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*Official student loan pay off thread*

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  • Congrats! It bears repeating that the path to financial independence for a physician is easy, it really is. It may be tough to practice for some but the roadmap is easy.

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    • this is an awesome story-you did far more right things than wrong things. No one ever does everything right. The nice thing about having a big income shovel is you can right the wrongs faster. You just need to identify the wrongs. Your wrongs are honestly extremely small. You're going to do great

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      • Originally posted by NumberWhizMD View Post
        Good morning WCI Forums!!

        I have been saving my first post for this day, as I wanted to use it as motivation to get the job done. I have been following this forum since I was in medical school.

        Today, I FINALLY paid off my student loans!!! Here's a little background:

        I'm in primary care (I know!), but love it. Of course I went to a ridiculously expensive school, so total loan amount when all was said and done after residency had ballooned to just over $400k. I was fortunate to have most of undergrad paid for through scholarships and parent's help. However, med school was all on my own.

        I am currently a little over 4.5 years out of residency. I'm lucky to have a very supportive spouse who helped a lot during medical school and has a high enough income to make up for my primary care income (hint - he's not in medicine). We have put anywhere from 40-50% of our monthly income towards loans for awhile, and made the final balloon payment today. It feels SO LIBERATING to finally be free of this. We still were able to take vacation, as this was a big priority to us. We don't really buy clothing, and we shop at ALDI, for reference. For us, that was our motivation to help get through these payments.

        Things we did right:
        - live like residents out of residency
        - max out 401k
        - avoided consumer debt (minus some car payments...I know)
        - avoid buying the big doctor house (our house still feels like a doctor house, but < 1x income)
        - waited to buy a house out of residency (great choice, as we moved after my first job, which I HATED)
        - currently living in L/MCOL area
        - full insured ourselves as soon as I graduated residency and locked in great rates while we were younger

        Things we did wrong:
        - ROTH 401k does not equal ROTH IRA, so we missed out on some of that
        - bought a house in residency (luckily we made a profit, but it was very stressful)
        - lived briefly in a HCOL place (for my husband's work...best move for him career-wise, but it was a tight 2 years of spending everything on childcare and rent with little leftover...still managed to continue those ridiculous student loan payments)

        Goals now:
        - start saving for 2 kids' 529 (hopeful my husband stays in his career though, as this will provide significant tuition benefits)
        - start saving for taxable account
        - just refinanced our house (30-year 4.75% -> 15-year 2.125%) and looking to improve costs and payoff quicker
        - increase vacation budget...just waiting for COVID to end so we can get back to traveling
        - enjoy the flexibility at work to know that I don't have to have as high of an income just to make all these payments...just went down to 4.5 days and adjusted my schedule so I'm done at 3:30 and can be home earlier with my 2 kids

        I feel SO good about this. Now if we continue to hit our new goals, we are on track to move towards FI!
        Incredible! Living like a resident for 4-5 years is textbook, and you nailed it. Wow.
        the amazing thing i found was that after I lived like a resident for 4-5 years as an attending, it has become a lifestyle...minimalism and doing things with a purpose.
        Enjoy the traveling and share your financial wisdom on this forum!

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        • Just submitted the final payment to pay off my loans! Started at $180k and made a final lump sum of $30k to be done with them. Finished fellowship exactly 2 years ago.

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          • Final payment today: ~337k in exactly 3 years post-fellowship, & because I used FRB and paid it off in a given time period, I get refunded up to 2% of the principal in interest payments (although I refi with FRB when it was around 240k, so I will get 4.7k back as refund).

            Some data from my spreadsheet:

            total payments in:
            2018 (6 months) - 78.5k
            2019 - 155.3k
            2020 - 32.5k
            2021 - 62.7k

            avg monthly payments in:
            2018 (6 months) - 11.2k
            2019 - 12.9k
            2020 - 2.7k
            2021 - 9k

            I was initially on a fast pace to get it paid off mid-2020 in 2 years, but after the covid crash in Mar 2020, I decided to switch course and make minimum payments, and instead to invest everything I could in the market...needless to say, it worked out last year. Then, decided to turbocharge the remaining amount over the past few months to seal the deal.

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            • Better late than never. Finished residency in 2005 with 16k in private loans at 8% and 275k in consolidated loans at 2.75%. I paid off the 16k within months of my first few paychecks. Was paying the 275k loan monthly until recently and thanks to WCI I paid off about 130k remaining in one lump sum. I had too much cash in my emergency fund and was made aware of this in my first thread about my portfolio review. Thanks again to all for the inspiration and knowledge. Off topic, I never did a 529 for my kids since I was saving for myself first and enjoying the life and have been since then. Has anyone just cash flowed college expenses for their kids? Do you get a monthly bill for tuition/room/board or is it a bi-annual payment? I have enough saved up in my brokerage accounts to sell some stocks but I'd rather not get hit with the LTCG at 20%. I can still save 25% for my retirement and do the cash flow it seems, this will start in fall of 2022 for the first kid and fall 2023 for the second one. I also have an investment property with about 450k in equity should I decide to sell for the cash. Thoughts? Thank you again.

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              • Originally posted by Trigeminal View Post
                Better late than never. Finished residency in 2005 with 16k in private loans at 8% and 275k in consolidated loans at 2.75%. I paid off the 16k within months of my first few paychecks. Was paying the 275k loan monthly until recently and thanks to WCI I paid off about 130k remaining in one lump sum. I had too much cash in my emergency fund and was made aware of this in my first thread about my portfolio review. Thanks again to all for the inspiration and knowledge. Off topic, I never did a 529 for my kids since I was saving for myself first and enjoying the life and have been since then. Has anyone just cash flowed college expenses for their kids? Do you get a monthly bill for tuition/room/board or is it a bi-annual payment? I have enough saved up in my brokerage accounts to sell some stocks but I'd rather not get hit with the LTCG at 20%. I can still save 25% for my retirement and do the cash flow it seems, this will start in fall of 2022 for the first kid and fall 2023 for the second one. I also have an investment property with about 450k in equity should I decide to sell for the cash. Thoughts? Thank you again.
                One bill before the semester begins paid in full (room, board, and tuition and fees). If I were you I would start your "cash flow plan" immediately. With the short time frame, investing does not make sense. Set up a separate account or a HYSA (what is that?) and start building a balance. Run some numbers and see what you need so you are at least six months in advance. From what you described you will need a running start to be ahead of the curve. Sixteen of those payments will add up before you realize it.
                As you said, better late than never. Congrats. Cash crunch coming down the track.

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                • I have been waiting for a long time to make this post. After 4 years and 1 month since finishing fellowship, I can now say that I'm officially debt free!!!

                  About $325,000 is finally gone.

                  It doesn't even feel real. I'm sure it'll feel much more real in the coming months as I see that checking account balance grow and grow.

                  It was very painful at times. My situation is outside the norm, since I was an international student attending a US medical school, and as I wasn't a US citizen or permanent resident at the time, and I didn't have any family in the US (read: no US co-signor), I couldn't obtain any US loans for med school. All of my loans were from a foreign bank. I had to utilize an online currency exchange company to send money to my family to deposit into my loan account (currency exchange companies offer MUCH better rates than banks).

                  I calculated that in 2020, 75% of my income went to loans, taxes and maxing out my Solo 401k, backdoor Roth and HSA.

                  Good luck every one!!!

                  Time to let loose the purse strings a bit. Cheers!

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                  • Time for the gigantic doctor house, or are you going to reward yourself with at least some pay raise? Maybe give yourself 40-60% of what you were paying for student loans as a raise and invest the rest in taxable?

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                    • Originally posted by Hank View Post
                      Time for the gigantic doctor house, or are you going to reward yourself with at least some pay raise? Maybe give yourself 40-60% of what you were paying for student loans as a raise and invest the rest in taxable?
                      The “smart thing to do is to double check your retirement savings rate. Happy with that , 20%+, then you can build wealth or spend it. Purely personal choice.

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                      • Originally posted by Hank View Post
                        Time for the gigantic doctor house, or are you going to reward yourself with at least some pay raise? Maybe give yourself 40-60% of what you were paying for student loans as a raise and invest the rest in taxable?
                        Yea, I gotta now save for the house. Not easy in SoCal. I'm hoping house prices stabilize and maybe I'll look around in the winter. Otherwise, the rest will probably go into taxable and maybe I'll take more days off and just work less.

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                        • In honor of submitting my spouse's final payment this morning:

                          Hello FedLoan, my old friend
                          I've come to pay you once again
                          Because of interest steadily creeping
                          Saw the balance while I was sleeping
                          And the vision that was planted in my brain
                          Still remains

                          Of a zero balance

                          But then COVID shut your interest down
                          And a smile then replaced my frown
                          I kept on paying down that dang large loan

                          No 6.8% interest to bemoan
                          With the power of an attending salary
                          I paid with glee
                          To get that zero balance


                          And finally one glorious August morn
                          The day I waited for was born
                          Pushed payoff without speaking
                          Typed $10,000 without freaking
                          Now were going to focus on saving to retire
                          Maybe FIRE
                          ‘Cause there’s a zero balance


                          Total was $109K and we are about a year out of training. We sold our residency home for a big profit and that was a big help. Save for $7k left on a car loan and a mortgage at 2.35%, we are debt free. I do need to build our emergency fund back up because I pulled from it to pay these off before FedLoan started imploding. I've been funding 529s since he started the attending job (we have a 9 year old--needed to get on that quickly) and are at about 10% retirement savings. Hoping to bring that to 20% in January, but we do have a good start in Roth IRAs from retirement funds from my old job and residency (it was forced, so we had to, ha).

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                          • Originally posted by MSooner View Post
                            In honor of submitting my spouse's final payment this morning:

                            Total was $109K and we are about a year out of training. We sold our residency home for a big profit and that was a big help. Save for $7k left on a car loan and a mortgage at 2.35%, we are debt free. I do need to build our emergency fund back up because I pulled from it to pay these off before FedLoan started imploding. I've been funding 529s since he started the attending job (we have a 9 year old--needed to get on that quickly) and are at about 10% retirement savings. Hoping to bring that to 20% in January, but we do have a good start in Roth IRAs from retirement funds from my old job and residency (it was forced, so we had to, ha).
                            Obviously goal oriented, congratulations! It won't make a big deal, but you have one debt you forgot. You "forgot to pay yourself first". You owe yourself about 10% for about a year out of training. Pay it back in addition to the 20% go forward retirement savings rate. Call it cash flow, but finish strong. Great work.

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                            • Originally posted by Tim View Post

                              Obviously goal oriented, congratulations! It won't make a big deal, but you have one debt you forgot. You "forgot to pay yourself first". You owe yourself about 10% for about a year out of training. Pay it back in addition to the 20% go forward retirement savings rate. Call it cash flow, but finish strong. Great work.
                              Eh, he just became eligible for the (unmatched) 401k in July, which is when we started contributing. We've been maxing out backdoor Roths and HSA as well. It made sense to get rid of the potential 6.8% loan first while it wasn't accruing anything. My goal was to get it done by September due to the original interest holiday deadline and the fact that FedLoan was exiting the business. We have over $100k sitting in retirement funds now and we are in our early 30s, so we had some wiggle room.

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                              • This is my first ever post, though I have been reading the stories on this thread with envy for some time. Yesterday, I made the last payment on the student loans. My husband and I had an enormous debt burden when we graduated from residency in 2012. Between the two of us, we owed $570K in medical school debt. Minimal undergrad, fortunately. We are both in primary care, though we do rural full-scope and it pays fairly well. I calculated that we were paying $100 per day in interest alone at the time. Our monthly loan payments were something like $6500/month (it might have been more, but we were able to knock out one horrible 9% loan before it got out of the grace period). It was nauseating. The first few years, we really did throw everything we had at the debt. We lived in some awful rentals, kept the cars we had in residency, did local vacations. The pace slowed a bit when we had kids, as we choose to pay for a nanny to cover our childcare needs while we worked the long hours. We also bought a house, and though it is below 1x our salary, it did need some infrastructure repair (roof, sewer) that slowed us down as well. We also wanted to max the 401Ks, start a taxable account, and get the 529s going, all of which have proven to be good moves financially, though they also slowed the loan repayment pace a bit. We finished up the last of my husband's debt in March of 2020, and then focused on the remaining balance on my debt ($120K in March of 2020). I sent in the last $16K lump sum payment yesterday.

                                I logged into Earnest today and saw a $0 balance. It is so hard to believe that this is finally done. All those years of seeing thousands of dollars every month exit the checking account and go to various loan servicers. Having loan servicers "lose" the extra payments we sent in (Sallie Mae used to require extra payments on certain loans to be paper checks--probably so she could lose them and we would have to pay extra interest while we sorted it out). Having Sallie Mae "accidentally" put an extra payment on a 2% loan instead of a 7% loan despite an accompanying letter and the Loan number written on the check and then take 6 weeks to "sort it out." Having loan servicers switch without warning so we would have to figure out where the payments needed to go. All those extra hours worked so that we could earn just a little more to put towards the loans. Refinancing multiple times. Angsting about variable versus fixed interest rates. It's done now, and I just wanted to shout from the rooftops...or type quietly from my living room. Grateful to this community to keep us inspired to get this done!

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