¶ Student Loan Frustrations
You know , with student loans I don't know . For me , I hated verifying my income and my employer every year for the public service loan forgiveness .
We know that sometimes who they put in positions as representatives and administrators in the Department of Education are sometimes not the most knowledgeable , and so I just kind of hated just this reliance on the government to forgive my student loans .
Renee talks about that all the time . She says like you spend your entire life trying to have major control over your career , how you study , the grades you get , and then all of a sudden you know a major portion of your paycheck . You don't know if it's going to get forgiven at the end of 10 years .
When I talk to people about finances , it's all about control , it's all about strategy . It's all about strategy . It's all about understanding how your money is moving . And for me , that level of uncertainty I just really didn't agree with .
I think we kind of come from similar backgrounds .
Yeah .
Yeah , but like I just found myself just literally like in a rat race , I wake up , try to get to work , try to get there , you know , be the best surgical resident I could be . You're staying there late , you , you know you study at night and then you wake up and you rinse , wash and repeat and the last thing I had on my mind was just finances .
Right , because I literally was like okay , do I have enough to pay my mortgage , do I have enough to pay my bills ? I wasn't thinking about saving , I just wanted to just get through residency . Because I just wanted to get through residency and like , like I , just for me , I wish I was at your mindset , right ?
So I guess the thing that I was that I want to ask is like , how did you , how did you like , not feel like you were drowning between trying to survive as a resident you know , being a new city and all those different things survive , residency , get through , thrive , and then also , at the same time , have this like forward thinking plan that even the extra
bit that I have , I'm going to put towards this delayed gratification of paying off my debt . Talk to me about that . Like , how did you make that decision ? Like this is where the money's going to go , right , because that's to me that's tough , right ? So talk to me about that , right , because that's to me that's tough , right .
So talk to
¶ Building Financial Habits Early
me about that .
You know , I think it just starts with having a mindset of whatever habits and behaviors you develop today have compounding interest , and I am a little bit of a hoarder of digital , digital clutter , and I found a budget that I created in medical school and it didn't dawn on me like at the time , but just being able to manage the money my student loans and the
money that I had coming in at medical school and developing a budget then helped me to master that skill . So when I got to residency , I could build upon it . I could now think about creating a debt strategy and understanding what an income driven repayment option is , and okay , if it's based upon my income .
So what do I got to do to lower my income , to lower my payments , if I'm seeking for forgiveness ? It allowed me to capitalize and understand that , okay , I have these moments in which I'm cooking , I'm cleaning , I'm doing other things that I can build in some education here outside of medicine . And how can I do that ?
By capitalizing on an audio version of learning material , so I don't have to necessarily sit down and read , but I am still building this muscle and to understand that financial literacy has two components . It has the acumen , so the understanding , the stuff that we read about in the books , but it also has the utilization of that information .
And so I knew then that if I don't start to practice these small skills when I become an attending and making a lot of money , then I'm more susceptible to making mistakes . So let me just practice at my lower threshold , right .
My lower income Dr .
Brittany .
You talking what I'm talking . I keep telling these folks listen . If you so , I didn't do it right , so I you know I didn't practice those skills , but we always what you laughing at . But it's the truth . Why are you shedding a tear ? No , because I always tell people listen . It's like do it when the stakes are low right when the stakes are lower .
Right , like you should be trying to pay off . Maybe try to pay off some debt . Try to invest a little bit right now , because when you get into this pile of money that you're not used to having right no-transcript on an automatic investing plan when it's like you could have did it yourself .
And they don't do it as well , like studies show that they don't do it as well compared to like a more passive form of investing . And so yeah , keep preaching .
I hear that wholeheartedly , but I think a lot of us just feel like when I talk to residents I recently gave a talk on financial wellness to African students Like there was more public health , medical students and some attending at an African health conference and one person she's like I was talking to my friend who does finance and he told me that I should wait
to start investing because even if I can only invest like $100 , like that's not going to afford me anything and I'm like it's not necessarily the amount that you're investing , it's the habit that you're building Right , and so I think sometimes we often defer the education until we arrive to the moment .
And then right , and then we feel like , oh well , I'm not an expert in this , so let me give this over to somebody else . So I wholeheartedly agree , I think , financial education . We all have to make money , but no one is going to care more about the money that you make than you do . So , why not start caring today ?
Yeah
¶ Managing Debt as a Couple
. I feel like praise music in the background .
She knows what she's talking about .
She knows what she's talking about .
No , I mean , it's true , I mean , but that's with any skill right , and I don't know why people take the skill of either managing your money or investing your money or doing whatever it is that you need to do with your money any differently .
And it's funny because you know I work with premeds all the time , and even the skill of answering questions for the MCAT , for example . You know a lot of them . Wait until . Well , no , I got , I have to do all of the review first before I look at even one question .
And I'm like , let me ask you a question If you or a loved one of yours was pregnant and then they came to me and I'm like , well , I read a lot about C-sections , I read a whole lot about it , ok , and I finished the last page about C-sections today , on the day that you are getting ready to have your baby , am I the person that you want doing your
C-section ?
Probably not .
You know , so you need to build up that skill .
You need to practice it Right , you need to practice . I got a question for you . So your spouse , did he have debt also ?
He did Mm-hmm .
Okay , Now , in terms of the debt , how do you guys look at debt ? Is it in a similar situation where , like is it your debt , Is it his debt ? Your own debt ? Can you do you mind speaking about that at all ?
I don't mind , I'm an open book .
Okay .
So yeah , so it's really interesting . I get a lot of flack from my co-host of our podcast about this , because we kind of have , in the management of our finances and also our debt , like this is mine , this is yours and this is ours , and so we have those three buckets and that's how we thought about our debt .
When I was paying off my student loan debt , it was my debt , so I could do what I chose to do with my debt , and when I was paying it off , my husband was still in residency , you know , so he didn't afford anything to that debt payoff . Now , when he had his debt , there were . I was a little bit more advanced in now understanding .
Okay , what does it look like to refinance , right ? No , seriously , I had a little bit of experience behind me .
You sunned them . You sunned them . You told them exactly what we're going to do . This is what we're going to do right here , Dr Simon . All right , Just follow my lead . That's so funny . That's what Dr Renee did to me , though . Did you know ? No , in a good way .
I did do that .
In a good way .
We made a plan to pay off our debt . Right , our plan was to pay off our debt in about what ? 15 years ?
The first plan was 15 years and then it came down to five years and then I was like nope , we could do it in three Right and I came home from work .
I came home from work and she , like , met me at the door and was super excited about how we could pay off the debt faster than five years . And I'm the type of person who like , if we make a plan , stick to the plan . It really is Because I'm just like I got like I , just when we stick to a plan , let's just stick to a plan .
So she was like no , I got a plan that we could pay it off maybe in three years , or even in , would you say , three or one year .
No , Well , yeah , yeah , yeah . I looked at the three year , the one year and the five year and I was like I think we can do the three year , we definitely can do one .
So I you know she went through all the different permutations of it and I was like , all right , it makes sense . And I literally followed her lead and rather than five years , we did in three . So , dr Brittany , what I'm saying is like , like yeah , like whoever has the knowledge .
That's who we going with , and stuff .
So you know , what'd you tell your husband ? Yeah , so at that time and I love that you listened me to Renee and her plan and Renee , I love that you were excited actually , because I get very excited , like I I go to sleep calculating some of these things and my husband's like OK , just hold on .
I get a whiteboard and I draw it out .
Yeah , so at that time he had a loan that was very , very high interest while we were , while he was in residence , and I'm like I think we could refinance just this one particular loan to get the interest rate down .
And so that's what we did we just took a chunk of that while he was still in residency and we refinanced that and we paid that down pretty aggressively . You know , what I learned from that experience is , when I refinanced my student loans , I went for a five year fixed .
So I knew I had five years and that this was going to be the payment and so I could budget around that , even if I paid extra on it as I did . But for him , because we wanted to get a lower interest rate , we did an arm instead , an adjusted rate agreement .
I guess , it's not a mortgage but adjusted rate agreement , and I did not like like that personally I don't know how you felt about it , but the interest rate just kept going up , you know um , that's the , that's the thing that scares me .
Yeah , because they say variable or adjusted , but it never goes down yeah , yeah , you know , at that point it was not going down , it was it was yeah .
So I didn't like the variability of that and so we paid that off pretty aggressively while he was still in residency and then , once he did his fellowship , when we moved to Boston , we took advantage of an extremely low interest rate and a refinance .
Now , when we did that , we actually had a bit of a different view on debt between he and I , because by that time we did not have a fight , because it was still his debt .
She trying to be nice about it , listen , dr . Brittany we nine years in and podcasting . We know how it goes . We had a little disagreement .
We were eating a little ker .
You know , you know , you know we squabbled up , you know like come on , dr britney , come on no , no squabbling over here , we don't squabble we , we pod it , we pod in here .
Dr britney , tell the truth okay , so let me , let me explain , I think , because some people think debt is the devil , and I don don't feel that way . You know I used to . That's why .
I paid off my student loans so aggressively and I think that I had evolved a little bit in understanding how to leverage a lower interest rate and maybe do an interest rate arbitrage . Put more money into the stock market to build our net worth faster than to pay down the debt aggressively .
But he still had the debt , it was in his name and it was his debt .
So he feels like he has more . He has more at stake .
He has more at stake .
And we also just have to acknowledge how emotional money can be . Sometimes we think about finances as being completely logical , like the numbers say this and this is what you should do .
But there's a huge psychological component to money and I think if we're unable to reconcile those emotions , then we're going to lead down a path that's going to maybe lend itself to different results or at least it will help us to heal
¶ Emotions vs. Numbers in Debt Repayment
whatever emotional turmoil and , you know , dissonance that we're having internally . So I think that that's where we were . I was debt free at that point . I had paid off my debt , so it wasn't my responsibility . This was his debt that he felt was his responsibility .
But I'm like , if you can leverage and put this money in the stock market instead , then we could potentially grow our net worth faster and the numbers are going to make sense . But from a psychological and emotional perspective he's like no , but I still got this debt that I don't want to have .
What did you decide to do , or what did he decide to do ?
So he paid off his debt pretty aggressively and it was at a low interest rate . It was like at 2.9 . And I don't remember the exact amount . I'll have to go back to take a look but I think he had like 120 or 150 at that point when he was in fellowship and paid it off pretty aggressively .
So I think you are absolutely right when you talk about that is numbers , and then there's like the emotional aspect of it . She definitely she describes that emotional aspect better than me . I'm more of the numbers type person . But we paid off $662,000 in three years Whoa , I remember . I remember .
Do you remember those months where there was literally like a 20K payment ?
Yes .
There was like a $20,000 payment that we made to the student loan company , because what we ended up doing is we ended up doing locums in addition to our other jobs to pay off the debt quicker .
So when you talk about that emotional component of like , okay , this is what's in your bank account , and just being like , yeah , nah , that's for Navient , and just push it right into the middle and it's just gone , it was so painful .
But you know , when we saw the next month's calculation , and the interest like decreased so much because there was less principal . That's what you know . Know , the logical side is like , okay , this is working right but that was painful to see that like 20k leaving .
You know it's not like johnny had six apples . You know what I mean . It's not you're not reading something , you know . Just a word . Problem , right you're really really taking this on because it has to do with you , it is personal , because it is personal .
So you know , I mean , I think if he , while the arbitrage is real right , where you could certainly increase your net worth , you know , even faster , the reality is that in order to going back to like building up that muscle of you know paying off or , excuse me , investing and doing all the other things that you , that you can do with your money , that
emotional block is then decreased . You know that emotional block just lowers . And so now he might be so much more open to doing all of those things and taking those risks because he doesn't have the debt sometimes this may be something that it just not for y'all .
Do you see , like what I'm saying is when you feel like when you , when you come from , for example , when you come from , like she was able to do it because she came from flint right , there's that background of like . Basically , what I'm trying to say is when you feel like you don the major breadwinner , sometimes you don't want to take chances .
And you're just like yo , I got to pay off this debt and I don't have time to put my money in the stock market . That would be great . But if I lose my money , particularly if you don't have , if you're not really knowledgeable about the stock market and you're just new to it , and you know , okay , like , look like me .
And you know I'm sure Dr Simon knows now , like you know , the likelihood of you losing all your money . If you do it the right way .
It'd have to be the zombie apocalypse , right , like that's not going to happen , use all your money , but if you don't know that much about it , you're like yo I ain't putting my money , I ain't gambling my money , I'm paying off this debt .
You know what I'm saying and it might be a message , you know , we kind of know that , hey , listen , if we end up having to take loans for any reason and it makes financial sense , then maybe we take more of a balanced approach and so forth , you know . So I I definitely understand his , his sentiments . I do have a question for you , though .
In terms of paying off the debt right once you became an attending , how did you do that like ? Can you walk us through that process of like your income comes in and then how did you pay it off and how'd you do ? How ?
were you consistent .
Yeah .
I piggyback there .
Yeah . So I think a couple of ways .
¶ Strategic Debt Elimination Tactics
One was after I did the refinance and I knew that okay , I've refinanced my student loans for a lower interest rate , but the payment increased the payment was about $2,500 a month because I had condensed and truncated the payoff time . So I went from .
You know , under standard repayment would be 10 years , or even thinking about income driven repayment right under 10 years technically , and now I've decreased that down to five years . So the first thing I did was I wanted to ensure that I could pay off this higher amount and do that consistently , first , before I try to .
My plan was not to pay it off aggressively in two years and nine months .
My plan was to pay it off in five years .
So under a new attending salary I'm still trying to manage stuff . I just moved in with my new husband . You know we're trying to figure out how to work things out . I basically just set it automatic . I removed myself from the equation that payment . They got their payment every single month once the money hit the account .
So this was a new minimum amount that you were paying like a higher minimum .
This was a higher minimum amount that .
I was paying yes when I did the refinance Five hours or five years , and so now then I then I did observations , okay , so now this is automatic .
How am I feeling about my money ? Am I able to do the other things that I desire to do ? We're newlyweds , we want to travel . We'll be stuck in a house .
Right , we want to eat out , we want to go to people's weddings um and so we were still able to do that .
Okay , I'm able to do all that . I maxed out my 401k . I basically just put that on automatic . Okay , and I still have money left over . Okay , what else can I do ? And when we think about finances money it has been given this branding . That is very complicated . It , it's not that complicated , it's actually quite easy .
Like if you could do medicine , you could do money . And so I knew okay , money . The money equation in my mind is your income minus your expenses equals your opportunity . That opportunity was my ability to pay off my debt . And so how do I modify that equation ?
I could work more , do locums and moonlighting and all this extra to increase my income , or I could decrease my expenses , or I could rewrite the equation and I could say income minus your opportunities equal your expenses . So at this point , I was not up for working more , because I've always been an entrepreneur .
So I was working on a hair accessory in the background . That's a whole nother story . I was working on a hair accessory in the background , so I'm like I don't want to see no more patients . I'm not trying to work extra . So how can I minimize my expenses ? And to my husband's chagrin .
Like because I'm from Flint , because I grew up in simple means , I knew how to like make the most . So I essentially decreased our expenses , you know , and I lived very simply and I would unplug things like the microwave and the TVs .
And my husband was frustrated . Good night everybody .
He was frustrated , right , and so I just figured out OK , how can I minimize expenses ? How can I leverage other tools that are accessible so that I can minimize expenses ? How can I leverage other tools that are accessible so that I can minimize expenses ? So you know , at some point we got a credit card with points .
We did not carry a balance on it , but we were able to leverage those points to travel and so it was just kind of doing some of those things . And then , once I mastered that and I saw that there was still additional cash flow , I would put that additional cash flow If I came into a windfall like a bonus . We would get , you know , our bonus every year .
I knew that that was coming in October after everything was done . Okay , Let me put the extra money towards the student allowance .
Okay , all right , thank you for sharing that . So very . I mean , it seems like you were very systematic about things and that you were just very intentional , which is , you know , what we preach on the show all the time is that you know nobody's paying off debt . You know , in two plus years , on purpose .
You know without or , excuse me , without purpose , Right , Like it's not going to be by accident . Right , Like it's not going to be by accident .
You know , you have to , you have to be very purposeful about what you're doing , and unplugging the appliances is diabolical , as the kids say
¶ Future Real Estate Investment Goals
I left the refrigerator plugged in right because I didn't want to waste the food .
Yes , that would have been counter to what you were trying to do All the food spoiled Child .
We got to buy more groceries .
Now , because you did mention earlier that two more or our goal , I think it originated with me . But now my husband's like , yeah , when we , when we buy in our next property , so so to purchase two more this year , I'm just I'm not ready for it . I think my husband's like , yeah , let's do this thing , but I'm not not , I'm not ready for it yet because .
I still want to read a little bit more . I want to make sure that I can evaluate properties pretty quickly , understanding , you know , cash flow , the returns and all of that and I just haven't practiced that enough . So it's a goal for this year and we're going to achieve it . I'm just not . You know the first quarter . I'm not ready yet .