Estimating future income based on 700k of student loans

[2TH MVR]

Appreciate the in depth reply doc. I know everything and anything about BMW, have been working on them since junior year of high school.

My reasoning for buying vs leasing is that if I buy a car for 35k vs lease a 50k car, my payments will be similar and after 3 years for the lease, I have to trade the car back to the dealership and find something else. At least with financing I will have some form of asset that I can have to show for all the payments I made. With a lease I also won't be able to play around and swap out too many parts without getting tricky. Most of all with the lease is that their lease offers as advertised are very low mileage.

For what it is worth, I wouldn't touch a used 7 series with a 10 foot pole no matter what point of my career I am in

When I had 2 PP locations .... I leased the Porsches. You can't write off the entire lease, but a majority of the lease, all consummables, maintenance, etc were written off through the business. I did this for many yrs. Leasing makes sense if you can write it off as a partial business expense. Leasing does not make sense if you are doing this personally unless you are like @charlestweed who likes new cars every 3 yrs and have factored in longterm depreciation.
Leasing works if you are thinking short-term ownership. Owning works if you are thinking longterm ownership.

Now in Corp. My cars are all paid off. Nothing beats the feeling of not having any debt.

One more thing about leases. If you like the car .... you could always pay the residual at the end of the lease and purchase the car. The residual has to be in line with the value of other like cars in the used market.

Also. Leases have the disadvantage on mileage limitations. You want more annual mileage? Your lease will be higher. Any damage to your leased car? You pay for that.

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[yappy]

why I stay out of dental town. I think I will become more pessimistic and hate my job more if I keep reading DT lol.

DT is the worst. The snake oil CE ads match the quality of the average board member. Members are constantly complaining about nonsense; by all rights they should have probably never became dentists or been in healthcare.

 

[SCallergydoc]

I'm scared I'm following a similar path. My cost of living will be dirt cheap at my GPR next year and I know that spending the extra 10k on an 2020 M340i will put a bigger smile on my face than the 2018. I justify it because I know no matter my financial situations having a car like that will make me the happiest person alive

If you get joy from "things" you will never have enough and never find true happiness

 

[Alpha Centauri]

If you get joy from "things" you will never have enough and never find true happiness

Quote me in 5 years and see how I'm doing

 

[LFA20]

If you get joy from "things" you will never have enough and never find true happiness

Eh...

 

[P7898]

I commend you on at least making an effort to see the financial picture. My question is. Is dentistry really worth all this extreme budgeting, toiling, living below your means, hoping no other financial complications occur (recessions, health issues, covid, home, marriage, divorce, job issues, practice issues, etc. etc.).

It is REALLY difficult to save money over the long haul. People always say they will save, but LIFE HAPPENS. Marriage is expensive. Children are expensive. Life is expensive.

My advice. Consider 300K to 350K your maximum debt. Look into the military. Look into the other scholarship situations. Look into public health afterwards for loan repayment solutions. Get out of Cali. Locate rural/ semi rural to work in.

Dentistry is a job. Not a passion. It's a means to an end. The end is living LIFE to it's fullest. Living life is not working 25 yrs to pay off a ridiculous loan, living severely below your means, and HOPING to save 1 million dollars for the tax bomb.

I would say $300k including specialty if you decide.

 

[LaughingGas]

I would say $300k including specialty if you decide.

that's like.... free dental school + non-paid specialty

 

[OrphanageCaretaker]

Oh, I didn't know you have a hobby in fixing cars. I can only do minor modifications like running wires to add a constant 12v power outlet in the trunk, installing a Qi wireless charger inside a center console, swapping wheels etc. But I have zero knowlegde about fixing the engine. In your case, buying a used car is not a bad idea and it should be a fun project for you to work on every weekend. Just keep in mind that making modifications to the car may void the warranty.

I like to lease cars because I don't want to drive the same old body style for a long time. As you know, BMW and Mercedes change the body styles every 7 years. Another reason for leasing is German cars depreciate very rapidly. The lease payments that I had made over 3 year period pretty much covered the depreciated amount. For example, I only pay around $55k ($5k down + 35 payments of $1400 a month) for a car that has a MSRP of $110k. After 3 years, I don't have to list that used car for sale. I just return it to dealer and get a new one.

You got ripped off for your lease payments.

 

[P7898]

You got ripped off for your lease payments.

Says USC.... I don't think those are anything crazy charlestweed.

 

[charlestweed]

You got ripped off for your lease payments.

You would lose a lot of mone when you change to new car every 2-3 years. You would lose even more money if you buy (vs leasing) a car and then try to list it for sale (or trade it in) 2-3 years later. That's the luxury that I can afford for having additional income for working extra days (on the weekends) in a month. To enjoy life and to get what you want, you have to throw some money away. Life is too short. People like to have different things in life. Many people have spent thousands of dollars to travel around the world. Many people throw away money on gambling....or other expensive hobbies. For me, I want to change cars every 2-3 years because I get bored of cars very easily.

Another problem with buying is you tend to care more about the car that you own and you end up paying a lot of money to maintain and to fix little things. With leasing, I don't care because I don't own it. On the previous Tesla that I leased, there was a front bumper damage from hitting the side of my garage. When I brought the car in for a routine service, the Tesla service person saw the damage and quoted me $4k to replace the entire bumper. I declined and I just used touch up paint to cover the damaged area. When I returned the car at the end of the lease, I expected Tesla to charge me a couple of grands for the damage. Guess what? Tesla didn't charge me anything....just a $430 disposition fee (which is a standard fee for every lease return)....and that's it.

Only buy car, if you plan to keep it more than 5 years. And the car has to be a reliable one like Lexus, Acura, which will give you less headache (because its warranty already expired) to maintain/repair it. BMW and Mercedes, especially the 7 series and the S classes, are not reliable but they are eye catching and fun to drive.

 

[Cold Front]

I came across an article relating to this topic earlier today, and felt it was appropriate to share it here. Mind you, this is an article from MarketWatch.... a publication owned by Dow Jones. They probably looked up the state of the profession from financial point of view (relative to student loans), and in summary think the current cost of dental education has more downside than upside in the long run.


’I thought dentists had some of the best job security’: More dental students are having second thoughts

'I thought dentists had some of the best job security': More dental students are having second thoughts

The average amount of debt dental school students take on is over $290,000.

www.marketwatch.com

 

[OrphanageCaretaker]

You would lose a lot of mone when you change to new car every 2-3 years. You would lose even more money if you buy (vs leasing) a car and then try to list it for sale (or trade it in) 2-3 years later. That's the luxury that I can afford for having additional income for working extra days (on the weekends) in a month. To enjoy life and to get what you want, you have to throw some money away. Life is too short. People like to have different things in life. Many people have spent thousands of dollars to travel around the world. Many people throw away money on gambling....or other expensive hobbies. For me, I want to change cars every 2-3 years because I get bored of cars very easily.

Another problem with buying is you tend to care more about the car that you own and you end up paying a lot of money to maintain and to fix little things. With leasing, I don't care because I don't own it. On the previous Tesla that I leased, there was a front bumper damage from hitting the side of my garage. When I brought the car in for a routine service, the Tesla service person saw the damage and quoted me $4k to replace the entire bumper. I declined and I just used touch up paint to cover the damaged area. When I returned the car at the end of the lease, I expected Tesla to charge me a couple of grands for the damage. Guess what? Tesla didn't charge me anything....just a $430 disposition fee (which is a standard fee for every lease return)....and that's it.

Only buy car, if you plan to keep it more than 5 years. And the car has to be a reliable one like Lexus, Acura, which will give you less headache (because its warranty already expired) to maintain/repair it. BMW and Mercedes, especially the 7 series and the S classes, are not reliable but they are eye catching and fun to drive.

I know exactly what you mean, I have a leased BMW currently, my very good friend of mine is a broker so I know the deals roughly of what cars are out there rn, I was looking into the S450 amg package and the deal was 2k down 36 months for $880 and the car is $94k msrp, I just think the dealer screwed you out of a good deal. That's all. I lease my cars and love having fun with them and returning them 3 years later for a newer model. I'm a huge car buff. What's your take on the Taycan? I think it's a MUCH better daily than the Tesla. I know Porsche's aren't the best for leasing, but I know the Taycan 4S is 5k down 36? or 42 months? can't remember for $1400 a month.

 

[charlestweed]

I know exactly what you mean, I have a leased BMW currently, my very good friend of mine is a broker so I know the deals roughly of what cars are out there rn, I was looking into the S450 amg package and the deal was 2k down 36 months for $880 and the car is $94k msrp, I just think the dealer screwed you out of a good deal. That's all. I lease my cars and love having fun with them and returning them 3 years later for a newer model. I'm a huge car buff. What's your take on the Taycan? I think it's a MUCH better daily than the Tesla. I know Porsche's aren't the best for leasing, but I know the Taycan 4S is 5k down 36? or 42 months? can't remember for $1400 a month.

Wow, $880 a month for an S class is a very good deal. I didn't know an S Class costs under $100k. The last S550 that I leased had an MSRP of $105k and that was in 2005. I’ve never gotten any deal that was less than $1200/month. My lease payments are higher because I drive 20k miles per year.

Taycan is a beautiful car and that’s the only thing that it is better Tesla. People buy it for status symbol. It has a much shorter range (200 miles vs Tesla’s 402 miles). If you live in a cold weather state, which requires the car’s heater to be on all the time, its range decreases significantly. You cannot fast-charge it like the Tesla. Because of the lack of supercharging network, you can’t use the Taycan for a long road trip. I’ve used my Tesla for family road trips very frequently. It doesn’t have self-driving feature, which I need for my daily commute to work. I have driven cars with this self driving feature since 2007 and I can’t go back to drive a car that doesn’t have it. The Taycan is too small (limited cargo space and leg room) for my family of 4. The Taycan’s screen size is tiny and the user interface is horrible. Tesla’s center screen keeps getting better over time because it constantly gets the OTA updates (at least 10 times in a year).

 

[Type2Fiber]

700k in debt to take home 50k is mind numbing. This is literally the craziest thing I have ever seen on this site. Do not, for any reason, do this. This type of debt for school should be illegal

I do not understand how you clearly have baseline financial literacy yet are actually considering this. I hope this is a troll

 

[DMD12345]

You would lose a lot of mone when you change to new car every 2-3 years. You would lose even more money if you buy (vs leasing) a car and then try to list it for sale (or trade it in) 2-3 years later. That's the luxury that I can afford for having additional income for working extra days (on the weekends) in a month. To enjoy life and to get what you want, you have to throw some money away. Life is too short. People like to have different things in life. Many people have spent thousands of dollars to travel around the world. Many people throw away money on gambling....or other expensive hobbies. For me, I want to change cars every 2-3 years because I get bored of cars very easily.

Another problem with buying is you tend to care more about the car that you own and you end up paying a lot of money to maintain and to fix little things. With leasing, I don't care because I don't own it. On the previous Tesla that I leased, there was a front bumper damage from hitting the side of my garage. When I brought the car in for a routine service, the Tesla service person saw the damage and quoted me $4k to replace the entire bumper. I declined and I just used touch up paint to cover the damaged area. When I returned the car at the end of the lease, I expected Tesla to charge me a couple of grands for the damage. Guess what? Tesla didn't charge me anything....just a $430 disposition fee (which is a standard fee for every lease return)....and that's it.

Only buy car, if you plan to keep it more than 5 years. And the car has to be a reliable one like Lexus, Acura, which will give you less headache (because its warranty already expired) to maintain/repair it. BMW and Mercedes, especially the 7 series and the S classes, are not reliable but they are eye catching and fun to drive.

That Tesla example is solid. Remindme! in 15 years reddit bot when I can start affording cars

 

[mmc12]

700k in debt to take home 50k is mind numbing. This is literally the craziest thing I have ever seen on this site. Do not, for any reason, do this. This type of debt for school should be illegal

I do not understand how you clearly have baseline financial literacy yet are actually considering this. I hope this is a troll

crazy is right.

The guy in this video is a recent 21 year old college grad making 160K a year as a software developer (I assume there's even more room for salary growth). Given his age, lack of debt, and potential for compound interest on his investments, I would say he would end up ahead of most dentists.

 

[charlestweed]

crazy is right.

The guy in this video is a recent 21 year old college grad making 160K a year as a software developer (I assume there's even more room for salary growth). Given his age, lack of debt, and potential for compound interest on his investments, I would say he would end up ahead of most dentists.

For this young man to earn such good salary, he has to work and live in one of the most expensive zip code in the country, where the average home price is over $1million dollars. I am not sure if he can find a job outside of San Jose that pays him that much. A dentist can easily earn a similar income in places like Houston, where the average home price is only $300k. And for this young man to buy a house in San Jose, he will have to borrow $700k- $1million from the bank. So he will end up having the same debt amount as the dentists. The only difference is he has a 4 year headstart.

This young man seems to be a very responsible person. He ate rice and bean and worked during his college years. Even with such good salary, he plans to get a very average car.....$30-50k car. Many people would go out and buy a much more expensive car than that. If a dentist is just as repsonsible (ie hustle and live like a student for a couple of years) as this young man in the video, he/she should have no problem paying back the student loan and have a very bright future.

There are dentists who make $120-150k a year and there are dentists who make over $1million a year. Dental license is simply a "ticket" that allows you practice dentistry. With $700k debt, you have to think big. Planing to make $150k/year for the rest of your life and relying on the IBR program to pay off the student loan debt are not thinking big. OP, I didn't mean to criticize you. When I was at your age, I also thought like you.... and that was to assume the worst case scenario. I am just an average dentist....I charge low fees because that's the only way for my practice to stay openned in this oversaturated market.

 

[aggie-master]

I know exactly what you mean, I have a leased BMW currently, my very good friend of mine is a broker so I know the deals roughly of what cars are out there rn, I was looking into the S450 amg package and the deal was 2k down 36 months for $880 and the car is $94k msrp, I just think the dealer screwed you out of a good deal. That's all. I lease my cars and love having fun with them and returning them 3 years later for a newer model. I'm a huge car buff. What's your take on the Taycan? I think it's a MUCH better daily than the Tesla. I know Porsche's aren't the best for leasing, but I know the Taycan 4S is 5k down 36? or 42 months? can't remember for $1400 a month.

I just tried to do that on the Mercedes website and they quoted me $1700 a month for the cheapest S450 lease on the lot of my closest dealer. That is a crazy price difference.

I'm trying to be less materialistic when it comes to things like cars and currently drive a vehicle that cost less than 50k brand new but there is a little part of me that wouldn't mind leasing a 100k car.

 

[Molar Whisperer]

I just tried to do that on the Mercedes website and they quoted me $1700 a month for the cheapest S450 lease on the lot of my closest dealer. That is a crazy price difference.

I'm trying to be less materialistic when it comes to things like cars and currently drive a vehicle that cost less than 50k brand new but there is a little part of me that wouldn't mind leasing a 100k car.

If you have the right business entity (PP), you can lease one and write it off. My sister (PP outside of Dallas, TX) had the dealership send a new car to her parking lot and drove her old one off...easy peasy.

 

[OrphanageCaretaker]

I just tried to do that on the Mercedes website and they quoted me $1700 a month for the cheapest S450 lease on the lot of my closest dealer. That is a crazy price difference.

I'm trying to be less materialistic when it comes to things like cars and currently drive a vehicle that cost less than 50k brand new but there is a little part of me that wouldn't mind leasing a 100k car.

That's why I don't go to dealerships anymore to get a car. Only to test drive them, maybe. I didn't even test drive my current car, my friend had a crazy good deal and so I just got it. But yeah, a broker gives you a great deal, especially if you're close with them. DO NOT pay $1700 for that S450. You can practically get a Maybach S600 for that price lmao.

 

[PikminOC]

There are a few member dentists here that with their business acumen .... they could blow away any amount of DS loan. The majority of the members here have been pretty united in advocating for reasonable DS debt. I mean ... come on. It's common sense to invest in your education with the least amount of borrowed funds.

Interesting story. Recently I played golf with 3 old duffers who teach at MWU-Arizona. Nice individuals. They were complaining that they ONLY received a 2-5% raise THIS year. Where I work (DSO) .... the general dentists were all asked to take a 10% cut in pay due to covid. Interestingly .... us specialists were allowed to keep our same salary. Most likely reason. Specialists bring in more production vs. the gps. Back to MWU. I think we can all agree where the money for their raises will be coming from.

This is not what I see in private practice. Even dental specialist took a major hit as as their offices has to be closed due to covid..

 

[PikminOC]

You would lose a lot of mone when you change to new car every 2-3 years. You would lose even more money if you buy (vs leasing) a car and then try to list it for sale (or trade it in) 2-3 years later. That's the luxury that I can afford for having additional income for working extra days (on the weekends) in a month. To enjoy life and to get what you want, you have to throw some money away. Life is too short. People like to have different things in life. Many people have spent thousands of dollars to travel around the world. Many people throw away money on gambling....or other expensive hobbies. For me, I want to change cars every 2-3 years because I get bored of cars very easily.

Another problem with buying is you tend to care more about the car that you own and you end up paying a lot of money to maintain and to fix little things. With leasing, I don't care because I don't own it. On the previous Tesla that I leased, there was a front bumper damage from hitting the side of my garage. When I brought the car in for a routine service, the Tesla service person saw the damage and quoted me $4k to replace the entire bumper. I declined and I just used touch up paint to cover the damaged area. When I returned the car at the end of the lease, I expected Tesla to charge me a couple of grands for the damage. Guess what? Tesla didn't charge me anything....just a $430 disposition fee (which is a standard fee for every lease return)....and that's it.

Only buy car, if you plan to keep it more than 5 years. And the car has to be a reliable one like Lexus, Acura, which will give you less headache (because its warranty already expired) to maintain/repair it. BMW and Mercedes, especially the 7 series and the S classes, are not reliable but they are eye catching and fun to drive.

Did you get another Tesla at the end of the lease?

 

[yappy]

This is not what I see in private practice. Even dental specialist took a major hit as as their offices has to be closed due to covid..

It really depends on the state. Some states have barely been affected while others are still largely locked down.

 

[PikminOC]

It really depends on the state. Some states have barely been affected while others are still largely locked down.

What state didn't close down dental offices for even one month?

 

[charlestweed]

Did you get another Tesla at the end of the lease?

Yes....a different color model S. A year later, I leased a model X for my wife and she loves it. In a month or two, Tesla will release new model S and model X with a redesigned interior and triple motors, which allow the car to go 0-60 mph in 2 seconds. I plan to get them when the current leases end. Will never go back to a gas car again.

 

[charlestweed]

It really depends on the state. Some states have barely been affected while others are still largely locked down.

I am in CA, which is one of the strictest states. I only had to close my offices for less than 2 months (March 17th to May 4th). The corp offices I work for also closed the ortho dept for 2 months but their general dept have stayed opened the whole time during the pandemic.

 

[PikminOC]

I am in CA, which is one of the strictest states. I only had to close my offices for less than 2 months (March 17th to May 4th). The corp offices I work for also closed the ortho dept for 2 months but their general dept have stayed opened the whole time during the pandemic.

2 months no income is alot

 

[PikminOC]

Yes

Yes....a different color model S. A year later, I leased a model X for my wife and she loves it. In a month or two, Tesla will release new model S and model X with a redesigned interior and triple motors, which allow the car to go 0-60 mph in 2 seconds. I plan to get them when the current leases end. Will never go back to a gas car again.

When you are returning a lease car for another, they are much more forgiving. I have a 3 and a y

 

[frozenicecreamDMD]

I think after covid, it is safe to always assume no income is stable and forever. anything can happen.

many states, like CA, a lot of offices suffer from production after reopening because the volume of patient coming back isn't the same like before

even passive income like rental income can be questionable as well during Covid Era (tenants do not pay rent, government support them not paying rent via eviction ban)

so please go to the cheapest school ever and come out with the least debt ever. at least if version 2 of Covid happens, you will not be shaken staying at home. Look at established dentists who treat covid shut down like a mini vacation with no stress. they can afford it. look at the working americans who suffer so much hardship because they cannot afford it. one same situation, two different lives.

dont be the one who get caught holding the bag when **** hits the fan.

always assume the worst but hope for the best. instead of assuming you can make 200k after racking up 700k student loan you can assume making 150k at 300-400k (which is way more reasonable)

 

[charlestweed]

Yes

When you are returning a lease car for another, they are much more forgiving. I have a 3 and a y

Tesla is notorious for not hiring enough employees to serve us, Tesla owners. One positive thing comes out of this is nobody came down to inspect the car when I returned it. To save money on employees, Tesla sent me an email asking me to take a series of photos (side, front, interior, tire's depth thread etc) and submit them back to Tesla electronically. On the day that I returned the car, the guy didn't even look at it.

Another good thing about Tesla is it doesn't require a lot of maintenances. You can drive the car for 3 straight years without having to bring it in for service. Any local tire shop can change the tires for you.

 

[charlestweed]

2 months no income is alot

It is, indeed, a lot if you are not prepared.

 

[charlestweed]

I think after covid, it is safe to always assume no income is stable and forever. anything can happen.

many states, like CA, a lot of offices suffer from production after reopening because the volume of patient coming back isn't the same like before

even passive income like rental income can be questionable as well during Covid Era (tenants do not pay rent, government support them not paying rent via eviction ban)

so please go to the cheapest school ever and come out with the least debt ever. at least if version 2 of Covid happens, you will not be shaken staying at home. Look at established dentists who treat covid shut down like a mini vacation with no stress. they can afford it. look at the working americans who suffer so much hardship because they cannot afford it. one same situation, two different lives.

dont be the one who get caught holding the bag when **** hits the fan.

always assume the worst but hope for the best. instead of assuming you can make 200k after racking up 700k student loan you can assume making 150k at 300-400k (which is way more reasonable)

Nothing is safe. That's why we need to have insurances (life, disability, property, automobile, health etc) to protect our assets. That's why it's important to work hard (when you are still young and healthy) to pay off debts and become debt-free ASAP. That's why it's important to save enough to survive for at least 6months.

I live in an earthquake state. There is a possibility that a strong earthquake could wipe out all my livelihood: my house, my rental properties, and all 4 of my offices. Fortunately, what my wife and I have prepared for this type of natural disaster is more than enough for us to survive this Covid pandemic.

Another fortunate thing is we are living the best in country in the world. The government did not foresake us, small business owners, who are the job creators in this country. Many of us received the PPP loans (which were 100% forgiven at the end of last year), HHS stimulus money, and 2nd PPP loans (last month). Although the aid money was not enough to cover the amount that we've lost due to this Covid, we are very grateful for the help. Small business owners in other countries didn't get any help at all.