Debt

[VailHaddock43]

I was wondering if anyone knows what the average timeline is for a podiatrist to pay off their debt and how that debt impacts other financial decisions such as buying a house, car, etc.

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[Bubuddy]

Best to ask in the Resident and Physician forum

 

[Weirdy]

I was wondering if anyone knows what the average timeline is for a podiatrist to pay off their debt and how that debt impacts other financial decisions such as buying a house, car, etc.

White coat investor.

Look up different types of loan repayments. Lots of good info on Google. Not making a dig at you, literally did this the other day. IBR, PSLF, etc

 

[VailHaddock43]

White coat investor.

Look up different types of loan repayments. Lots of good info on Google. Not making a dig at you, literally did this the other day. IBR, PSLF, etc

Must have not seen it, thank you for the info!

 

[heybrother]

(1) Read whitecoat investor.

(2) The averages don't really matter - everyone's situation is different. Some people are rich. Some people have a working spouse. Some people have kids. Average those people all together and you'll get a number that probably doesn't describe you.

(3) You can sort of control cost of living. Sort of. The simple truth is there's always a cost for living and even if you get the cheapest apartment, live on beans, etc - there's a cost to live and you've got 4 years with basically no income.

(4) What school you pick is probably the best indicator of your cost of living jokingly followed by your ability to cook for yourself. A night out at a bar is groceries for a week. A meal at your school cafeteria is also a trap.

(5) It seems like we're arguing over nickels here, but if I could buy an investment that would simply grow like your school interest will grow it would be one of the finest investments in the world. 6% a day, non-stop.

(6) Many people find it hard to invest even when they have more than adequate income. Forever ago, my sister made $150K as a pharmaceutical rep. I told her to save 20% or to save the 401k max - hell, save anything. She told me - how would I have any fun. So a person making $150K couldn't save $14K. Think about that. We didn't live in NYC or California.

(7) If you really want to pay the debt off you have to create a big stick. The only way to kill $300K on $120K is to use the difference between resident money - $40-50K and attending money $100-120K (or get a hospital job) to try and make big stabs. Honestly, what will benefit you most is increasing your income, but taking big wacks early will prepare you to more easily take big wacks later. Several years ago I experienced a nice income increase - I was so used to be being poor I saved the entire thing in a ROTH 401K. I literally never saw the money because I rerouted it before my grubby fingers could touch it.

(8) Do not buy a big expensive house. Do you know what people who buy $350K houses with $250K student loan debt and $120K income are - they are called "house poor" though really what they are is just poor. Houses have to be maintained. The second you buy it and get trapped in it during a pandemic you'll find things that need to be fixed. The awesome sofa your mom gave you won't go with your wife's living room vision. You'll want to upgrade it. Your wife will need a break from your kid and will want to send them to pre-school. Switches on the wall will just stop working - I'm literally listening to an electrician as I type this. "Time and materials cool?". Me - "ugh, sure." In some states you'll pay property tax - I literally wrote a check for $7000 last year. I have insurance if the house gets destroyed - amusingly, it costs more than the life insurance I have in case I die. The people who sold us the house paid for a home warranty on appliances for 1 year - within a month of moving in the oven and the garage door opener both died. The disposal died at 2 months. 8 repairs later the warranty company wrote us a check for 1/2 of the double-oven my wife wanted. The home inspection caught a broken water heater which was replaced and then promptly died because it was installed wrong. In short - the home warranty has replaced everything except the heater and the AC. There were like 20 broken sprinkler heads even though they were supposed to have been fixed since they were found during the home inspection. Fixing them cost like $300, but it dropped the price of the water bill by $100 which means they were crazy leaky. Everyone else's grass is so green - guess I should run my sprinkler - oh wow - a $300 water bill. While the sprinkler guy was doing his repairs he pointed out to me that my 7 live oaks haven't been cut in probably 10 years. I thought, he's right cause I had so many leaves in my yard I had to buy a blower-mulcher. Bagging by hand is for suckers. You don't what to know what tree cutting costs.

(9) The above was meant to be semi-comical, but once you start spending its hard to stop and nothing sucks money like a house. You will also find expenses that are real things that you never even knew about like life insurance. Do you know what disability insurance is?

(10) Jokingly, get married while you are young and poor. Suffer together.

 

[Redsting]

There are a lot of factors that come into play on who quick you can pay off the debt. I maxed out my loans like an idiot. I was in a high cost of living area for pod school. I didn't get a roommate. I ate out a lot. All because I was going to make "doctor money".
I came out with 315k in loans. By the time residency was done I was at 385k cause of interest.
I have had friends sign contracts for 70k plus production. How are you going to pay off 385k worth of loans on 70k? You're not.
I got lucky. I have loan repayment through where I work and make a enough to live off one paycheck and use the other each month to pay down my loan. I am 2 years out of residency and my loans are at 180k (would be lower but we bought a house). Plus I was gaining over $1,500 in just interest each month for a while.
Try to keep your debt to income ratio below 2. Below 1.5 is better.
I have another friend with 320k making about 120k a year. Thats 2.66 debt to income ratio. Its really hard to pay down loans and live your life (buy a house, travel, have kids etc). So lets say 320k at 6% interest that is $1,600 a month in just interest. You're not even touching the principle. 120k after taxes with no retirement or health insurance is about 7.7k. So you're down to 6.1k before you start to make any dent in paying it off and with out living at all. It might sound like a lot, but I promise it is not. And you need to be putting money a way for retirement as soon as you're down with school or you'll regret it.

Me and my wife prioritized student loans (until we bought a house and covid froze the interest). We will still pay it off in about 4 years from when I got the job.

Long story short: Keep cost of living low in school, don't sign bad contracts, prioritize paying off loans.

 

[VailHaddock43]

There are a lot of factors that come into play on who quick you can pay off the debt. I maxed out my loans like an idiot. I was in a high cost of living area for pod school. I didn't get a roommate. I ate out a lot. All because I was going to make "doctor money".
I came out with 315k in loans. By the time residency was done I was at 385k cause of interest.
I have had friends sign contracts for 70k plus production. How are you going to pay off 385k worth of loans on 70k? You're not.
I got lucky. I have loan repayment through where I work and make a enough to live off one paycheck and use the other each month to pay down my loan. I am 2 years out of residency and my loans are at 180k (would be lower but we bought a house). Plus I was gaining over $1,500 in just interest each month for a while.
Try to keep your debt to income ratio below 2. Below 1.5 is better.
I have another friend with 320k making about 120k a year. Thats 2.66 debt to income ratio. Its really hard to pay down loans and live your life (buy a house, travel, have kids etc). So lets say 320k at 6% interest that is $1,600 a month in just interest. You're not even touching the principle. 120k after taxes with no retirement or health insurance is about 7.7k. So you're down to 6.1k before you start to make any dent in paying it off and with out living at all. It might sound like a lot, but I promise it is not. And you need to be putting money a way for retirement as soon as you're down with school or you'll regret it.

Me and my wife prioritized student loans (until we bought a house and covid froze the interest). We will still pay it off in about 4 years from when I got the job.

Long story short: Keep cost of living low in school, don't sign bad contracts, prioritize paying off loans.

Is something like this the norm or is your story an outlier in your opinion?

 

[619]

Is something like this the norm or is your story an outlier in your opinion?

I will say this is an outlier. You can't go from $385K loans to $180K in 2 years with a podiatry associate income. Most Podiatrist are going to graduate residency and join a podiatry practice as an associate with $100K base salary (range is $80K to $120K depending on location) and bonus incentive (20%-30% after 3x collection of base).

You will likely not hit the bonus in the first year (so you make just your base salary) and even by second and third year, you may get $20K-$30K bonus. Living on $120K-$130K as an adult with student loans is not a lot. So most people are in income base payment (REPAYE or PAYE or whatever). So the payment is not touching the principle let alone the interest rate. Main goal is not to default.

Having a hospital job like @Redsting changes the above scenario.

 

[VailHaddock43]

I will say this is an outlier. You can't go from $385K loans to $180K in 2 years with a podiatry associate income. Most Podiatrist are going to graduate residency and join a podiatry practice as an associate with $100K base salary (range is $80K to $120K depending on location) and bonus incentive (20%-30% after 3x collection of base).

You will likely not hit the bonus in the first year (so you make just your base salary) and even by second and third year, you may get $20K-$30K bonus. Living on $120K-$130K as an adult with student loans is not a lot. So most people are in income base payment (REPAYE or PAYE or whatever). So the payment is not touching the principle let alone the interest rate. Main goal is not to default.

Having a hospital job like @Redsting changes the above scenario.

are hospital jobs few and far between for new grads?

 

[619]

are hospital jobs few and far between for new grads?

Very few get the jobs in Hospital or Multi specialty group. Most residency graduates will start out as an associate working for another podiatrist.

 

[heybrother]

Outlier. Doubly so. Most people won't have that income. Worse, people with that income often wouldn't bother to attack it. Guy could FIRE if he wanted to/keeps that up.

 

[Aviano91]

Is something like this the norm or is your story an outlier in your opinion?

What is true of today may not be true of 8 years from now. Just a grain of salt for you. It is difficult to predict.

 

[Weirdy]

What is true of today may not be true of 8 years from now. Just a grain of salt for you. It is difficult to predict.

Not that hard to predict when grads from 5-8 years ago are saying the same thing.

If the trend was leaning towards easier hospital/multispecialty jobs, we wouldn't be having this conversation or trying to inform pre-whatevers

 

[Aviano91]

Not that hard to predict when grads from 5-8 years ago are saying the same thing.

If the trend was leaning towards easier hospital/multispecialty jobs, we wouldn't be having this conversation or trying to inform pre-whatevers

I do not recall taking a side on the trend. Only that the past may not predict the future. Which is true. If it did, I would be filthy rich. We can only be sure of what is happening today. Unless you disagree? Maybe we are just confusing the semantics of it.