How much do you anticipate taking out in loans? (or how much did you take out)

[fball22]

Check out this book about finances for physicians. There's only one chapter dedicated to premed/med school. But the rest is great info so you can plan ahead a little.

Amazon product

The guy that wrote it also has a blog and is on sdn.

http://whitecoatinvestor.com/

To answer the question, I have no idea. Praying a school decides they love me soooo much they will deliver a wheelbarrow full of money to my front door with the financial aid package.

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[Matthew9Thirtyfive]

I would've fed them the cat

Wasn't our cat.

 

[YoungDoc25]

I will find out in ~10 days if I will be $100k in debt or $200k-$220k. That $100k debt could end up ~$75k pending a scholarship too. Needless to say, my stomach will be in knots for the next week and a half

 

[787593]

I will find out in ~10 days if I will be $100k in debt or $200k-$220k. That $100k debt could end up ~$75k pending a scholarship too. Needless to say, my stomach will be in knots for the next week and a half

Prayers!!

 

[Frogger27]

For those investments to be a "good investment", their apreciation will have to outcompete the interest rate on the loans that he is taking out for school.

Betting to outcompete a loan interest rate of 7% (or whatever it is) over a 4 year period is incredibly risky and bound to leave Lannister in a worse situation after taxes than if he just withdrew all funds from his investments and took out a little less for school.

Isn't a 7% return on a well diversified account pretty reasonable? I thought that's a pretty safe bet plus the stock market is eating right now. I am in a similar position and I'm pretty sure I'm going to keep mine in the market (only loans will be tuition, my COL will be covered). Then plan on withdrawing at the end and paying them off before they start accuring.

 

[Lannister]

Not to tell you what your grandfather should do, but I strongly suggest trying to get that money out of investments and use it instead to limit your total loan amount

Well, my grandfather is dead, so he won't be doing anything lol.
My father works in business and he controls the account so I trust him to know what he's doing.

Edit: to clarify, I will be using that money to pay for med school. I've decided to split it up over 4 years rather than use it all at once, so I can limit the amount of Grad PLUS loans I've got to take out.

 

[Lannister]

For those investments to be a "good investment", their apreciation will have to outcompete the interest rate on the loans that he is taking out for school.

Betting to outcompete a loan interest rate of 7% (or whatever it is) over a 4 year period is incredibly risky and bound to leave Lannister in a worse situation after taxes than if he just withdrew all funds from his investments and took out a little less for school.

She. And yes, that's what I plan to do for the next three years. This year I used another account that he left me to pay for ~$20,000 of the COA. I ended up having to take out Grad PLUS loans anyways, but that was due to residency reclassification, not financial need.

 

[787593]

Isn't a 7% return on a well diversified account pretty reasonable? I thought that's a pretty safe bet plus the stock market is eating right now. I am in a similar position and I'm pretty sure I'm going to keep mine in the market (only loans will be tuition, my COL will be covered). Then plan on withdrawing at the end and paying them off before they start accuring.

Don't the loans start accruing interest right away?

 

[ncide]

Around $400-$450k. Unfortunately dentistry is very expensive... and it seems to be significantly more expensive than a medical education.

 

[787593]

Around $400-$450k. Unfortunately dentistry is very expensive... and it seems to be significantly more expensive than a medical education.

Oh mah lawd!!!!

 

[absolutelynot]

Maximum ~$180k for me. Hoping to get lucky and score something sub-$100k though. It would definitely make a long residency/fellowship more appealing.

 

[ncide]

Oh mah lawd!!!!

And that doesn't even include residency.

 

[protego]

Right now I'm looking at around $200,000.. Could be worse but dang that's a high number. Only received financial aid info from one school though. Fingers crossed.

 

[Astra]

0 debt. I got accepted to my state school which has a low CoA and also got a scholarship which should put my total CoA around 60k, which my parents dont mind paying.

Now if I choose to go to a pretty good OOS private school, probably 250k plus.

I honestly cant see myself spending that much more even if the school is much better ranked

 

[Mad Jack]

If the average public COA for med school is $240k, and you can save $120k in four years (which is definitely possible without having an extremely lucrative job, as my friend saved $80k in four years without doing serious investing), then half of your COA is already paid for. Work for a little longer first and you can eat into it even more.

Except that 120k will cost you four years of attending salary, so you'll probably lose 400k or more overall.

 

[Matthew9Thirtyfive]

@Mad Jack
Yeah, but I'm not talking about intentionally delaying med school. I'm talking about non-trads who came to med school after some years of working who have savings they apply to lower their overall debt.

 

[Mad Jack]

Not to tell you what your grandfather should do, but I strongly suggest trying to get that money out of investments and use it instead to limit your total loan amount

Depends on risk tolerance. The market typically has returns a couple of points higher than interest will be, so the financially smart thing to do is generally investing.

 

[Mad Jack]

@Mad Jack
Yeah, but I'm not talking about intentionally delaying med school. I'm talking about non-trads who came to med school after some years of working who have savings they apply to lower their overall debt.

Or there's guys like me, that had savings they used to maintain the same lifestyle while going through medical school, because **** living on ramen and pasta with multiple roommates in my 30s. I'm too old for that ****.

 

[getfat]

Or there's guys like me, that had savings they used to maintain the same lifestyle while going through medical school, because **** living on ramen and pasta with multiple roommates in my 30s. I'm too old for that ****.

How much did you save prior to starting? Working two jobs and would like a similar scenario.

 

[Espressso]

TBH I don't understand the stock market either

Like I get the basics but how it all works out is a mystery

Immediately thought of this:

 

[Mad Jack]

How much did you save prior to starting? Working two jobs and would like a similar scenario.

About 50k after taxes. Allowed me to boost my medical school budget by 1k/month, which makes a huuuge difference.

 

[Mad Jack]

Using that logic, the financially smart thing to do would be to max out the total possible amount your trading account offers in margin, take out as much as possible in credit/loans and put it all in investments because the rate of return in the stock market is typically higher than the interest rates of any of these vehicles so you most likely will make money, right?

People who do things like that or invest money that they don't have (medical students in hundreds of thousands in debt) tend to end up in very terrible financial circumstances.

Everyone that disagrees with me on this, what do you think Warren Buffet would say on this issue? There's a reason why financial advisors seek out people in the medical profession as clients.

It's illegal in many cases to take out loans for stock investment purposes, as terms often prohibit this and you're borrowing money under false pretenses (unless you've got a good enough credit score and enough collateral to get no strings attached loans, in which case such behavior is allowed and actually does occur, look into investing to earn a spread). Now, as to student loans and investments- the two percent (or more, my investments had beaten my loan rate by 3-4% most years) makes a huge difference over the long term due to compound interest. In fact, over the life of the loan, you'd be throwing away $38,000 at the lower end (2%) of things. The thing is, this sort of long-term planning is the kind of thing most people are straight out bad at due to lack of self control, so they often end up not paying down their debt AND spending the 60k. If you're disciplined, paying off debt slowly while investing heavily with the remainder of your income is the most financially prudent thing to do.

Unless you're planning on retiring early, like myself, in which case paying down debt as quickly as possible, investing all of your money above a basic subsistence level, and retiring when you reach 20x your desired annual income is how to go about things. The first strategy is a wealth maximization strategy- great for people that want to establish a multigenerational stash of family wealth. The second strategy is great for people like myself that never plan to have children, as it leaves millions less in the end but ensures a high quality of life decades earlier than is otherwise possible.