What To Do With $500K in Student Loans?

[wideopenspaces]

Great advice given by everyone, which I would echo. I'd be curious how a single person ended up with that much debt. Is med school 100k/ year in some places now?

[Hatton]

FCP please read the burnout threads.

[q-school]

FCP wrote:

also i work about 14 hrs a day every sat sun. total income should be about 1 million gross for my first year out

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wow, you have taken things to their natural conclusion.

um i'm not sure whether to congratulate you or be worried for you.

don't burn out and do a good job!

congrats on such a fast pace of debt repayment.

 

[Zaphod]

I came out of fellowship with a tad over 500k. I had the pleasure of a 7 year surgical training with minimal time to make any money, high interest rate loans (some 10-12%), being incredibly naive/stupid, and a time where you were told to never think about it and defer/forbear like mad. I learned the rule of 72 by watching it happen. Dont recall exact amount I graduated with but it was around 300k most likely.

In this persons case at least the training is short, doesnt have dependents, and lends itself to extra money making opportunities. Can do well simply by not living like crazy.

[Rb52dds]

1)I think wci was right on saying go for loan forgiveness if staying in NYC

2)The other option is lcola move.

Any other choice is a long and painful road.

The interest alone on this beast is brutal.

taxes at any income that will pay this off quickly are brutal. I think it's hard to calculate how much money one has to make including paying taxes and stuff to net the same amount as having loan forgiveness program. I significantly underestimated taxes my first few years out.... especially for the IC work I did.

[ScientistPhysician]

FCP you are a boss and an inspiration.

[StarTrekDoc]

Rule #1 - choose what and where you love.   Then fit the pieces around that.

If HCOL and EM remains the choice --  agree with WCI -- stay in institution and finish out PSLF hoping that it's still there in three years along with whatever healthcare system we have at that time.  That covers the bulk of the repayment and a jumpoff point for additional hours that he may have and plenty of side opportunities in a busy city -- choices abound.

If LCOL is viable option, it can also provide high income, but hours are probably a lot more variable and options constrained within a specific community, increasingly risk of mobility if that's a concern.

I still don't get folk choosing medicine with the goal of FIRE-- it's heck a lot of work with steep incline to get to payoff then to shorten it is beyond me.

@FCP - Congrats -- that's great hard work -- really, watch your burnout risk

[q-school]

StarTrekDoc wrote:

 

I still don’t get folk choosing medicine with the goal of FIRE– it’s heck a lot of work with steep incline to get to payoff then to shorten it is beyond me.

 

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could not agree with you more.

also, i'm in the minority here, but i think there is a societal responsibility to provide care to the community longer than age 45 for physicians.  however, retire early to me means something entirely different than cut back, which i think is very reasonable.

sometimes goals change as life progresses.  it is entirely possible when you started down the road of medical training you had no idea FIRE would become a goal.  By then you were so invested, you could not get off the track.  or you burned out along the way.

 

[hightower]

@FCP, impressive, but I don't think I'd survive that kind of brutal schedule.  Nor would my marriage!  You're right though that when there's a will, there's a way.  You can kill debt quickly if you really want it gone.  But, it's important to not let yourself get burned out.  I hope you're at least planning a big vacation at the end of all this to celebrate the loans being gone?

[jfoxcpacfp]

In addition to the above:

1. Marry someone with high income and no debt, like, say, an attending surgeon. If that's not an option and you haven't tied the knot...


2. Don't do it and absolutely don't add kids to the mix.


3. If you are married, don't have your spouse co-sign anything.

[hightower]

q-school wrote:

StarTrekDoc wrote:

 

I still don’t get folk choosing medicine with the goal of FIRE– it’s heck a lot of work with steep incline to get to payoff then to shorten it is beyond me.

 

Click to expand…

could not agree with you more.

also, i’m in the minority here, but i think there is a societal responsibility to provide care to the community longer than age 45 for physicians.  however, retire early to me means something entirely different than cut back, which i think is very reasonable.

sometimes goals change as life progresses.  it is entirely possible when you started down the road of medical training you had no idea FIRE would become a goal.  By then you were so invested, you could not get off the track.  or you burned out along the way.

 

Click to expand...

I think for at least some of the FIRE folks the desire to retire early comes from burn out.  At least for me that's the case.  I can't see myself practicing medicine for 30 more years...especially with the direction the work is heading (corporate controlled, increasing patient loads, decreasing reimbursements, an increasingly more litigious society, etc).  So, I see FIRE as a way to free myself from all of that burden.  I guess for some people medicine is a calling that they love and that probably outweighs the stress that comes with it.  Unfortunately, I don't share that same passion for my career.

[Donnie]

If you are going to make ~$1M for many years, it really doesn't matter what you do with the student debt.  Pay off debt aggressively, invest in the market, spend a lot, it really doesn't matter.  If you think you may get burned out, then you should pay down debt aggressively so the debt burden will not cause you to stay longer in a job that is making you miserable.

Social responsibility and retiring early was discussed in another thread, but I don't think folks have a responsibility in this regard.  Perhaps if there is a massive shortage of qualified physicians it could become an issue, but I don't think we are there.

[Re3iRtH]

StarTrekDoc wrote:

Rule #1 – choose what and where you love.   Then fit the pieces around that.

If HCOL and EM remains the choice —  agree with WCI — stay in institution and finish out PSLF hoping that it’s still there in three years along with whatever healthcare system we have at that time.  That covers the bulk of the repayment and a jumpoff point for additional hours that he may have and plenty of side opportunities in a busy city — choices abound.

If LCOL is viable option, it can also provide high income, but hours are probably a lot more variable and options constrained within a specific community, increasingly risk of mobility if that’s a concern.

I still don’t get folk choosing medicine with the goal of FIRE– it’s heck a lot of work with steep incline to get to payoff then to shorten it is beyond me.

@fcp – Congrats — that’s great hard work — really, watch your burnout risk

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Agreed. With two exceptions: military and daddy paying for medical school. I chose the former. I will be FI 2-3 years out of residency.

IMO - The best way to FIRE is a flexible or short term gig like a small personal business or a police officer/shift worker. Then just purchase rentals, learn the real estate game. FIRE in ~5 years is almost inevitable.

[Re3iRtH]

hightower wrote:

q-school wrote:

StarTrekDoc wrote:

 

I still don’t get folk choosing medicine with the goal of FIRE– it’s heck a lot of work with steep incline to get to payoff then to shorten it is beyond me.

 

Click to expand…

could not agree with you more.

also, i’m in the minority here, but i think there is a societal responsibility to provide care to the community longer than age 45 for physicians.  however, retire early to me means something entirely different than cut back, which i think is very reasonable.

sometimes goals change as life progresses.  it is entirely possible when you started down the road of medical training you had no idea FIRE would become a goal.  By then you were so invested, you could not get off the track.  or you burned out along the way.

 

Click to expand…

I think for at least some of the FIRE folks the desire to retire early comes from burn out.  At least for me that’s the case.  I can’t see myself practicing medicine for 30 more years…especially with the direction the work is heading (corporate controlled, increasing patient loads, decreasing reimbursements, an increasingly more litigious society, etc).  So, I see FIRE as a way to free myself from all of that burden.  I guess for some people medicine is a calling that they love and that probably outweighs the stress that comes with it.  Unfortunately, I don’t share that same passion for my career.

Click to expand...

Great point. I absolutely love pretty much all aspects of my job in medicine, but I still see FIRE as an inevitability. Why? Opportunity cost. If you have a 40 year career in medicine (or anything else full time), you will never know if you will make a huge dent in the universe. Start a very profitable business, write books, travel and do humanitarian work abroad, develop a novel idea, etc. the list goes on. By the time you are 60 or 65 yo. - ideas, mobility, motivation, naivety (believe it or not this is important to do the things I mentioned), etc. is all but gone.

Doing medicine for 40 years, even if you are published out the butt, partner in a practice, and earning 7-figures is still thinking too small IMO.

[MPMD]

 

If I were in this scenario I would try to bust 20 shifts/mo or so for 2 years. I wouldn't worry about the burnout factor that soon out of residency. You're going to be coming off training where you probably worked around that or much worse (e.g. in ICU).

Just grind it.

I also think with $500k in loans you need to make a chart and hang it on your wall with clear rewards for yourself planned out, probably in $50k increments. Having just payed off my loans I can tell you that the amount of willpower required to take a $15k bonus check and basically sign it over to your loan company just to see the balance go from $200k to $185k is extreme and must be maintained with regular rewards.