state income tax state and probably doesn't have local tax rates and invests in a good accountant to maximize his deductions.




This is an approach I might take upon graduation. Thank you for your advice. Working as an employee for somebody else doesn't allow you to use your autonomous license to the fullest extent of the law and doesn't give you access to the potential big bucks. Unless you don't care (like a lot of future ODs I talked to) then ya being an employee and slowly but surely paying off your loans is another path but like Jason K loves to talk endlessly about, that chosen path is greatly saturated.

I never said it was more than Federal tax. 17% federal tax plus state taxes and medicare does not add up to 45%, however.

The point is that you can't live your life saying, well I don't want to make more money because then I'll pay more taxes. Most medical students take out a 200K loan, I'd say anyone in Optometry taking out 100-150K loan would be fine. But that's just the research I've done and I'm not an expert.

Originally Posted by Optomchick

Most medical students take out a 200K loan, I'd say anyone in Optometry taking out 100-150K loan would be fine. But that's just the research I've done and I'm not an expert.

Fine is a subjective word. But yes you will be "fine" in that you will not be living on the street most likely but personally I am against this whole taking out astronomical loans and being in high debt thing in the first place. The finance/bank/MBA/government guys love the fact that students have to pay them insanely high percentages of interest on the loans they take. They sit in their offices doing nothing except watching the paychecks come in and making sure you pay them what you owe + interest.

This whole taking out more student loans than your yearly salary thing is a relatively new phenomenon that didn't exist just 10-15 years ago even, when tuition was way cheaper. So who knows for sure if everyone that takes out that much will be OK.


(This is undergraduate tuition but professional school tuition follows this trend very similarly)

You can clearly see the real estate "bubble" on the chart but the tuition just keeps skyrocketing upwards.

shnurek, quit acting like a wise guy. If you didn't live in a state with optometry school you would have still gone to optometry school and paid out of state tuition just like many others. Also, quit worrying about what others should do with their money, you are not their financial adviser. Where did you get this 50k max number, let me guess because that is how much you owe. If you had 100k loan you would have set that as the maximum. It all revolves around you, your way is the right way to get education everyone else is wrong.

Originally Posted by Shnurek

Fine is a subjective word. But yes you will be "fine" in that you will not be living on the street most likely but personally I am against this whole taking out astronomical loans and being in high debt thing in the first place. The finance/bank/MBA/government guys love the fact that students have to pay them insanely high percentages of interest on the loans they take. They sit in their offices doing nothing except watching the paychecks come in and making sure you pay them what you owe + interest.

This whole taking out more student loans than your yearly salary thing is a relatively new phenomenon that didn't exist just 10-15 years ago even, when tuition was way cheaper. So who knows for sure if everyone that takes out that much will be OK.


(This is undergraduate tuition but professional school tuition follows this trend very similarly)

You can clearly see the real estate "bubble" on the chart but the tuition just keeps skyrocketing upwards.

Well the reality is my school costs $32,000 each year and while my parents have been nice enough to cover my housing and expenses, they don't have the money to pay for my tuition. So it's either take out a 150K loan or chose another career. I'm one of the lucky ones that got a scholarship for undergrad, so I'm starting off with zero debt. A lot of students are in a worst case scenario than me, but they are still going to risk it and go to Optometry school. You are extremely lucky that you go to a state school with low tuition, but not everyone lives in New York and attends SUNY so there must be another way AKA 150K-250K loans that they managed to pay back.

Originally Posted by Optomchick

I never said it was more than Federal tax. 17% federal tax plus state taxes and medicare does not add up to 45%, however.

The point is that you can't live your life saying, well I don't want to make more money because then I'll pay more taxes. Most medical students take out a 200K loan, I'd say anyone in Optometry taking out 100-150K loan would be fine. But that's just the research I've done and I'm not an expert.

You're arguing finances with a first year optometry student who lives with his parents.

Originally Posted by CL Doc

You're arguing finances with a first year optometry student who lives with his parents.

Ya and apparently they pay for some of his tuition, so he's a rich student who lives with his parents. go figure.

I haven't brought my personal finances into this because this is an issue way larger than me or your simpleton classification of me. You guys can do whatever you want with your money but I'm here bringing many facts to the table. I got the $50,000 figure from financial advisers stating that 8% of your gross income should be used to pay off student debt. This is also reflected on this website: http://mappingyourfuture.org/paying/debtwizard/

Originally Posted by q1we3

shnurek, quit acting like a wise guy. If you didn't live in a state with optometry school you would have still gone to optometry school and paid out of state tuition just like many others. Also, quit worrying about what others should do with their money, you are not their financial adviser.

That's a bold assumption to make.

I am here trying to help future students to decide what is best for them. Many practicing ODs say that students need more lessons in finance/investing especially with the present economic environment.

Originally Posted by CL Doc

You're arguing finances with a first year optometry student who lives with his parents.

I agree. Don't listen to people especially 23 years old. Just trust your instincts. Focus on your health and well being and let god guide you in life.

Sent from my Galaxy Nexus using Tapatalk

Originally Posted by Shnurek

Thanks for the tax tips From someone that understands the system.

I got dinged this year for trying to deduct my mortgage insurance premium of $410. I knew I couldn't deduct student loan interest or medical expenses, but mortgage insurance premiums, too? Geez?!

So on top of federal and FICA taxes, Medicare is roughly 1.45%.

I have state income taxes, too (http://www.revenue.louisiana.gov/sec...come.aspx#riit), so I get to add another 2% which increases to 6% over $50,000, which is 4.75% overall at an income of $100,000.

Sooooo how much is that now?
21.26% from federal + 7.65% from FICA + 1.45% from Medicare + 4.75% from my state at $100,000, which equals 35.11%!!!!


After it's all said and done, depending on the state (http://www.retirementliving.com/taxes-by-state), you could be paying 40% in "income taxes".

Originally Posted by PharmDstudent

Sooooo how much is that now?
21.26% from federal + 7.65% from FICA + 1.45% from Medicare + 4.75% from my state at $100,000, which equals 35.11%!!!!


After it's all said and done, depending on the state (http://www.retirementliving.com/taxes-by-state), you could be paying 40% in "income taxes".

Exactly what I was saying!

Originally Posted by PharmDstudent

I got dinged this year for trying to deduct my mortgage insurance premium of $410. I knew I couldn't deduct student loan interest or medical expenses, but mortgage insurance premiums, too? Geez?!

So on top of federal and FICA taxes, Medicare is roughly 1.45%.

I have state income taxes, too (http://www.revenue.louisiana.gov/sec...come.aspx#riit), so I get to add another 2% which increases to 6% over $50,000, which is 4.75% overall at an income of $100,000.

Sooooo how much is that now?
21.26% from federal + 7.65% from FICA + 1.45% from Medicare + 4.75% from my state at $100,000, which equals 35.11%!!!!


After it's all said and done, depending on the state (http://www.retirementliving.com/taxes-by-state), you could be paying 40% in "income taxes".

Yes, expect to pay 30-35% in taxes including state/FICA/Medicare + self employment taxes.

Six years out now, and have two outstanding loans still. House and Student loans. I agree with KHE to go the thirty year route, and pay off early if possible (mine is locked at 2.25%). Previously I didn't qualify for student loan deductions, child tax credits, Roth IRA's because I made too much even when my wife made $0.

So I started deferring money to SEP IRA's for my business to lower my total income down (putting about $35,000/yr into SEP). It helped qualify me now for student loan deduction ($2400), child tax credits ($2000) and Roth IRA's (max it out for both of us).

I think when I looked at the percentage it was around 21% in taxes. I know I'll pay the taxes on the SEP IRA money at some point in the future, but at least I get credits/deductions now. Just playing the system.

I think it's great that Optomchick's parents can kick in some costs. Also, going to a private school for undergrad is a costly investment when a four year public school will work just fine.

Originally Posted by Ryan_eyeball

Six years out now, and have two outstanding loans still. House and Student loans. I agree with KHE to go the thirty year route, and pay off early if possible (mine is locked at 2.25%). Previously I didn't qualify for student loan deductions, child tax credits, Roth IRA's because I made too much even when my wife made $0.

So I started deferring money to SEP IRA's for my business to lower my total income down (putting about $35,000/yr into SEP). It helped qualify me now for student loan deduction ($2400), child tax credits ($2000) and Roth IRA's (max it out for both of us).

I think when I looked at the percentage it was around 21% in taxes. I know I'll pay the taxes on the SEP IRA money at some point in the future, but at least I get credits/deductions now. Just playing the system.

I think it's great that Optomchick's parents can kick in some costs. Also, going to a private school for undergrad is a costly investment when a four year public school will work just fine.

ya I have a job on weekends too so I should be able to pay for some food/gas costs. There's NO way I can pay the $32,000 tuition though (will have to take out loans). And the Pomona, CA area is cheap at least, I've seen some rooms for $600 a month for a master room plus own bath, so that helps. I have no idea how some people can afford tuition on top of high rent lol.

Originally Posted by Optomchick

ya I have a job on weekends too so I should be able to pay for some food/gas costs. There's NO way I can pay the $32,000 tuition though (will have to take out loans). And the Pomona, CA area is cheap at least, I've seen some rooms for $600 a month for a master room plus own bath, so that helps. I have no idea how some people can afford tuition on top of high rent lol.

Ya that's a good way to do it. I have friends that will graduate with $200,000 worth of debt and they don't care about working part time or during the summer lol. I will have much less debt and I am still work part time during the year and am working now during the summer. Here's a tip to people in or about to start opto school: try working for ophthalmologists, they pay more

Originally Posted by Shnurek

Here's a tip to people in or about to start opto school: try working for ophthalmologists, they pay more

+1 but still not enough, unfortunately.

Originally Posted by swtster

+1 but still not enough, unfortunately.

In the long run, you still make the most as the owner of a business.

Originally Posted by Ryan_eyeball

In the long run, you still make the most as the owner of a business.

I was actually referring to being a student working part-time for an ophthalmologist, but yes, I also agree.

Originally Posted by swtster

I was actually referring to being a student working part-time for an ophthalmologist, but yes, I also agree.

my part-time job isn't optometry related. do you think that I would be okay graduating without working for an opt on my own? I feel like there's enough practice during the rotations?

Originally Posted by swtster

I was actually referring to being a student working part-time for an ophthalmologist, but yes, I also agree.

My apologies. In my experience ophthalmologists do pay their tech's better.

I know you will hear different OD's perspectives but I would rather just hire a tech to refract since its the most time consuming part of the exam. Unfortunately in my state they will not allow the OD to delegate the subjective refraction to an unlicensed individual. Even though I know I could do a refraction in 2 mins per eye, most patients just expect you to take your time & get it "just right" for them.

Originally Posted by Optomchick

my part-time job isn't optometry related. do you think that I would be okay graduating without working for an opt on my own? I feel like there's enough practice during the rotations?

I would highly recommend working as a pre-testing technician or optician selling glasses. I find this experience invaluable when it comes to trouble shooting problems with glasses. Also, I'll place a recommendation to an optical to prevent headaches from happening in the first place.

Also you have an opportunity to learn business aspects from a practice (good and bad traits). No one will teach you insurance billing in school, or how to deal with an upset patient/customer. You can role play all you want in school, but nothing replaces real life experience.