Yes, it is possible to get your loans paid in a year.

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UnderwaterDoc

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This one is more to encourage the medical students out there.

I've been out a year, and today I sent what will be my last student loan payment. Here's how I did it.


- Got out with 220K in debt at 6.8%.

- I share expenses with my fiancee (we have no kids yet), and my monthly bills are around 2K.

- I make 215ish/h, depending on RVU, and I work between 160-170 hours per month. I don't have state income tax. This means that every month I have around 20K (after taxes and expenses) that I have been dutifully burying into my loans (it also means that I have saved very little money and have put very little towards retirement).

- I live comfortably but nowhere near extravagant. I drive a 6 year old compact car that's paid for. My computer is 7 years old. I have traveled a few times over the past year but not internationally. I bought most of my furniture at IKEA and my wardrobe is not from the fancy stores. I do 90% of my shopping at Amazon.

- That's basically it.


I'm sure a lot of you disagree with my strategy and my lack of putting money away for retirement (I am a faithful reader of The White Coat Investor and I can see the steam coming out of his ears), however to me being debt free was most important. I now plan to aggressively save for a house (and yes for retirement).

Hope this serves to encourage you all that there is a light at the end of the tunnel.

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What do you mean steam? I'm totally impressed. $220K in a year is a fantastic accomplishment. You should send me a guest post about how you did it.

I encourage people to live like a resident and put a huge percentage of their newfound attending income toward building wealth. I'm much less particular about whether that money goes toward retirement accounts, student loans, or a house downpayment. A 6.8% guaranteed investment is a fantastic return.

Congratulations again! You are rare among docs and should be very proud of your accomplishment.
 
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Thanks for the kind words! I plan to have a very large beer to celebrate later today. :banana:
 
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So unless I am wrong, your wife's salary helped quite a bit, as yours would not cover your loan. Especially since you have those pesky things like taxes, eating and heat to worry about.

However it happened, congratulations! I'd say more than 1 large beer is in order.

Is it possible to pay off a similar loan in a year as a single person? Or would you have to live in a shoe box while working at a FSED in Texas?
 
So unless I am wrong, your wife's salary helped quite a bit, as yours would not cover your loan. Especially since you have those pesky things like taxes, eating and heat to worry about.

However it happened, congratulations! I'd say more than 1 large beer is in order.

Is it possible to pay off a similar loan in a year as a single person? Or would you have to live in a shoe box while working at a FSED in Texas?


Not sure I understand. We share the monthly expenses equally. Her entire contribution to "the cause" was 24K over a year, which basically would mean an extra month of payment for me if she wasn't around. She has her own loans that she is paying aggressively as well.
 
I totally misread your math. I read 215 salary, not 215/hr. My mistake. Again, congrats!
 
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I made the same error first parse, but then figured it out when I saw that the math didn't work that way.

Congrats! Thanks for being a great example and proof that it can be done! Enjoy that beer!
 
Thank you for sharing

Did you do IBR or PAYE or loan refinancing during residency up to this point?
 
Thank you for sharing

Did you do IBR or PAYE or loan refinancing during residency up to this point?

IBR the whole time. I paid the bare minimum during residency because I could not afford anything else. I moonlit extensively during third year but I saved most of that money for a rainy day.

I thought about consolidating, but once I had signed on for the job and knew what I'd be paid I figured the loans would be gone in a year if I lived like a resident, so it didn't seem worth going through the hassle.

Also, something I found out (which maybe everybody knew except me), if you take out another mortgage on your paid-off-home you will be subject to closing costs, best offer I had for these costs was in the 5-6K range and that was after looking at several banks, so I said screw it. You CANNOT get a home equity loan (which is not subject to such exorbitant fees) if your property is paid off. I had thought about such a loan because then I could write off the interest, but decided against it when I learned about the fees.
 
Really impressive! Way to stick with it.
 
That's really great to hear. I'm on track to pay 220 in loans off in three years and I thought I was being aggressive. Luckily thanks to wci I refinanced with sofi and cut my interest rates from 6.8% to 3.4% which allowed me to change my priorities a little. Regardless, I'm jealous you already got that monkey off your back.


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And THAT is freedom! So awesome...I'm inspired, thanks

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So unless I am wrong, your wife's salary helped quite a bit, as yours would not cover your loan. Especially since you have those pesky things like taxes, eating and heat to worry about.

However it happened, congratulations! I'd say more than 1 large beer is in order.

Is it possible to pay off a similar loan in a year as a single person? Or would you have to live in a shoe box while working at a FSED in Texas?
He said post-tax he was pulling 20k and that his monthly expenses were 2k. That puts him at a claimed 240k in a year, with expenses of 24k. That extra 4k amounts to little more than a rounding error on an income that large.

As a single person, I survive on less than 20k a year post-tax. It's certainly doable, so long as you don't let your lifestyle inflate with your salary until you've paid off the debt, and are in a specialty that pays high enough for you to pull figures similar to the OP.
 
Congratulations Underwater! An important point for anyone looking to replicate this is his point about moonlighting extensively and putting it into a rainy day fund. Building up a cash reserve is crucial for avoiding having to take out high interest loans to deal with emergencies or taking the tax hit from pulling out of your retirement investments.
 
- Got out with 220K in debt at 6.8%.
I am supper impressed. Even if you put all of your earnings towards this and just living off your wife's income, you must be pulling in 325K+/yr. Great discipline.

I paid off all of my loans in the 1st year, but only had a shade over 100k. Not a big feat when I was pulling in 225K+ after taxes
 
Kick ass man. That's insane. I thought I was doing good with 10k/mo, but 20k?! Damn.
This one is more to encourage the medical students out there.

I've been out a year, and today I sent what will be my last student loan payment. Here's how I did it.


- Got out with 220K in debt at 6.8%.

- I share expenses with my fiancee (we have no kids yet), and my monthly bills are around 2K.

- I make 215ish/h, depending on RVU, and I work between 160-170 hours per month. I don't have state income tax. This means that every month I have around 20K (after taxes and expenses) that I have been dutifully burying into my loans (it also means that I have saved very little money and have put very little towards retirement).

- I live comfortably but nowhere near extravagant. I drive a 6 year old compact car that's paid for. My computer is 7 years old. I have traveled a few times over the past year but not internationally. I bought most of my furniture at IKEA and my wardrobe is not from the fancy stores. I do 90% of my shopping at Amazon.

- That's basically it.


I'm sure a lot of you disagree with my strategy and my lack of putting money away for retirement (I am a faithful reader of The White Coat Investor and I can see the steam coming out of his ears), however to me being debt free was most important. I now plan to aggressively save for a house (and yes for retirement).

Hope this serves to encourage you all that there is a light at the end of the tunnel.

Bad ass. Way to go.
 
Very nice work!

Does this mean you now have to change your screen name to IntheblackDoc?
 
Very nice job!
 
This is great. Now that you've paid these loans off, treat yourself to something.
 
This is great. Now that you've paid these loans off, treat yourself to something.

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Congrats on staying focused!

I just paid off my 2 smaller loans and am halfway through the big kahuna. I would be done by now but life got in the way. I had to replace the wife's car, had the Honda Black Death in the AC, mine was on its last legs after college, med school, residency, and a year on the job. The stork paid us a visit along with some medical bills. Pulled the trigger on buying a house, good market, good deal, multiple break ins in the rental neighborhood. And finally, the wife went back to school full time. Let's just say, I can't tell you how much having a well funded emergency fund has made things easier.
 
Great job, trust me it will put you well ahead of your peers!

I minimized my school debt best I could, went to a four year residency, moonlit a bunch, and left residency debt free plus had enough to make a house down payment.

I missed out on some retirement saving then, but I quickly made up for it and then some. Also put off marriage and kids, but those came later without regrets.

Spend more, have some fun, but don't spend too much and get into a position where you have to work to pay for items. When that happens, your work owns you.... Woke enough to live comfortable and save plenty for retirement. Find something you enjoy and let work be something you enjoy forever...

Take the investor up on his offer to write a guest story; he is a wealth of information and your story has the ability to greatly influence our peers.
 
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