Is the debt worth it?

[athenaparthenos]

What I disagree with is the implication from your posts that the strategy you're outlining for financial decisions is the only correct way to do things financially, and if you don't do it you're insane, no exceptions. This might be an implication that only I am reading into it, and if so, I withdraw the comment and you have my apologies. But some people don't have the choices that are available to you, or chose not to make them for valid reasons. Everyone should make their decisions with their eyes open, certainly, but it doesn't make them bad people or mean that have the wrong values if they make those choices, including going to school OOS.

That's how I kind of read it too, VAGirl. Not everyone has these things available to them. I had to get veterinary experience after college, so I've been working at a vet clinic for the past two years... and between having to be part-time for a while to finish my prereqs, and only recently having jumped to $10/hr, I've made barely $20K *before* taxes in that whole time. I live in Portland, OR, where our minimum wage is now close to $8, so my $10/hr is hardly impressive! Yeah, I don't exactly have a lot of money to save after I get done with bills and expenses and my six pets' healthcare. Just not really an option for me, unless there's some magical bank account that can turn $500 a month into $5000 a month or something, lol.

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[VAgirl]

unless there's some magical bank account that can turn $500 a month into $5000 a month or something, lol.

Ok, you be on the lookout for that one, and I'll be on the lookout for the money tree. When we find them, we'll report back and share. Deal?

 

[SweeTeaPie]

It's not so much that I disagree with all of what you're saying, Electrophile. I absolutely agree with the message that you reap the results in your later years of financial decisions made in your earlier life, so be smart. What I disagree with is the implication from your posts that the strategy you're outlining for financial decisions is the only correct way to do things financially, and if you don't do it you're insane, no exceptions. This might be an implication that only I am reading into it, and if so, I withdraw the comment and you have my apologies. But some people don't have the choices that are available to you, or chose not to make them for valid reasons. Everyone should make their decisions with their eyes open, certainly, but it doesn't make them bad people or mean that have the wrong values if they make those choices, including going to school OOS.

Hear hear! There is absolutely nothing I would like better than to be able to pay off debts and save money the way Electrophile speaks of. However not every person's scenario is the same. As I've mentioned before, no-one could even conceive of living off of 15K in this city. Just not possible. Unless of course you want to live in the absolute ghetto. While I recognize that I might not have made the SMARTEST decisions in my financial planning in the past few years or so, I also know I could have made some that were a lot worse. And to be honest, I wasn't even sure that I would be applying to vet school after undergrad. At that point, I got the first job I was offered. And even though Electrophile says you can get jobs in other areas, not just science or vet related, she maybe isn't taking into consideration the job market in other areas of the country. The city of Phladelphia caters to Medicine and Law, and everyone around here is scrambling to get whatever job they can. A Research Tech position typically gets >100 applicants. So I didn't take an entry level research position because I wanted to in order to get experience for vet school, I took it because that's what I was qualiffied for, and that was basically all I could get! People in need of a job around here can be activly applying/searching form months (plural) before they find something. Honestly I would have loved to have gotten a higher paying job (who wouldn't?) but in a cut throat city like this, beggars can't be choosers.

 

[Electrophile]

Scoff all you like, guys, but the money tree is cultivated by the same sort of hard work and discipline as getting in and getting through vet school. There's no get rich quick magical schemes here. It's just good sense that your grandma could have told ya: pay yourself first and save for a rainy day. If there's one piece of wisdom that I have learned that I would pass along is that it's not necessarily the big expenses (rent/mortgage, car payments, insurance, etc) that make you broke. It's often the little things. David Bach in The Automatic Millionaire calls it "The Latte Factor."

$5 per day (the average cost of a latte and a muffin) x 7 days = $35 per week
$35/week = $150/month
$150 per month invested at a rate of 10% annual return =
1 year = $1,885
2 years = $3,967
5 years =$11,616
10 years = $30,727
15 years = $62,171
30 years = $339,073
40 years = $948,611

From: http://www.finishrich.com/free_resources/fr_lattefactor.php

And it doesn't have to be getting a latte every day from the coffee shop. It could be getting a candy bar and soda every day to study with. Or eating out more that you should. Or buying CDs or DVDs or whatever. Those little ticket items cost a lot in the long term.

Like I said, you guys can live however you like, go to school wherever you like, spend as much as you like. But I'd rather be enjoying life by having the maturity to not always give in to instant gratification. And like I said, try these books from the local library or whatever in addition to the one twelvetigers suggested. They are very interesting and actually fun to read, I promise!

-The Automatic Millionaire, Smart Couples Finish Rich, and Smart Women Finish Rich by David Bach

http://www.finishrich.com/pages/home.php

-Financial Peace and Total Money Makeover by Dave Ramsey

http://www.daveramsey.com/

-The Millionaire Next Door: The Surprising Secrets of America's Wealth by Thomas J. Stanley and William D. Danko

First chapter of the book:

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm)

 

[PrimalMU]

I swear, I can't help but feel I'm watching a cheesy infomercial while reading your recent posts, Electrophile. The information in these books you're talking about may be sound advice, but I can't help but wonder if you are getting a commission.

All in jest, of course.

 

[nyanko]

Electrophile, I think people's main problems with your posts, here and pretty much everywhere else I've seen you post, is that you absolutely 100% refuse to admit that your way might not be the exact right way for everybody to do things. It makes it hard to have an actual discussion with you.

And you know what, I like instant gratification. I spent a good amount of money on some rare video games this month and I am absolutely thrilled with it. I guess I could have just put that money in some really sweet interest-accruing account instead, but I'd rather have the games because you know, if I die tomorrow, at least I got to play Nocturne first.

 

[hoodle]

I swear, I can't help but feel I'm watching a cheesy infomercial while reading your recent posts, Electrophile. The information in these books you're talking about may be sound advice, but I can't help but wonder if you are getting a commission.

All in jest, of course.

Hahaha...

And I agree with Nyanko - it's not that I disagree with what you're saying, Electrophile, it's that often I feel personally judged... that you think in absolutes, and if I don't fit the mold that you'd developed, it's a personal failing.

My guess is that it's a tone issue/online issue. the intent and philosophy behind your posts is sometimes ambiguous. are you offering constructive criticism? or just criticism? it is real-life warnings? or scare tactics? am I on the path to righteousness? or am I doomed to always being poor?

not trying to pick a fight. i think it's hard for online forums to get the nuances of complex dialogue between people with strong opinions... which I certainly respect!

 

[VAgirl]

I'll say it again, I don't disagree with the overall message, Electrophile. Saving for the future is great. Not borrowing more than you need is just common sense. Not borrowing at all is even better. But I strongly disagree with the feeling that comes off of your post from statements like this: "But I'd rather be enjoying life by having the maturity to not always give in to instant gratification." (Emphasis added.) It really sounds like you're saying that people are immature or cannot put off gratification just because they might be not able to do things in the way you think one should. It is really frustrating to try and have this conversation with you because you're coming off as somewhat holier than thou and it doesn't sound like you're listening.

I am not trying to get personal and I really am not trying to attack you (U really mean this...I have ZERO desire to be attacked again myself, so I promise I'm keeping this friendly). But have you actually done the sort of saving you're talking about? Putting away 15-20K while living off of 10-15K a year? Because it's one thing to talk about it theoretically. It's a whole other to actually do it. If you've done it, I'll back off and let it be. I just think it's not fair to kind of make everyone feel like they're screwing up just because they can't reach this quite challenging "ideal" that you're laying out here.

Also, I think it's important to remember that often when people are taking a year off of school, they're not just doing it to earn extra money. They're often doing it because they are trying to gain the experiences that will help them get into vet school. A lot of those opportunities come with low salaries attached. (For example, I took a $20K pay cut...yes, you read that right...to take a job that I think was really great experience and probably helped me get into vet school. I don't regret it at all. Those are the choices that some of us are making. And I'm sorry, but those of us who make those choices don't deserve to be called immature or to be scoffed at. In fact, I'd say that's damn near the embodiment of delayed gratification (I budgeted down the the penny, still put money in savings, and ate whatever I could find in my pantry when the last few days of a given month ran a little lean of my planning). Please, let's just all try to respect each others choices a little more.

 

[CanadianGolden]

When I die, do I want to have a bunch of money to leave to my (nonexistent) heirs, or do I want to have eaten something delicious a few days a week?

Well, since I'm not going to care about the money when I'm dead...

Now, of course I'm not, you know, foregoing a better school or buying a house or having an IRA in order to afford my Starbucks chai that gets me through the worst developmental biology lecture in the world three days a week, so I think I'll be okay doing it my way.

But if you want to scoff at my tiny account balance when we're in our respective graves, you can.

 

[hoodle]

ah, canadiangolden's relationship with starbucks is legendary!!!!!!

btw, i saw a paper someone wrote today for an economics professor (I wasn't spying, I was just waiting in front of a different office and saw the title!). It was called "How Starbucks is Ruining the World". I thought of you!

 

[SweeTeaPie]

I agree with all y'all... like I said before, no one here WANTS to be wallowing in debt...

That being said, are the authors of these wonderous Millionaire instruction manuals millionaires themselves? Or are they trying to BECOME one by telling US how to become one? 'Cause I don't know about you, but if I was a milionaire, I think I'd have a lot better things to do than sit around wasting my time publishing a book telling other people how to be as rich as me. Besides, why spill your secret? Heck, if I was a millionaire, I'd happily sit on my nest egg and go muck out some stalls or go volunteer my services to a Wildlife Clinic instead of franticly pushing my instruction book on publishers and touring the country and making boring video tapes. But maybe that's just my sadistc selfish self talking...

 

[athenaparthenos]

I don't think *anyone's* trying to say that it's a *bad* idea to save money, Electrophile. Your financial advice is certainly sound! The thing that people are taking offense to is the implication that if a person doesn't want to, doesn't know how, or simply *can't* save every single penny ever, that they're immature, foolish, or making a 100% wrong decision. If a person goes OOS and pays more, you can't say with completely certainty that they made the wrong decision for them. Money is a big thing. But it's not the only big thing, and for many people, it's not the biggest thing when it comes to their own lives -- and you can't choose how important money is or isn't for other people. Being told that one should make their school decision based purely on money, and that if you chose the more expensive place you're wrong, period, regardless of why you did so, is enough to ruffle anyone's feathers.

 

[hoodle]

... is enough to ruffle anyone's feathers.

i love this term. brings up images of crazy cockatoos nuzzling each other and squawking.

 

[Electrophile]

Oh good Lord...you can't make a comment about the weather these days without everyone thinking you're judgmental. But to clarify lest there be any misunderstanding, yes, I AM saying spending everything you earn without saving anything IS immature. Just like the three year old in the store demanding that their mom get this toy or that candy bar RIGHT NOW is immature. It's not saying the three year old is a "bad person." It's just a fact that a desire for instant gratification comes with immaturity. Unfortunately, many never grow out of it, even when they get ready to retire at 65 and freak out because they have to live in poverty or off the charity of their children because there's nothing in the coffer.

This isn't addressed to anyone in particular, but you're offended that it's not wise to spend all you earn, I'll be offended having to pay your Medicare funded hole in the wall nursing home because of lack of planning or initiative. If you're offended, ask yourself why are you so offended? Is it fun living paycheck to paycheck when you don't have to?

I'm not even that old (I'm 25) and I still splurge on stuff and I make mistakes, but I do know we don't typically have the money fights that most of my married friends have with their spouses because we've got an emergency fund, for instance. Having taken a financial planning course with my husband and seeing couples in their 30s, 40s, 50s, even 60s etc who drive very nice cars, live in nice homes, and have nice respectable jobs but who are still literally living paycheck to paycheck and are about to divorce over money issues is very sobering indeed. This is not an overstatement, it's reality for many Americans.

I'll summarize where I'm coming from in the last few years (was going to do this on an earlier post but ended up deleting it as I didn't come off sound condescending, but as you asked, VAGirl). Between me and my husband, we only made about 40K last year (so that's about 20K between the two of us). We own our house that we bought last summer. We could have qualified for up to 150K for a home loan, but ended up borrowing 107K with it and we pay an extra $100 towards the principle each month. Thanks to our good credit, we didn't have to co-sign. My husband has no personal debt (no car debt as he drives an 11 year old Toyota Camry, no credit card debt, no school debt). I have some car debt, no credit card debt, and 11K from undergrad from going instate with very little assistance from the parentals. I have no debt from grad school since they pay for it and had a small amount saved for an emergency fund from the 20K a year I had as a stipend plus we spent only 5K of our own money on our wedding and honeymoon (the parents paid for less than $1000), so we paid for that in cash. It was still a very nice wedding (even had a white Arabian horse for the pictures plus our honeymoon was in San Diego, which was very cool). I didn't want or couldn't afford the standard 20-30K wedding. I didn't want to go on the honeymoon worrying about the bills that were forthcoming.

Anyways, to summarize, I don't have all the pieces in line (like I need to get my Roth IRA going and we need to get a bigger emergency fund with 3-6 months of living expenses) and I still make mistakes and I still splurge. I ain't perfect!!! But one reason I'm so adamant about making smart financial choices is that it takes a lot of stress out of our marriage and life in general. Almost everyone sees what money problems can do to family life and it ain't pretty, so anything I can do to prevent that is preferable. I feel like it's the ant talking to the grasshoppers sometimes, but we still live very comfortably with the four dogs, two snakes, ferret, rat, and goldfish. Saving money also doesn't mean you're hoarding it!! Money is to be enjoyed and even better if you can give it away as I LOVE giving both time and money to charities and non-profits. I have invested into Kiva.org and if you want to see inspiring, it's amazing what people in other countries can do with just a few hundred dollars and living smartly and below their means.

 

[hoodle]

Oh good Lord...you can't make a comment about the weather these days without everyone thinking you're judgmental. But to clarify lest there be any misunderstanding, yes, I AM saying spending everything you earn without saving anything IS immature. Just like the three year old in the store demanding that their mom get this toy or that candy bar RIGHT NOW is immature. It's not saying the three year old is a "bad person." It's just a fact that a desire for instant gratification comes with immaturity. Unfortunately, many never grow out of it, even when they get ready to retire at 65 and freak out because they have to live in poverty or off the charity of their children because there's nothing in the coffer.

This isn't addressed to anyone in particular, but you're offended that it's not wise to spend all you earn, I'll be offended having to pay your Medicare funded hole in the wall nursing home because of lack of planning or initiative. If you're offended, ask yourself why are you so offended? Is it fun living paycheck to paycheck when you don't have to?

See, this is verging on the offensive! saying someone has the maturity of a 3-year-old (even if you aren't claiming they're "bad") is hard to take! Similarly, most people ARE planning, and DO have initiative... they just have a different set of circumstances than your own!

 

[VAgirl]

This is the last thing I'll say on this topic, because I think in some ways we're all saying the same thing, just saying it differently.

The thing that ruffles my feathers from your posts, Electrophile, is not the financial advice that you're giving. That's fine. It's that the way you write makes it sound as if you think all of the rest of us haven't got a clue about financial stuff and that we are: 1) the three-year-old in the candy store, or 2) the people who will be on Medicare sucking away your hard-earned tax dollars, or 3) the grasshopper who is frittering it all away despite sage advice from the ant (you). Implying that the rest of us are these things is offensive. That's all that has me riled up. And I'm willing to bet that's a large part of it for others, too.

 

[CanadianGolden]

I do have a very comfortable relationship with Starbucks. In fact, I know the exact locations of Starbucks in at least five cities, two of which I've never lived in.

Anyway Electrophile...we all know, saving is good. It's great to save. BUT I also believe that it's important to have a section in your budget for entertainment.

I have no debt at all, my boyfriend has student loans (not sure what they total). We're buying a house. We have combined about 60k income. I have an IRA (I think regular is better than Roth). His business owns two properties. I have a paid off car. I can pay for all of my expenses on about $500 a month (excluding mortgage) so when you consider that I will be making $2200 a month or so...big tragedy if I spend even $100 a month on snacks and eating out. Yeah, my life is clearly going down the tubes. But hey, which is better...being bored and unhappy and suffering through class everyday without a delicious incentive, or getting As?

And regardless, you've clearly got it all figured out for yourself, so what do you CARE what everyone else does?? It's their money and has absolutely no effect on your life at all. Maybe you should invest in some Starbucks stock (which, clearly, I should have, about 10 years ago...).

 

[Electrophile]

At Mizzou, we have something called Speaker's Circle where whoever can stand and say whatever they want to whenever they want to at any time without a permit for having a demonstration in public. Not sure if you all have ever had the...err..."pleasure" of a visit from Brother Jed the hardcore fundamentalist evangelist: http://www.brojed.org/contents.html but he does a great job of pointing out random people out of a crowd walking by and telling them (mostly to get a rise out of people, I'm sure) that they're going to hell for various indiscretions.

Hmmm... *looks over the rest of the posts* I'm wondering where precisely I said that, "Hey you, VAgirl, you're spending is out of control!" or "Hey you, hoodle, cut up your credit cards immediately!" I didn't ever make the posts personal, nor do I tend to on online forums in general. I don't presume to know your own situation. But I'm speaking in generalities that American have a very serious problem in not saving money, but absolutely no problem whatsoever in spending it. This is a fact that's not really up for debate.

However, despite my speaking in generalities, it seems to be you all taking them far, far too personally and I'm not really sure why. Perhaps it's hitting a bit too close to home? I don't know. As I've said probably nearly half a dozen times, you all can do whatever you want.

If you've got your own financial planning strategies for managing this massive amount of debt we're going to find ourselves in, please, by all means share them! Hopefully we can all benefit.

 

[laurafinn]

However, despite my speaking in generalities, it seems to be you all taking them far, far too personally and I'm not really sure why.

I don't think it is that your comments are hitting too close to home for people. I think you're oversimplifying and painting a whole lot of people in a range of diverse situations with a too-broad brush.

My take is that people are getting aggravated because they are explaining their points of view, but not having them acknowledged. There is no compromise or even any recognition that different people can have different perspectives regarding the value of money, the value of life experience and the value of their time.

Also, the fact that you initially preached that all new college graduates run out and grab those abundant $40-45K jobs, then live on $10-$15K a year while they put money in investments that always gain, never lose, even in the short term - well, that's just unrealistic - and it's advice that you yourself did not follow.

I certainly don't disagree that it is good to forego some instant gratification in order to have a financial cushion. Should money be your end-all, be-all? Not necessarily.

 

[Electrophile]

I do have a very comfortable relationship with Starbucks. In fact, I know the exact locations of Starbucks in at least five cities, two of which I've never lived in.

Anyway Electrophile...we all know, saving is good. It's great to save. BUT I also believe that it's important to have a section in your budget for entertainment.

Oh for sure! Everyone should have an entertainment section in their budget as well as an intangibles section. Nothing wrong with that. But if you increase your entertainment section for a month (say it's a month where there are a lot of sweet movies coming out...like this month!), another section has to go down, maybe clothes or eating out or whatever. It's pretty basic stuff, essentially living below your means. Nothing fancy. I'm not getting an MBA after all. I'll leave that to my husband.

I have no debt at all, my boyfriend has student loans (not sure what they total). We're buying a house. We have combined about 60k income. I have an IRA (I think regular is better than Roth). His business owns two properties. I have a paid off car. I can pay for all of my expenses on about $500 a month (excluding mortgage) so when you consider that I will be making $2200 a month or so...big tragedy if I spend even $100 a month on snacks and eating out. Yeah, my life is clearly going down the tubes. But hey, which is better...being bored and unhappy and suffering through class everyday without a delicious incentive, or getting As?

My advice is to save what you can now while you're still making a decent amount. Not sure what your plans are for when you're in vet school now, but last year of grad school, me and my husband made like 50K because of his salary plus my grad school stipend. This year, it dropped significantly because no more stipend and I only borrowed enough to pay for tuition and education-type expenses. I could have borrowed more, but keeping in mine the interest, it was just better to tighten the budget a bit. As a heads up, once vet school comes around, you really can't commit to more than a few hours a week of work if you want to keep your As. Caffeine hasn't necessarily saved my grades in vet school. Melatonin seems to be working much better!

Oh yeah, I believe a Roth IRA for people my age (your age too? I don't know) is actually better. Like I said, I'm not a finance major, but Roth IRAs are better if you're taking the money out at retirement because all interest that accrues is all tax free! In a traditional IRA, you pay capital gains tax, etc on the interest you've made when you start to withdraw it at age 59.5, but you get tax deductible contributions and there's no income limit like there is on a Roth. So it depends on your situation.

And regardless, you've clearly got it all figured out for yourself, so what do you CARE what everyone else does?? It's their money and has absolutely no effect on your life at all. Maybe you should invest in some Starbucks stock (which, clearly, I should have, about 10 years ago...).

The reason I care is because, like I've said, I went through a financial planning class with my husband where there were many other couples living pay check to pay check and in dire straits in their marriage. Even couples from the very nice upscale parts of town. It's not how much you earn that makes you wealthy or not, it's how much you spend. My brother is also in financial ruin because of poor decisions (credit card debt, spending money before he earned it, saving nothing, thinking get rich quick schemes were the way to go, etc). What is the number one cause of divorce in America? MONEY. I have seen first hand what the typical American attitude of consumerism and spend spend spend does to relationships and it ain't pretty.

And for the record, Dave Ramsey and David Bach are both millionaires. I believe one of the authors of The Millionaire Next Door is a PhD. So probably not a millionaire based on salary, but perhaps on book sales.

 

[nyanko]

My advice is to save what you can now while you're still making a decent amount. Not sure what your plans are for when you're in vet school now, but last year of grad school, me and my husband made like 50K because of his salary plus my grad school stipend. This year, it dropped significantly because no more stipend and I only borrowed enough to pay for tuition and education-type expenses. I could have borrowed more, but keeping in mine the interest, it was just better to tighten the budget a bit. As a heads up, once vet school comes around, you really can't commit to more than a few hours a week of work if you want to keep your As. Caffeine hasn't necessarily saved my grades in vet school. Melatonin seems to be working much better!

She's going into a VMD/PhD, so no loans.

 

[CanadianGolden]

She's going into a VMD/PhD, so no loans.

 

[Rebeki]

yes, I AM saying spending everything you earn without saving anything IS immature.

Let me tell you about my previous situation - I live on Long Island and for what you pay on a mortgage, I was paying for a basement studio apartment (about $750/mo while making $12.50/hr - over half my salary went to my rent). Everything is more expensive here, but the salaries really don't keep up. You want to buy a house on Long Island? - plan on spending at least $300,000 for a fixer-upper starter home. I guess thats why everyone lives with their parents

I agree that Americans in general have a spending/saving problem. However, being able to do the right thing financially isn't as black and white as you make it seem. I'm not being defensive, my husband and I have already read the books you recommended and are doing well financially. I am saying this as someone who has been in a position where saving money wasn't a viable option if I wanted to eat anything other than ramen.

To use a cliche....Don't judge until you've walked in their shoes.

 

[Electrophile]

Also, the fact that you initially preached that all new college graduates run out and grab those abundant $40-45K jobs, then live on $10-$15K a year while they put money in investments that always gain, never lose, even in the short term - well, that's just unrealistic - and it's advice that you yourself did not follow.

Um, no. I never suggested that. In fact, for most people, I would suspect that going straight from undergrad to professional school or grad school is probably the easiest for a number of reasons. Going back to school is a lot harder and takes a lot more sacrifice as you get older and start having a family, as I'm sure most non-trads would agree with. However, I did say that if someone wanted to go to their dream OOS school and didn't want to pay OOS prices (or in the case of some schools like CSU where the acceptance rate of OOSers is very very small) that a better idea is to move into that state for a year or two (depending on the restrictions) and get a job. Especially if it was a school that didn't allow you to be a resident after a year or if the military was not an option. Then, trying to save as much as possible to either 1) invest and/or 2) pay in cash for at least part of vet school when you get ready to go.

Also for the record, my husband's job that he got right out of undergrad was 40K (about 30-35K or so after taxes) and he had no special connections, no special super awesome skills. Just an internship he took for credit his senior year. And he was a marketing major, which is not at all a very high salary commanding job entry level. The reason I didn't go all out and put away a bunch of money into a Roth IRA or mutual funds or some other sort of investment is because we wanted to pay for our wedding in cash (something that is practically unheard of these days) and to put a decent down payment for our house (which, in a lot of ways is its own kind of investment). So you saying that I didn't follow my own advice isn't true, so don't put words in my mouth in either case.

However, I think that will be my goal for after summer semester starts is to get my own investments going, as my husband has some for himself. I'm glad for this thread, it gets me thinking about that again! Anyways, I'm done with this thread for the time being. I have a movie to watch and three finals that need studying for.

PS: CanadianGolden, you lucky duck!

 

[NoleDevil]

I don't think *anyone's* trying to say that it's a *bad* idea to save money, Electrophile. Your financial advice is certainly sound! The thing that people are taking offense to is the implication that if a person doesn't want to, doesn't know how, or simply *can't* save every single penny ever, that they're immature, foolish, or making a 100% wrong decision. If a person goes OOS and pays more, you can't say with completely certainty that they made the wrong decision for them. Money is a big thing. But it's not the only big thing, and for many people, it's not the biggest thing when it comes to their own lives -- and you can't choose how important money is or isn't for other people. Being told that one should make their school decision based purely on money, and that if you chose the more expensive place you're wrong, period, regardless of why you did so, is enough to ruffle anyone's feathers.

Very nicely and clearly stated. Is it just me, or are some of these posts a little brain-numbing to read?

See, this is verging on the offensive! saying someone has the maturity of a 3-year-old (even if you aren't claiming they're "bad") is hard to take! Similarly, most people ARE planning, and DO have initiative... they just have a different set of circumstances than your own!

You know, I was complaining to my bf how a good friend of mine forgot (at least that's what I'm assuming) to call me for my birthday today. He was like, "Okay, okay, so she forgot. It's not the end of the world, get over it, you're not six years old." I definitely took offense to this! I think I have a right to be upset that she didn't contact me! It's not like I was dwelling on the fact that she didn't call me all day and made a huge stink about it, but I just found it odd, seeing as she's a good friend of mine, that she didn't acknowledge my birthday! Of course, if something happened out of her control I would completely understand (and probably feel a little guilty)... or if she really did just forget, it's not like I'd hold a grudge against her (I'd like to think I'm a pretty understanding person). My bf did, however, make a great point that a true friend will acknowledge you on days other than your birthday, whereas other people will only acknowledge you on your birthday. While I do think that's a really great point, I still feel like I have a right to be a little sad that she didn't contact me in some way to acknowledge my birthday.

My point here is that just because I got a little upset, I don't think I should be compared to a six-year-old! (Just like people who spend a little more $ than they should shouldn't necessarily be compared to a three-year-old). It really sounds like I'm making a big deal about this situation, but it actuality, I just had this convo on the phone with my bf and read this post right after, so I felt the need to relate.

Okay, [/x100]

Oh, and just to be clear, Electrophile, I see your point about saving $, but I can also see where others are taking offense with some extreme comments. However, I'm sure most of us know how comments that are written and not spoken can become easily misunderstood.

And this is just a general statement... maybe it's just me, but I really don't see the point of having all of these "back and forth" quibble online. I see them in threads all the time! I know we're all trying to "point and counterpoint" each other, but all in all, it is really that big of a deal? I mean, some of the counterpoints can be good, unsolicited advice (or they just sincerely make a good point), but other times it just seems like people are trying to save face. I guess I just don't see the point sometimes - it's only an online forum! Oh god, now I'm gonna get slammed! I sincerely apologize in advance for anyone I may have offended. My bad!

EDIT: I just saw Lisa Lampanelli and she is my new hero! She is so freakin' funny and cracks jokes on everyone! I wish more people could have a sense of humor like her's (and more importantly, not take offense to it!). She is so politically incorrect - I love it. Okay, now I'm officially done hijacking this thread!

 

[CanadianGolden]

PS: CanadianGolden, you lucky duck!

A lot of luck, a lot of hard work (just like ending up a millionaire after saving for years isn't all luck , I gave up a lot of hanging out with friends, etc to get here).

 

[cwazy cat lady]

When I die, do I want to have a bunch of money to leave to my (nonexistent) heirs, or do I want to have eaten something delicious a few days a week?

Well, since I'm not going to care about the money when I'm dead...

Now, of course I'm not, you know, foregoing a better school or buying a house or having an IRA in order to afford my Starbucks chai that gets me through the worst developmental biology lecture in the world three days a week, so I think I'll be okay doing it my way.

But if you want to scoff at my tiny account balance when we're in our respective graves, you can.

Thank You, Canadian Golden!!!

People, talk to your elders. How many of them wish they had worried less about certain things and had enjoyed their lives a bit better "in the here and now" of the past?? How many of them wished they had traveled a bit more while younger? Put off having the kids or getting so serious so soon?

I think a good many.

I am a non-traditional student. I'll be 30 next year and starting vet school in 2009. I am "way behind" by many people's standards. Sometimes I feel a bit that way, too, especially when I hear my 20-year-old classmates are starting medical school a few months from now.

But if I were to have been them, I would have had to miss out on the following:

--having attended a wonderful college and university in NYC, studying languages and history and all kinds of fascinating stuff
--studying abroad in Spain for, yes, 1.5+ years!
--learning three foreign languages and living in central Europe for three years, all while working two semi-low-paying jobs that nevertheless enabled me to travel a lot and to meet hundreds of fascinating people and immerse myself in another culture
--returning to my local university (an excellent place to learn) and pursuing a second degree in a field I love (life sciences, with emphasis on genetics and zoology)
--volunteering at day-therapy centers, hospitals, animal shelters, etc.
--working some good and some not-so-good jobs

Anyways, all that time I have made sacrifices. Instead of staying back in NYC and doing the "finance" thing like my friends (who all earn way more than I, but work 60-hour-plus weeks but don't absolutely love their jobs or the fact that they get 10-days vacation), I went and saw a heck of a lot out of a corner of the world (Europe), met amazing people, have learned to cook pretty decently, developed a palate (I am a bit of a foodie), etc..

They saved money, I spent what I had to get by.

Now, I don't think the languages I speak will help me in vet school. Nor will knowledge of how to navigate your way through certain types of bureaucracy. I don't intend to pour drinks or make lattes for my future clients, BUT as a result of my experiences,

I can relate to people very well and I understand the financial issues and attitudes (esp. foreign/cultural) associated with pet care
I am flexible and open-minded
I know who I am and what I like (and don't like!)
I have amazing photos, memories and stories for myself to enjoy and also to share: Believe me, I can work the room at a social gathering
I know what it's like to work hard and not earn much
I know that I do require a certain amount of money (because I am determined to enjoy my life while I am still here!!!)
But I also know that being rich, wearing a rolex, or bragging about my investments means ZIP to me and is not in my plans
I love learning about new things and am not afraid of the 'unknown'
I appreciate the difference between instant and delayed gratification
ETC.

So if you want to devote your life to amassing unspent wealth, go for it! Do it. But don't presume that that is a goal that is universal to all.

I'm betting I can make a decent living in the future and pay off my student debt. But I'm not going to forgo the small joys in life so that I can pass it on to the kids I don't have.

Some experiences have no monetary value associated with them, but are priceless. Simply put, there is more to life than maximizing earnings and minimizing expenditures. One must find a happy medium and always always keep PERSPECTIVE.

 

[david594]

However, despite my speaking in generalities, it seems to be you all taking them far, far too personally and I'm not really sure why. Perhaps it's hitting a bit too close to home? I don't know. As I've said probably nearly half a dozen times, you all can do whatever you want.

You really dont know why?

Oh good Lord...you can't make a comment about the weather these days without everyone thinking you're judgmental. But to clarify lest there be any misunderstanding, yes, I AM saying spending everything you earn without saving anything IS immature. Just like the three year old in the store demanding that their mom get this toy or that candy bar RIGHT NOW is immature.

You realize spending everything you earn and saving nothing is pretty much the definition of a college student?

Every comment you make about your personal situation is "my husband and I".... "we...". Great! You have a husband who can help financially support you. Awesome.

Now for the rest of us single individuals out there who are going to school full time? What exactly are we supposed to do?

I am a full time student and I work 2 jobs for a total of 40-45 hours a week to barely cover my expenses. College alone costs me roughly 10k per year. And with the killer $9.50 an hour I make, you can do the math to see how far that goes. I had to turn down the very high paying jobs just so I could stay in school. Come to find out the majority of the high paying jobs were 9-5 five days a week when I needed to be in school.

I take offense to the fact that your saying in my situation where my expenses = my income I am immature.

And for the record I don't spend money on entertainment. No Starbucks, no dunkin donuts, dont go see movies, canceled Netflix to save the $17 a month.

I should apologize though, I am tired. I just finished working a 14.5 hour day and have to be back at work in 6 hours.

 

[twelvetigers]

My brain hurts.

 

[tapir]

Before this thread became an infomercial, there were some interesting discussions on Page 1 about interest rates, loan repayment plans, etc. I thought it might be useful to some to bring back a post I made in an earlier thread that detailed some of my own calculations along these lines:
------
Actually, I recommend a different mindset from the folks that want to pay off their loans as aggressively as possible and as soon as possible, eating ramen noodles for 5-10 years if they have to. While a 30 year repayment term will have you paying much more interest in total than a 10-15 year term, you also have to account for 2-3% annual inflation over those years. In other words, your payments in later years will feel and *be* much lower than in earlier years, not just because you'll be making more money, but also because the dollar will be worth much less.

For example, try using the Graduated Repayment calculator on Finaid.org: http://www.finaid.org/calculators/gradrepay.phtml

On a 200k loan at 6.8%, and assuming a 4% discount rate (which is low, and factors both inflation and the opportunity to earn interest/equity now on money that you'd otherwise be paying your loans with), the Net Present Value (NPV) for the total amount paid under a 10 year term is 228k (payments of $2300 monthly), under a 30 year graduated term is 270k (payments from $1150-$1650 monthly), and under a regular 30 year term is 275k (payments of $1300 monthly).

Essentially, if you hurry up and starve yourself to pay your loans in ten years, you're really getting very little real financial benefit from it. If you use the default NPV discount rate of 5.8% versus 4%, the longer term plans come out even better. Just something to keep in mind.

 

[SweeTeaPie]

Actually, I recommend a different mindset from the folks that want to pay off their loans as aggressively as possible and as soon as possible, eating ramen noodles for 5-10 years if they have to. While a 30 year repayment term will have you paying much more interest in total than a 10-15 year term, you also have to account for 2-3% annual inflation over those years. In other words, your payments in later years will feel and *be* much lower than in earlier years, not just because you'll be making more money, but also because the dollar will be worth much less.

Are 30 year repayment options across the board? I know that in my finacial aid packet the table they put in the student loan section made it look to me like a 10 year repayment option was my only choice. Is this not true? And I'm referring to Stafford loans. Is this what you are also referring to?

 

[SweeTeaPie]

And for the record, Dave Ramsey and David Bach are both millionaires. I believe one of the authors of The Millionaire Next Door is a PhD. So probably not a millionaire based on salary, but perhaps on book sales.

Well, actually, that was my point! They're millionaires off of the BOOKS, not because they follow their own advice...

Also, the fact that you initially preached that all new college graduates run out and grab those abundant $40-45K jobs, then live on $10-$15K a year while they put money in investments that always gain, never lose, even in the short term - well, that's just unrealistic - and it's advice that you yourself did not follow.

This statement was what bothered ME the most. It didn't bother me personally (i.e. I didn't take offense at it), it's just that there's the possibility that students that are still in college are probably/possibly looking at this post. I wanted to make the point that actually, finding a job in the science field that pays that well is very dificult and rare to find. When I heard that girl turn down the position in our lab because she felt that the pay was too low, I thought to myself "Wow, she's going to be sorry in a few days. That wasn't exactly the smartest move" and in fact, she called the NEXT MORNING practically begging for the job after someone finally clued her in that the offer wasn't maybe as bad as she thought.
So my advice to new graduates is don't go out there expecting entry level positions paying 40-45K. Sure, some may be out there here and there, but you're oging to have a tough time finding them. And in this economy, you can't be too picky right away.

 

[winglessflight]

Are 30 year repayment options across the board? I know that in my finacial aid packet the table they put in the student loan section made it look to me like a 10 year repayment option was my only choice. Is this not true? And I'm referring to Stafford loans. Is this what you are also referring to?

I believe you can choose 10, 15, or 30 year repayment plans. Someone correct me if I'm wrong though.

 

[SweeTeaPie]

I believe you can choose 10, 15, or 30 year repayment plans. Someone correct me if I'm wrong though.

Yeah I guess I'll have to try and look into that. I just got the packet in the mail yesterday so I'm a bit behind on all of this and still trying to wade through the muck of financial aid. Bleck...

 

[elkbrucellaguy]

Are 30 year repayment options across the board? I know that in my finacial aid packet the table they put in the student loan section made it look to me like a 10 year repayment option was my only choice. Is this not true? And I'm referring to Stafford loans. Is this what you are also referring to?

I think I came across this as well. I looked back and I may be reading this wrong but it looks as if our Health Professions Loans have only a 10 year repayment option. My packet doesn't say anything about the Stafford loans... Ugggghh! Why do they have to make this so confusing!

But I guess my thinking is that really doesn't matter b/c most of us will consolidate our loans into one big one when we get out. Most of the time you can consolidate your loans with a 30 year repayment option.

You might want to give Fin Aid at Cornell a call, the Fin Aid office at CSU has been really helpful at least for me, trying to sort all this stuff out...

 

[tapir]

Are 30 year repayment options across the board? I know that in my finacial aid packet the table they put in the student loan section made it look to me like a 10 year repayment option was my only choice. Is this not true? And I'm referring to Stafford loans. Is this what you are also referring to?

Yeah, the 30 year (graduated and extended/flat) repayment options are standard, at least for staffords. 10-year is the default option (despite being pretty much completely unreasonable for professional school grads), which is why it's always highlighted first.

 

[projekt]

You're right, Bill Danko (Ph.D.) is now pretty wealthy since the publication of The Millionaire Next Door but I have to say his family did well before the book. (I went to high school with his son.) The Dankos are well organized and lived within their means, and they would have retired well without the book. I never read it, but I think it's about how a lot of people do acquire a million dollars over 30 or 40 years, mainly because of compound interest.

Here's my 2¢:

Don't plan on interest figures of 10%. Those are nominal risk-returns. You find them in the stock market, but the up/down of the market can vaporize those winnings when you need them. Safe investments rarely net 2-3p.p. above inflation. It's better to estimate with numbers around 2-5%, and to be pleasantly surprised. 10% returns in the stock market also don't matter much when inflation is high, and risk-free interest rates are 9%, like in the early 80s.

The message of electrophile's response to david594 got lost in the noise, but it was true: One year won't set you back in earning potential on the IS/OOS spread. Let's look at one of the highest-tuition in-state schools: Cornell. In-state you save $11,000-ish per year. (The spread grows each year.) Nominally, you will have spent 44,000 more by going immediately as opposed to moving there and waiting to get in. Plus, you have to add in the interest on the unsubsidized debt. At 8%, your additional debt would total $51,000, assuming there aren't any tuition increases. So, if your increase in salary first year after vet school is less than that, you're losing money.

Frugality is smart. My girlfriend and I became financially "open" with each other recently and I was impressed by how well she saves money. Despite owning her own car, having a typical entry-level office job, and eating out and enjoying herself, she's net-positive every year. She's frugal, doesn't do "retail therapy," and she has placed her money in reasonable investments like CDs for years. If she kept at it, she'd be able to stop working in probably 15 years, and live off the interest.

Reduce the front end of the loan. If you can do this, any repayment plan is going to be easier. If you can live on $8k/year, don't spend $15k/year.

I don't know why electrophile got such a cold response. What she said was extremely useful information. Good job, electrophile!

 

[SweeTeaPie]

The message of electrophile's response to david594 got lost in the noise, but it was true: One year won't set you back in earning potential on the IS/OOS spread. Let's look at one of the highest-tuition in-state schools: Cornell. In-state you save $11,000-ish per year. (The spread grows each year.) Nominally, you will have spent 44,000 more by going immediately as opposed to moving there and waiting to get in. Plus, you have to add in the interest on the unsubsidized debt. At 8%, your additional debt would total $51,000, assuming there aren't any tuition increases. So, if your increase in salary first year after vet school is less than that, you're losing money.

One REALLY important point that you guys seem to keep forgetting is that not all schools allow deferment... At Cornell MED school, deferment requests are only reviewed on a case-by-case basis. I'm not positive about the Vet school as of yet, but I'll find out tomorrow (unless someone who already knows can update us). While there are some vet schools (UPenn) that allow students to claim residency, there are some vet schools that don't offer that as an option, period. And since acceptances are crap shoot every year, I'm not taking my chances on applying again. Most everyone here knows that one year you may be offered an interview and put on the waitlist, and the next year you could be flat-out denied. There are no guarantees.

And here's a case for you. By my estimates, the only reason I was accepted to Cornell was because I'm out of state. There are still in-state applicants on a waitlist, while I was called to join after being previously rejected! Which means that they didn't have enough out of state applicants. Had I lived in New York, I'd be looking for a new job right now. So there goes the IS advantage for you. Sure for most people the odds are greater, but apparently the OOS odds were in my favor. Yeah maybe I'm a rare case, but I'm thanking God that I was!

 

[loo]

I guess we've accepted the fact that we're going to be in debt when we graduate, unfortunately.

I just read an article in DVM magazine about instituting future "limited licenses" to help alleviate extreme shortages in certain areas of vet med (like food animal) and to reduce student debt. The way I read it, it seems like all vet students would "track" into specific areas of vet med instead of receiving a broad education in all the major species of animals. Let's say you want to do horses. You track as an equine practitioner. You change your mind later and want small animal med. Well, then you re-enter the educational system. The problem is that many of us have no idea where our focus will be so early in our careers...

Champions of this idea say that many vet students take on an additional year (aka a "fifth" year of education) of debt by doing an internship anyway.

I don't understand how this will alleviate shortages and reduce student debt in the short term. I can't even imagine the tremendous change of curricula/accreditation issues this would create for vet schools...

Any thoughts?

 

[CalpardNY]

I'm not sure I would be a fan of the idea of "limited licenses." Tracking of specialties seems like it would have a lot of logistical kinks in order to transition to on its own. As you say students have a hard enough time choosing a path within veterinary medicine, and from my experience working at a specialty clinic I feel many graduates go and do an internship year (whether right after graduation or after a few years of general practice) to get a more in depth perspective on many of the areas before they begin to specialize.

Now i say all this without having actually started vet school or working as a vet in the field. However, i feel like this sort of change would very much change the field of veterinary medicine as we know it - and not necessarily for the better.

Anyone else?

 

[VetMed555]

I'd have to stand up for Electrophile: I agree with most of the things she said. It is possible to save money and it does come down to wise choices. If all works out as planned, I should come out of vet. school with about $50,000 debt (using our savings for the past 5 years), and I'm planning on paying it off within 5 years (at most). I don't really understand why with a starting salary of $50,000, are we planning on being in debt forever? Well, don't say: "I'm a doctor, I can afford it" for the first 5 years and live off $20,000---is this really impossible to imagine? And for the record, I've made a decision to give up Starbucks. At $5-6 a CUP even 3 times a week, it turnes out to be $60-75/month! I am buying a Starbucks coffeemaker though (It'll pay off in just 1 month). I'm making a lot of small cut-backs while in vet. school, just so I don't have this enormous debt when I get out. I also have to make them because we will basically run 2 households on one income with my husband. Entertainment is important, but it can be budgeted in just like anything else.
Maybe it sounded a little harsh, but I second Electrophile's advice. I also second her advice on going IS IF you have a choice. Vet. school is vet. school. I really don't see HUGE differences among most vet. schools ESPECIALLY if you're planning on doing SA medicine. Plus, you can always do internships/externships/residencies etc. That being said, I would go OOS if I didn't get into my IS school. It was too important to me to risk reapplying and not getting in.

 

[nyanko]

I don't really understand why with a starting salary of $50,000, are we planning on being in debt forever? Well, don't say: "I'm a doctor, I can afford it" for the first 5 years and live off $20,000---is this really impossible to imagine?

Well, to be honest, I've lived like a poor student for....since I graduated from high school. When I'm done with school I want to, you know, NOT live like a poor student for once. And given that I'm 27 now and entering a MS before I even reapply to vet school, and I aspire to a DVM/PhD admission when I'm finished, I'll be 35 or so before I even think of being done, and that's if everything goes according to plan which we know it never does. Why would I want to wait until I'm 40 years old or over to actually be able to enjoy some financial wiggle room? No, forget that. It's not feasible in everyone's case. Granted, if I do happen to luck into a VSTP admission here I'll not have to worry about the same magnitude of loans, but I do have some debt from undergrad and may have some from my MS as well.

Plus, I don't really think that most of the people responding were blatantly disagreeing with Electrophile's sentiments on being financially smart, it was just her tone that was quite offputting.

 

[NittanyKitty]

This is just my two cents. Not trying to bash anyone that's posted here before. I've finally gotten to this thread, and I have to stick up for Electrophile, too. I think she was just advising everyone to plan smart, be realistic about your situation, and not make unwise financial decisions now that you will be unhappily saddled with until you retire. Tone is a difficult thing to convey in written form (especially when you've never met someone!), so I think giving a little benefit of the doubt while reading posts on forums is a good thing. Everyone's situation is different -- different family, different needs and wants, different living environment -- but the basic idea remains the same. Not living outside your means is important while in school and after graduation.

Honestly, I think a cup or two of Starbucks (or a movie or a new book or whatever floats your boat) a week isn't going to make or break your financial future, but it's important to know your budget and what each expenditure means. Electrophile approached her finances in one manner and it worked for her. Everyone needs to choose for themselves what is the best way to handle their inevitable debt, but smart planning is still good advice no matter who you are.

 

[rachroo]

Everyone needs to choose for themselves what is the best way to handle their inevitable debt, but smart planning is still good advice no matter who you are.

We are all so different, that I think this quote sums up what each side is trying to say. The end!

 

[nyanko]

Tone is a difficult thing to convey in written form (especially when you've never met someone!), so I think giving a little benefit of the doubt while reading posts on forums is a good thing.

To be fair, I was not only talking about her posts in this thread. I think Electrophile believes things very strongly and it comes across in a certain way on the internet, and it's very easy to interpret in a way that's insulting to people who disagree with her. This isn't the first thread I've seen that she's posted in, so that's why I put it the way that I did.

She's giving financial advice, and I was giving feedback on the way she's posting and why people tend to argue with her so much, I guess.

 

[Pointer1330]

What do you guys think of this? I am already 60,000 in debt from undergrad and know I will probably be more in debt from vet school. Is it worth it? I can't think of anything else I would rather do. Also, is the pay that bad? I just don't know.

lll

 

[fargeese]

Most of you have said what I would have said so I'll summarize:

Roth Iras are awesome, and as soon as you can start contributing, do so! Even a few hundred deposited at 25 will be thousands when you retire.

No one can say if the debt is worth it on this forum. We're all full of love and happiness because we actually got in, and we all secretly think we'll be rich. Ask around at your next conference for a more realistic answer.

Lay off Electrophile, she's posting for your benefit. Yes, her manner is a bit heavy handed sometimes, but she's only posting to try to help you and because her message = save and don't blow your money = is sound. Americans are notorious for not saving, and if a little of that message gets through, great!

I know things are harder for people who don't have a significant other to help with the bills (like myself), and that you do need to have splurges once in a while to stay sane, but at this point, where every dollar you spend is going equal 2-3 dollars by the time you can pay them back, wasting as little as possible is the smart, albeit not fun, thing to do.

Now who wants to come swim in my pool? It's absolutely free and no loan money is required!

 

[twelvetigers]

Yay, another Roth IRA supporter. Woo!

Actually, I should probably eat my words because I don't even have a Roth IRA. I just know that I should. But first, we should match the hubby's employer's input into the company IRA... which we would not do if it were a 401k, because he won't be staying indefinitely. But, he can take the IRA with him so we should work on that!

Thankfully, we're still young and off to a good start anyway.

 

[VetMed555]

Now who wants to come swim in my pool? It's absolutely free and no loan money is required!

I do, I do! Say...July-ish timeframe?

 

[CanadianGolden]

Oh yeah, I believe a Roth IRA for people my age (your age too? I don't know) is actually better. Like I said, I'm not a finance major, but Roth IRAs are better if you're taking the money out at retirement because all interest that accrues is all tax free! In a traditional IRA, you pay capital gains tax, etc on the interest you've made when you start to withdraw it at age 59.5, but you get tax deductible contributions and there's no income limit like there is on a Roth. So it depends on your situation.

I prefer traditional because you don't pay taxes on what you put into it (read: when you are young and poor) but when you take it out you only pay taxes on your income at the time which, if you're retired, is again low.