¶ Balancing Medical Career with Side Hustles
There's always this craze of yeah , you're a full-time doctor , and then you still got home life , and then you also have these side hustles . There's got to be a way to prioritize all of this stuff . What's your advice in terms of prioritizing , making sure that you don't get too over-leveraged in real ?
estate . There's all these different ways to invest in real estate that are totally reasonable . At one end of the spectrum all this publicly traded real estate you're very diversified . It very diversified , it's very liquid , it's very passive , it's very easy .
At the other end of the spectrum , you're buying properties with nothing on them and you're getting permits from the county and you're building the place and you're renting the place and you're managing the place and there's all this other stuff in between . You know private funds and syndications and turnkey properties .
The most important thing is to match you and how you want to invest in real estate to where you fit on the spectrum . I think you got to dial in what you like . Do you like running short-term rentals , getting landlord style calls , not having the control with a syndication or a private real estate fund ? Does that lack of control bother you ?
You got to look at all those factors and decide where you fit .
Hey let's do a little quick change . Real quick , because I want to talk about some of the current policy impacts on student loans , because there's some changes that are being proposed . If I was a med student right now , or if I was a resident
¶ Real Estate Investment Spectrum for Doctors
, I'd be a little bit nervous as to what decisions to make , and so forth . So there's proposals to possibly end PSLF , possibly proposals to put caps on loan forgiveness . Man , what a time .
You have no idea this changes like literally weekly . Yeah , I mean a few years ago I found this so hard to answer these questions coming in from regular listeners and readers on my blog that we actually started a company .
Yes , I saw it .
It's dot com , because I'm like I cannot answer your question in a 30-second email response . You need an hour with an expert in a spreadsheet . And so we hired somebody who actually made this his career , this fellow by the name of Andrew Paulson , who runs this for us , and that's what he does .
He meets with literally hundreds of docs every year and helps them walk through this stuff , and so he just sent me a message yesterday . This is literally yesterday . I got this at 1243 PM yesterday .
He's like hey , a couple of big things come down the student loan pipeline that you ought to be aware of and then talking to people about this is just stuff that happened this weekend before we were I don't know when , don't know when your , when , your uh , you know podcast goes live .
This will change . I might be out of date by then .
But anyway , let me give you the updates that he said . You got to know about this because people are going to be talking about . Here's the first one . The save plan has been . You know , it's been about dead for the last few months and it's even closer to being nearly dead now Save is going away . It was too generous .
It really was a nice program for borrowers . I can't express how nice this would have been for doctors indebted doctors to have access to for decades . But as a taxpayer , I go man . That's awfully nice for doctors . No surprise , this one's going away . It was .
It was an IDR program where basically your loans no longer went up in value in residency even though you basically weren't making payments on them . So that thing's going away . What most people are probably going to end up in is the new IBR program , and so repay , pay , save probably all gone . It's interesting .
You got to think about this stuff from the perspective of how did it get put in place ? Did it get put in place by executive fiat or by an act of Congress ? And if it went through an act of Congress , it's much more likely to be long-term .
So IBR went through an act of Congress , and if it went through an act of Congress , it's much more likely to be long-term Okay . So IBR went through an act of Congress and that's why that's probably what we're reverting to . All the other stuff was . You know , that was an executive action .
Pslf also went through an act of Congress , so it takes an act of Congress to get rid of PSLF . President Trump can't just sign a paper and PSLF is gone . That's not how it works , and so I think that's an important thing to recognize . So the save's probably dead .
But if they're talking about it , particularly with PSLF being the major thing that a lot of residents are relying on , even attendings are relying on , it's scary to be hearing that , wait , you're talking about this , I've already started PSLF , I'm two years in , or I'm three years in . So what does this mean in terms of which residency
¶ Student Loan Policy Changes and Updates
? Or , excuse me , what job am I going to take ? Can I take it at a for-profit hospital , which most people probably aren't even thinking about ? But these are things . Should I go into locums ? That's a big , scary thing too . If you go into locums , you are out of this right . So yeah , I'm sorry , but I cut you off , Go ahead .
Here's the deal with PSLF , right . I mean I would act as though it's going to happen , as if it's going to work , because it does work . Lots and lots and lots and lots of doctors have had 200 , 300 , $400,000 forgiven via PSLF . It's in your promissory note . You have a contract with the government for PSLF .
I think anybody already in the program is going to be grandfathered into any changes that take place . So I would not panic and bail out of PSLF because people talk about it going away . It has not gone away . It is still there . You might be using a different IDR program to make your payments , but PSLF is still there .
Different IDR program to make your payments , but PSLF is still there . And assuming that is your student loan plan , I would stick with it until 100% for sure it's gone . And if you're really worried about it going away , I'm actually not that worried about it going away for people who are already in the program .
If you're worried about it , what you should do is you should save up what I call a PSLF side fund . This is money you would be using to pay off your student loans quickly . I tell people live like a resident for two or three years after you finish residency , pay off your student loans .
So you're sending them $5,000 , $10,000 a month payments to your student loans .
I remember those days .
Yeah , that was something we got to . 20k . Yeah , instead of sending them to your lender , put them in your investing account and then , if something happens to PSLF or your career plans change , take it out of that investing account . Wait , hold on , wait , hold on . I got to say wait .
With the way how the stock market is going too , Jim , hold on a second .
Maybe are we sure about this , maybe not all of it . Stocks , put it in the money market fund , whatever . But the point is you have , you have the money you're earning on it and if your plans change , you're not behind . You've still got that money you can put toward the student loans . That that's my thoughts on pslf . Um , we don't .
We don't think that's going away , for those at least who are currently in the program and for everybody else , the only way to make it go away is an act of Congress . Okay , so that means the president's got to sign it , it's got to pass the house of representatives and it's got to pass the Senate with the filibuster proof majority . Right , that's 60 senators .
Well , a lot of the Republicans will vote to get rid of it . But count the Democrats that will vote to get rid of it , and I bet you can't come up with enough of them . How good is Cory ?
Booker's bladder , you know .
How good is Cory Booker's bladder . Cory Booker's bladder .
How long can he fill up his ?
I'm shocked he didn't go full-blown .
Foley , did you know he released his whoop ? You know that ring whoop or that workout thing . You know I'm talking about ?
no , I know he walked for like 25 hours or something , but I didn't know what he was talking about . Is that what he was talking ?
about . No , no , no . So he had . Well he was . He was filibustering . I forgot what he was filibustering , but sorry that's deportation got up there to get a contest speech , didn't he , in essence ? But what he had on is he had on this , this medical device , right , but they sell it to consumers .
It's like they have a ring but they have a whoop device that does the same thing . It wraps around and it it can tell what your heart rate is , it could tell how long you sleep if you go to bed with it . And like he released that and it showed , like , how , like he was becoming tachycardic at certain points .
Oh my gosh you know , you know how much dehydrated he was and it was really interesting to kind of follow , like starting at hour one , all the way Can you not drink when you filibuster and then ? I shouldn't .
Put in a Foley Like I would have gone full blown Foley . Are you crazy ?
No , I'm not crazy , no way . I would gone full-blown fully no , you're not to not to get be your girl , so that I don't know if that no no way . What's the no ?
it's 25 hours I mean I've spoken for three or four hours before been up on a stage in front of people . You're exhausted after that .
I can't imagine for yeah , 15 or 24 hours you gotta , you gotta really care , I guess , but okay so a couple other changes people should know about student loans .
One is that you're going to be able people haven't been able to even apply for the IDR programs for the last few months . Well , you're going to be able to soon start being able to apply for those again May 10th , I think , is when it goes , so you can start applying for those programs again . So that's good .
But there's another thing that's like a bombshell this weekend that people ought to know about . There are a bunch of people that used to be , you know , filing their taxes married , filing separately to try to get some advantages with their student loans .
Right , because you basically , if you're married to an attending , you were trying to show that you had this really low resident income .
Right , right , right .
Well , this change that's happening now is that they're going to count your spousal income , right , right , right . Well , this change that's happening now is that they're going to count your spousal income , even if you're filing married , filing separately . They're going to count your spousal income when they're doing student loan calculations .
So this is this is breaking news and and people ought to be aware of this If you're using that technique , it might be time to rethink your technique . You might need a new plan . Maybe it's worth going and spending a few hundred dollars with Andrew and getting some specific student loan advice , but you know , be aware of that change coming up .
Is this all mainly because ? Is it trying to increase revenue or like what is ?
the . This is pushback from the conservative side of the political spectrum , right .
Basically , all these people that are like I didn't go to college because I didn't have the money , or I paid my student loans back because I borrowed the money and feel like I should have paid it back , feel like a whole bunch of people are getting um breaks they shouldn't be getting right . They're getting forgiveness on loans . They should be paying back .
Or they getting these sweet deals on their income driven repayments . And why are doctors getting $400,000 forgiven if you know they make so much money ? It's kind of pushback against that . So now , with Republicans in control of the House
¶ PSLF Guidance and Strategy
and the Senate and the White House , you're seeing some of that come back into student loan policy .
Because you know , I find it , because I wonder is our doctors just part of , like the mass casualty ? Is it , like you know , just you're just part of the fight to yeah , I don't think it's because we're so with such a small percentage . Yeah , yeah .
And you see it , you know the administration's sending all these mean letters to Harvard . You know , that's what I was reading in the news this morning Harvard's like we're not going to do what you want us to do . Yeah .
That's a lot of money Two billion .
In our country there's a bit of a . We have a culture war going on . It's a culture war against coastal elites , educated people and guess what ? That's a lot of doctors .
It's called hateration .
Well , it is for better or worse , and we're just trying to live through it and manage our money as best we can .
It'll be interesting to see over the next five years . It'll be interesting to see over the five years . I'm interested in the subspecialties , or the specialties that are chosen . I don't know if it's going to make a difference now , but it's just interesting to see what , like these , you know what the student loan programs would do to that .
Will it shift that stuff ?
Will it shift ? People pick specialties to make money more Right , that's the part that I'm interested in . Or will they still become an academic pediatric endocrinologist ?
So okay . Another question I have Okay , so interest rates close to seven , at least for home mortgage rates , is the advice you gave back in 2011 , 2013 , 14 , 15 , 16 , is this still available now where , like you know , there's always this arbitrage that you have with what your student loan rates are versus investing in the stock market ?
What are your thoughts now ? Have you changed any of that , uh , any of that dogma at all ?
Well , I don't know that I've really changed much of what I talk about . I've always talked about how this is an individual decision and it's very interest rate dependent right . So maybe for somebody early in their career , maybe taking some additional leverage risk in their life is a reasonable decision to help them meet their financial goals .
And they've got a mortgage at 2.75% Well shoot , maybe it makes sense for them to invest with additional cash they have rather than pay off the mortgage . I think the calculation changes when you have a mortgage . That's 7.5% , though .
7.5% is a very attractive guaranteed return for an investment , right , and if that's what you can get by paying off your mortgage , well , that might be worth doing rather than investing that money . So , in that respect , I think interest rates have changed .
Obviously , people's personal situations and personal lives change and over the years , you know , maybe carrying that debt's not so necessary . So much for you to meet your financial goals , and it's time to you know , drop a bomb on your mortgage and get rid of it . You know we paid off our mortgage in 2017 . It was a 2.75% mortgage .
At that time , money market funds were paying 1% . Right we were coming out . I feel like when you bought your house .
It was like black and white .
How long ago was damn two point something percent no , I were you sending the beef off to school , gee wally it feels like that .
I mean , I rode , I rode my dinosaur to school and it was uphill , but we actually didn't get 2.75 when we bought it . It was before you could get that . When we bought it , we refinanced into 2.75 .
Nice , that's a great interest rate .
People don't even want to move now to have those sorts of interest rates . They're like I can't move , I can't afford the new mortgage . And so as the years go by , people are going to have higher interest rates for sure . Eventually those mortgages either get paid off or people move , or they refinance them or whatever .
But for those who have them , man , it makes a lot of sense to borrow money at 3% and make 4% in a money market fund , or maybe make 7% or 8% or 9% in the market . It makes a lot of sense .
But that's a very individual decision of how much debt to carry and when to pay it off and what you do with your extra money , whether it goes toward investments or paying off debt . Yeah , a lot of variables there and I wouldn't say there's one right answer for everybody by any means .
¶ Interest Rates and Debt Payoff Decisions
Yeah , I think it's kind of , you know , kind of the same thing that we were talking about before , right , where you have to figure out what works for you , for me , you know , and for me , when we were paying off our student loan debt , you know , we did get a lot of questions as to , well , why pay off the student loan debt when you could be investing
this money ? And for me it was just I don't want the psychological burden of owning this or of owing this student loan debt , like it was just way too much . And I think that that's the factor that a lot of people don't necessarily consider .
When they're just looking at numbers and saying , hey , this is what you should do , because this is what makes sense , it's like , yeah , but how successful am I going to be at doing that if I have this other thing that's just eating away at me ?
Right . Well , there's more to it than that , Renee , too . I mean , you make different career decisions when you don't have that debt . Right , you take more chances with your business when you don't have that debt , Exactly Right . I mean , we paid off our mortgage . Was our last day we paid it off ? I think 2017 , I think it was the summer of 2017 .
And , uh , we haven't taken out debt since . Right , we don't miss it . We can always go out and get another mortgage if we want to . We don't miss it . We're not going back to get it by any means .
And uh , so there is this whole other way to live and , um , and we have definitely taken business risks we would not have taken if we still had debts Um and uh and they paid off . So it's not just a simple looking at your rated projected rate of return and the interest rate on your debt . There's more to it than that .
Yeah , that's that gray zone . That's that gray zone of how you live of who you are like what your ethos is . You know that when you look back in 20 years , you're
¶ The Freedom of Being Debt-Free
like , oh man , like this is what . This is the decision that we had to make , like part of the decision that we made . One of the decisions we made was to leave our employee job while she was pregnant and to start doing locums , but 90 percent of that was based off of we had paid off the student loan debt .
Yeah , we're very close to Several months before that . So we just said look , we you felt empowered to make that decision Right . The finances were . You had flexibility that you didn't have .
So , but how do I put that in a spreadsheet to somebody else and say well , this is why , financially it made sense . To us , it was just like , yeah , why would you leave your job when your wife is pregnant ?
Right , like that's nuts . You know well , I view this , you know you . You ask it as a simple question . That's how it usually gets asked , but I view this as probably the second most complicated thing in personal finance . I think the first one is whether you make Roth or tax deferred contributions , but the second most complicated one is investor pay down debt .
Uh , there's just so many factors that go into it and so many individual aspects to it . If you think this is an obvious answer all the time , you don't understand how complicated it can be .
Right , what's good everyone . This is Dr Nii Yo . This is the end of this segment . I appreciate you for listening , but this ain't the end . If you want more , go ahead and click the next button on your favorite podcast app . Listen . That's next for more banter between me and Dr Rene . That's next for more topics . That's next for more segments .
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