Docs Outside The Box
Hosts Dr. Nii (Ghanaian) and Dr. Renee (Haitian) are first-generation physicians who paid off $662,000 in student loans in 3 years - while figuring out contracts, career moves, and money management that their colleagues learned at home.
Every episode covers what first-gen docs need to know:
- Contract negotiation and career decisions
- Paying off debt without family financial guidance
- Building wealth from scratch
- The questions you don't know to ask (but your colleagues already knew)
Real strategies from doctors who had to figure it out on their own.
Subscribe and build your blueprint with us.
Download: The First-Gen Doctor Blueprint
Docs Outside The Box
REPLAY: Money Trap #4 - Debt is not a substitute for cash! #303
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
SEND US A TEXT MESSAGE!!! Let Drs. Nii & Renee know what you think about the show!
In this episode, Renee & Nii discuss how the common forms of debt (student loans, consumer debt, mortgage) keep you stuck in the rat race and burnt out!
Things to expect in this episode:
- Renee clarifies how much she really owed the IRS
- The Top 10 Medical Schools that keep their students in the highest debts
- Why you should consider refinancing your loans
- Why the Darkos don’t co-sign loans for anyone
Resources listed:
Student Hero Medical School Repayment Guide
How long should a car loan be
10 Medical Schools where students leave with the most debt
WE WANT TO HEAR FROM YOU!!!! FILL OUT THE DOCS OUTSIDE THE BOX PODCAST SURVEY (in partnership w INCROWD)
INCROWD
MAKE EXTRA MONEY AS A RESIDENT OR ATTENDING - COMPLETE MEDICAL SURVEYS WITH INCROWD
WATCH THIS EPISODE ON YOUTUBE!
Join our community
Text word PODCAST to 833-230-2860
Twitter: @drniidarko
Instagram: @drniidarko
Email: team@drniidarko.com
Podcasting Course: www.docswhopodcast.com
Merch: https://docs-outside-the-box.creator-spring.com
Check out the jobs St John Associates have HERE
three, two, one was good everyone. I am dr knee. I am joined by dr renee christian alfred, go ahead and give us some confetti. Please, please, please, please, welcome everyone. This is another episode of docs outside the box, where we are fusing money, medicine and pop culture as well as no, I don don't say as well as anymore. I've stepped my game up, renee, don't try to trip me up New host, new laptop, new microphone.
Welcome to Docs Outside the Box
Speaker 1You know I'm not making those mistakes anymore, but listen everyone, welcome back. Thank you very much for listening. Those who are listening to us through YouTube, those who, sorry, those who are watching us through YouTube, youtube, thank you. And shout out we are slowly but surely building our, our subscriber account so we got up to.
Speaker 2We got up to about 302.
Speaker 1yeah, we're doing good with that. So everybody who continues to listen, I'm telling you the video experience is quite different yeah, alfred does a great job. Yeah, I'm missing out. Yeah, I'm missing out. I mean, christian does a great job on audio experience, but also at the same time.
Speaker 1So many people are used to listening to us on audio hey we also got a video experience, guys, so you might as well check it out. And, once again, thank you for everyone the day ones who've been listening to us on the podcast. We appreciate it when you're working out, when you're operating, when you're in clinic, when you're driving, wherever you are and you're listening to us when you're pulling clinic, when you're driving wherever you are and you listen to us when you pull your hamstrings, like you said the last time.
Speaker 1Strings yeah, we appreciate if you getting your hair twisted braided. You got three people rain yeah mm-hmm, we appreciate all of that. So, dr Rene, that's I'm in a hotel, you, you. At home, kids are asleep, we recording this.
Speaker 2Late.
Speaker 1Yeah, life is a lot different now than how life was five years ago, even 10 years ago. 10 years ago we just got married or close to gotten married and you know we always tell people. When we got married we found out we had like almost $700,000 through the loan debt, yep, and it was crazy.
Speaker 1We didn't know what to do we're broke as a joke yeah, we also had a lot of other debt that a lot of people don't know about. So, everybody, we not only just had six hundred and sixty two thousand dollars student loan debt, but renee also was on the was on the lamb. She was running from the irs. The irs is coming for you, like you was vince, was it not vince? What's his name? Something al capone? Right? Renee didn't want to pay her taxes, right?
Speaker 2so imagine that we're trying to get married.
Speaker 1We're trying to get married and it's time to like tell each other what's going on, and renee's yeah, I was trying to cash in.
Speaker 2I was like, yeah, I'm about to marry a trauma surgeon, he gonna pay this debt I was still driving a jetta.
Speaker 1I was still driving a nightetta. I was still driving a 1999.
Speaker 2Volkswagen Jetta. Yeah, we were going to trade in that Jetta for that IRS debt. That's right. Clank clank, I clank clank.
Speaker 1Yo Nii, I want to tell you something right now, but I got all this IRS debt. Well, how much IRS debt you got? It's probably like $2,000, $3,000, $18,000.
Speaker 2Yeah, I was doing locums. I had done locums pretty much for a whole year, but at that time I did not understand the concept of being an independent contractor and I wasn't even like.
Speaker 1I wasn't even an LLC technically like I was basically what she's saying is if you don't know what being a locums is, basically she was getting paid and they would pay her a certain amount, but they wouldn't take money out for taxes, they wouldn't take money out for health care, they weren't taking money out, nothing. They just gave her a large lump sum. So imagine she got a hundred dollars when she really, if she was working, if she was employed, she probably should have got like fifty dollars.
Speaker 1So sis wasn't taking money out to give to the irs because they wanted their money. So you was getting all this large sum of money and you wasn't paying the irs. Yeah, man, I had to come swoop in and save you, oh please, whatever clank clank, I plotted and I schemed I remember that I was literally. I was like wait, not only do we have student loan debt together, now I gotta help pay for your damn irs debt dad, ever please, and you brought in your house, so don't even try it but at that time when we were dating, we really it wasn't really debt.
Speaker 2It was being paid for you just straight up brought, just like yo the irs on our backs, you know whatever you brought in a house that had hoa fees that kept going up and finally we realized we weren't even making money on that house anymore.
Speaker 1We weren't losing money, but we weren't whatever we were just breaking even every month which I don't know if that's just as bad, but I mean for us it wasn't it wasn't great so guys, I finished, I started residency. As soon as I started residency. This is 2006. Yo, right on that bubble, that bubble, yo, it was in atlanta. I had no money down, had nothing saved up and they were giving loans to everybody and I got a three bedroom, three and a half bath. The house was dope, townhome uh, what do you call it? It's like a townhome um condo complex uh condo condos and stuff.
Speaker 2Right outside.
Speaker 1Atlanta, right near like it was in Mableton, and yeah, it was $175,000. That was debt and I had a really bad tenant when I was in Miami. And it was one point where I had to start using credit card debt, or I had to start using my credit cards to make those payments. It was bad. So by the time I also finished, I had $25,000 in credit card debt.
Speaker 2Cause that's what I was going to say.
Speaker 1Well, actually no, remember I paid that off before we got married, so whatever.
Speaker 2Yeah, and then it impinged on our wedding plans Cause then you got mad at me cause I got the trolley.
Speaker 1Then we also had car payments. Right, you had your lease.
Speaker 2Mm-hmm. Yep, I had my lease.
Speaker 1What was that? That was a Nissan Sentra.
Speaker 2Yeah, I love that car.
Speaker 1Yeah, that was $199 a month or $189 a month?
Speaker 2I think $189 a month, if I'm not mistaken. That was a good car.
Speaker 189 a month, if I'm not mistaken. That was a good car, yeah, the first one was the second, sentra was.
Speaker 2That was yucky.
Our Personal Debt Journey Revealed
Speaker 1So I think if we totaled out all of our debt, we probably had roughly about $900,000 of student loan debt. Probably Not student loan but like of debt. Yeah, debt in general, and we had no clue about that.
Speaker 2Tell everybody why we're even talking about this, because I don't even think we introduced. Why we're talking about all of this? People just think oh, they spilling the tea today, hunty.
Speaker 1Well, we spilling the tea today on purpose, because this episode is money trap number four. Right, Money trap number four, which is one of the reasons why doctors get burnt out, why they spend so much time working, why they spend so much time doing things or pulling themselves away from what they really want to do, which is, you know, work, but they don't want to work all the time and they want to spend time with family. So my trap number four is is having too much debt.
Speaker 2That's a big deal.
Speaker 1We talk about debt a lot in the show because it played a major part in our lives.
Speaker 1It played a major part in where we live. The page played a major part in our lives. It played a major part in where we lived. It played a major part in how we practice. It played a major part, possibly, if we could even start a family right, because debt, debt played a major role in if we were going to do IVF or not and how we're going to pay for that and how we were going to pay for that.
Speaker 1Yeah, yeah, so that was something that I think we were. I think for me, debt in general was something that I was when I, when we finally did all the mathematics and had our first meeting together, which to this day, I I think it was very contentious when we started talking about how we were you always talking about that and I'm like it actually was not that bad I was.
Speaker 2Well, it was not that bad me, you know, please, I've been knowing you 20. We have had way worse fights than that.
Speaker 1For the friends who know us and are listening, you know, to pray for us.
Speaker 2Y'all know how Nia Renee get down.
Speaker 1You know you had to pray for us. You know we made it, though we're still trying. But don't listen to Dr Renee. It was beef. It was beef. Beef was an ICU. Dr Rene, it was beef. It was beef. Beef was an ICU, guaranteed to be ICU, All right. So listen, All right.
Speaker 2Let's stop stalling and let's get into the meat and potatoes. The money trap number four that keeps doctors burnt out.
Speaker 1So, listen, guys, the reason why we brought this example up is just to let you know that we had a ton of student loan debt. We had a ton of consumer debt. We had a mortgage. We had a ton of student loan debt, we had a ton of consumer debt, we had a mortgage. We had a whole bunch of different things. There's a lot of um debt that we all deal with that we, to the most part, I think, we normalize, we end up living with. You know, depending on which financial guru you listen to, they may say you look at it like a pet or you treat it like a plant. Um, and that was us and we went.
Speaker 1Possibly could have been us even at this point, 10 years in, right, like yeah well, you know, student loans are just part of your life and you just pay it based off of that coupon book and you make those payments until you're maybe in your late do they even send the coupon book anymore? I don't know if they send a coupon book anymore. Anybody who knows?
Speaker 1because we ain't got loans anymore, we ain't gotta deal with that exactly but I'm sure they have a way to send stuff to your house where listen? They'll mail it to you and they will find you right if they don't get we will find you they'll find you and they'll send you that thick book that you gotta flip right yeah I think it's it's really key to also really quickly talk about. One thing, though, is, even at that point where we had all of this debt, I felt like I didn't really have a spending problem.
Speaker 2No, remember we had that discussion.
Speaker 1And I think people from the outside looking in would be like yo y'all had a spending problem, because I don't understand why you would get a $175,000 house, renee. I don't know why you would have $18,000 in debt. You also got a car payment, but I really felt like I didn't have a spending problem.
Speaker 2I don't know about you.
Speaker 2No, I felt like I didn't have a spending problem either. Right, like you know, I wasn't somebody who went out and just spent just to spend. Right, I spent on things that I felt, like you know were, for the most part, necessities, you know, for me, and that you know, that doesn't mean that I didn't go out and, you know, go to restaurants and things like that, but I was. You know, I felt like I kept my money. I kept my money close enough to me such that I got what I needed, but the problem was that I was probably overspending on things that I actually needed, if that makes any sense, right, like. So I wasn't splurging like, oh, I want these jeans, I want these shoes, I want this bag, I want this, whatever, it was things that I needed, but I wasn't very intentional about how much money I was spending on the things that I actually needed, and I think that's what happened was that I overspent on those things.
Speaker 1Yeah, that's what happened was that I overspent on those things. Yeah, I, I just didn't do a good job of saving my money. I'll just be honest with you. With that, I just would just spend money. And I didn't buy Jordans, I didn't buy any of those things. I didn't buy none of that stuff. I just didn't know how to save money. I wasn't paying attention to it and I was just hoping that I got the next payment.
Speaker 1You know, two weeks later and yeah literally half of my payment went to my mortgage anyway. So that was that was a huge issue for me, but um, so, real quick, before we go on to our next session, I want to. I think something's really interesting. I found this. This is from 2019. This is where is it? I think it's something that people want that have the highest amounts, or the students are graduating with the most amount of student loan debt oh, it's crazy if this is your school all right, let's start.
Speaker 1Number one this is from US News and Report, so you know they do their research. Number one school Western University of Health Sciences. I think that's an osteopathic school yes, that's an osteopathic school yep tuition in 2019 2020 was 59 000 dang. The average indebtedness of the graduates of 2019 295 000 wowza second nova southeastern, I think that's the osteopathic school.
Money Trap #4: Too Much Debt
Speaker 2Yeah, go, do go in state 54 is the first, is the first two letters of dollars yo out of state 61 000 average in deadness of 2019 grad 286 000.
Speaker 1oh my god. New york medical college that's an MD school. That's an MD school. $54,000. $54,580. Average indebtedness $258,000. University of Illinois how is University of Illinois that high University of Illinois? That's a public school, right, I thought so. $46,000. Out of state $93,000. Wow, that's probably how.
Speaker 2That's probably how I made the list.
Speaker 1Yeah, west Virginia School of Osteopathic Medicine $21,000 if you're in state, $52,000 if you're out of state.
Speaker 2they really want you to come, they really want you to, really want you to be in state. Yeah.
Speaker 1Yeah, Rowan University School of Osteopathic Medicine $41,000. In-state, Out-of-state $66,000.
Speaker 2Yeah, they de-incentivize coming from out-of-state.
Speaker 1EVMS Eastern Virginia Medical School $32,000 in-house out-of-state.
Speaker 2Not in-house.
Speaker 1Or in-state, you get what I'm saying. And then Drexel University, ohio university, georgetown, rounded up, but georgetown is at the bottom at 232 000. That is crazy. So you're already starting off in the starting out behind the eight ball. Yeah, then if you're not careful and you start going through residency or you go through, you know, attending, you're like I'm, you know, I've been delaying this and I want to get that and I I'm going to custom. That is like Chris Rock.
Speaker 2I'm a custom that is.
Speaker 1I'm a custom that is I want to get a Tesla, I want to get an S5. I want to get this nice car. A yo, that debt yo is going to build up and it's going to come after you, man.
Speaker 1So, that's something that I think people got to be careful. And next, you know you find out that your paycheck that you get from whether it's residency definitely when you are an attending you find out like half of your check is going to pay, is paying off your car payment, half of your check is paying off all of these different things and you're like the second half of your check you probably just trying to catch up and try to build savings, if that, if you've been thinking about that, yeah, that's crazy.
Speaker 1Yeah, we were there, guys, so don't think we making this up.
Speaker 2We were there right, we were definitely there. And you know, it's it kind of like what you said, right, you're catching up. Literally it takes you, it takes you two paychecks to be able to pay for your necessities, right, and you know, sometimes people are like, well, what's the problem? Like, as long as you know the month, as long as I could pay for everything you know over the month, it's like yeah, but how much are you saving, how much are you investing? How much are you, you know, putting towards retirement?
Speaker 2because if it takes you huh, right, huh investing huh if it takes you two paychecks to be able to pay your mortgage right, Like if it takes one paycheck right and then two weeks, two weeks later, half of that other paycheck to be able to pay your mortgage alone, then the rest of that half of the second paycheck. Like you still got utilities to pay, you still got other bills that you need to pay. It's like you literally are going to be living paycheck to paycheck, so paycheck to paycheck.
Speaker 1I think in. I think in terms of just like accruing things that are just going to increase the amount of debt that you have. I think my advice to people is I think the most important thing is I understand that you've delayed. Wherever you are at, if you're in law school, med school, nursing school, pa school, there's going to be a certain amount of delaying gratification that you're going to get. I get it. The thing is is that, like adding all of this stuff together, you find out that way you did all of this sacrifice just to get a paycheck so you can pay off all this debt. That's crazy, yeah. So I think it's really important to understand. A baseline thought process is is look, what do I desire versus what do I need.
Speaker 2Right.
Speaker 1And I think the real flex is trying to keep what you desire as low as possible and really focusing on what you need. I'm not saying like you have to live a very minimalistic life even though there's there's there's um, there's a lot to be said about that. And I think that a lot more people are starting to say look like minimalistic. Minimalism is where is that? Right but I think most people who look at minimalism look at it as you're denying yourself something right, which depending on how you look at it.
Speaker 1You may be right, maybe wrong, but I do think that lusting after things and, you know, purchasing things and going after all these different things, maybe because you didn't get in your 20s, is going to cause some problems when you're in your 30s and 40s, you know yeah yeah, I mean, people want that really nice lifestyle, right?
Speaker 2I mean, that's the thing.
Speaker 2When you're a pre-med and you start thinking about what life is going to be like when you are a physician, right, when you finally cross over that finish line, you know, you have in your head this picture of what it was going to be like, what, what you were going to be, things you were going to have, things you were going to be able to do, and now to get across the finish line and then have to say, well, no, you know, erase that picture, because you're not there yet. I think that's very hard for people. That's a very harsh reality for people, and I think, honestly, at that point they're just like not even thinking about how that picture is inaccurate in comparison to their income and their debt. Right, they don't look at their debt to income ratio. All they can think about is this is what I want my life to be. I finally have, you know, the authority to make certain decisions for myself, you know it says MD right it says DO exactly, and now I can do what I want and not to mention.
Speaker 2Not to mention that there is also, I think, the societal expectation that, oh you, a doctor, like how are you driving a Pinto? You know, how are you driving a Pinto? You?
Speaker 1know what I mean. How are you?
Speaker 2driving a Toyota Corolla. How are you driving a Toyota Corolla, right? That's what we drive.
Speaker 1We drive a Toyota Corolla, guys, just so y'all know.
Speaker 2Yes we do so. You know, there's that expectation too, right? I remember I pull up in my you know 1991 Nissan Stanza and yes you, I would valet that thing if necessary.
Speaker 1That was not an attending. You drove your Stanza until residency.
Speaker 2Well, when I was a resident, you didn't even finish residency. Hold on, hold on a second. No, no, no, hold on.
Speaker 1Hold on, stop trying to act like five years ago you was driving your 91 Stanza.
Speaker 2Hold on, stop playing. But you got to understand. People buy these things as residents, right, people buy these things as residents Buy what as?
Speaker 2residents Buy cars, buy nice cars as residents, because now they're making an income whereas they never made an income before. You got to remember, some people's first job is doctor, right, like, you go to high school, you go to med school, or, excuse me, you go to college, then you go to med school. Your first job might actually be residency. Your first job might actually be as a doctor, and so you're making some money for the first time. You have no clue, like, how much money is really this money? Right, you don't know what it is. They, you, oh, you're gonna get you know fifty thousand dollars. Hey, you guys need to be following aldwin sumari.
Speaker 1He is now. He's a resident. Now, right, yeah, he's a resident.
Speaker 1So aldwin sumari, uh, just graduated from philadelphia college of osteopathic medicine he's on the atlanta georgia campus and um has made a name for himself on social media. Very colorful guy, very, uh, great personality, um. And now he's on social media talking about how, as a written, as a medical student as a medical student, he was just paying for everything right writing loans, all co-signing, all this stuff, and now that he's a resident, he finding out like he put in all these crazy hours and he's still not getting money.
Schools with Highest Student Loan Debt
Speaker 2I think he did the mathematics yeah, he's like it's less than minimum wage. Welcome to medicine yo, we got to find that and put that in the show, that post yeah, we gotta put that post in the show notes, but uh, but yeah, I mean, so you have to understand too, right, like why you do that well, you to my point, then you go.
Speaker 1But why people do that?
Speaker 2But but rest in peace, tommy Ford. But people do buy stuff in residency right, and then it just starts accumulating from there. You bought a whole house in residency right. How many people people it doesn't matter, but you had the debt, and that's what we're talking about today. Right is people have too much debt for the amount of income that they have and for the amount of debt that they already have right.
Speaker 1So before. So before we'd be able to tell people get a used car, but the used car because the semiconductor, semiconductor um, demand or supply is down. A lot of these car companies can't make these new cars with, you know, the infotainment systems or you know you have a tesla.
Speaker 1It's really hard to build this car. The majority of the car is a semiconductor or just in general. Covet guys covert really happened and there's a lot of workers who weren't able to go back a lot of companies. Covid really happened and there's a lot of workers who weren't able to go back. A lot of companies that you know. The production line is just not the same as it used to be, so there's a big shortage of new cars out there.
Speaker 1So the used car market is going up like crazy and, as a result, a used car is just as expensive, if not more expensive, than an MSRP. So, the reason I'm bringing this up. What you said, too, is like if you are even looking for a used car is just as expensive, if not more expensive, than an MSRP. So the reason I'm bringing this up. What you said, too, is like if you are even looking for a used car now as a resident or even as a as an attending I got some stats Hold on.
Speaker 1It says the average car payment as a first quarter of 2022 is averaging $648 a month Yo $648 a month and then the average, the average. Basically, the average car loan term is now 72 months 72 months.
Speaker 2There you go.
Speaker 1Hey, alfred, you know I don't want to do math. Alfred, put the math right here on the screen, please. You asking Alfred to do the math now? 72 months, how many years is that? Hook it up. Hook it up. I don't know how many years that is, you don't know how much.
Speaker 272 months, yeah, that's six years. Hello, I'm a doctor. Now, you know, the whole keeping up with the Joneses, you know, really does stick with people and they and they're trying to do that, even in residency. But then once they become attendings and that five figure salary turns into a six figure salary, I mean it can be really detrimental to people's you know, to people's lifestyles. So they think that their lifestyle is about to get better, but actually what's happening is potentially it's getting worse, because they realize they have more money but they don't realize that the debt is still taking up a big chunk of that money. Nickel and diamond, right. And then they're buying even more. They're buying even more on credit, right, they're buying even more on credit. So they're swiping their cards, you know. They're getting a new car, they're buying a bigger home, you know things like that, right.
Speaker 1So you know, and you got to be careful because some people, you know, some people try to use the whole credit card thing of well, I'm travel hacking or credit card hacking.
Speaker 1so right you know, I'm using my credit card for all of these home expenses or maybe these expenses when I'm on the road and I'm getting these points, but you got to make sure that you're paying that stuff at the end of the month, right? So no interest is making, because that's they're able to. That's how these credit card companies are able to offer all of these benefits, is there's?
Speaker 1a significant amount of people who don't pay their monthly balance. The interest that they make off of that is how they're able to provide all of these great benefits for everybody. So if you pay that on time. They're not making any money for you off of you and they're gonna actually hate your guts. But you know you just gotta be really careful.
Speaker 1So yeah you know, I, I think that you know, I think that's that's one secret that I think a lot of folks don't tell people when they make it to a certain point, which is, yeah, like the more money you make, the more problems you have and the more bills and debt that you read more money, more problems you got to be careful, no money, more problems.
Speaker 2You know the other. The other thing that we didn't necessarily mention is co-signing, right, so a lot of us may have co-signed loans, but again, right, society, society believes oh you, big shot, doctor now you doctor now. Yo, doctor, now right. And so people come to you and they're like, hey, can you, can you co-sign this particular loan for me?
Speaker 1You know, I'm good for it.
Speaker 2Exactly, people will ask you now that you're a physician and you making all this big time money, right, come and co-sign for me. And you know I have a nephew, I love him dearly. He came to me, remember. He came to me and was like oh Tati, can you co-sign this loan for me for this car? I literally laughed out loud. I was like I was like I don't co-sign. I was like I'm gonna tell you right now it's really nothing against you, but I don't cosign.
Speaker 1Why don't you cosign?
Speaker 2My sister cosigned for me. I appreciated it, but she also went through the pain, right. She also went through the pain of watching me dodge, you know, student loans, right. And so I remembered that and I was like, yeah, I don't want somebody to do that to me. So I said, no, I don't co-sign. What I can do is if I have the money, I can give it to you. You know, I can give you money but I am not going to co-sign.
Why Debt Controls Your Career Choices
Speaker 2So you know, we ended up giving him a little something to put towards a down payment for his car loan or whatever it was. Yeah, we did, we gave him something you don't remember, but we did. We gave him something. But no, no, we gave him. I would not give him something without telling you it doesn't make any sense. But no, I don't co-sign, because when you co-sign somebody, essentially what you're doing is you're adding more debt to yourself. You think it's not your debt, it is your debt, like that is totally your debt, right Cause they would not be able to get it were it not for your signature on that paper. So technically it is your debt and it does add to your debt, to income ratio. So you have to think about that that if you are co-signing for people, you need to be really, really careful, because it can affect your credit score. It can affect your ability to pay your own bills, especially if this person is defaulting on their loans. So you need to be really, really careful.
Speaker 1So I think it's really important that we kind of put a low key flex out there. That we learned recently and I talked with our new CPA about this he's gonna be featured on a future episode which is, if you get asked to co-sign or if you get asked constantly by certain people to give money or to support family in some form or fashion, particularly if you have a side hustle or if you have a side business, if you are working locums and you're doing independent contracting, whatever you may be doing, hire that person Right.
Speaker 1Whatever you may be doing, hire that person right and then loan them or excuse me, give them money as a salary or give them money like that so that it becomes tax deductible right that's one way, particularly if you have someone who who is constantly asking you for money, right, right, so then you kind of put them on salary and then it becomes beneficial for you yeah and then it becomes beneficial for them yeah and definitely.
Speaker 2Um, always have some sort of a contract. Always have some sort of a contract as to if you're loaning somebody some money and you expect for that money to come back, always come back. Always do a contract for that, because that could be a very contentious thing. When someone says, no, you gave me that money, it's like no, I loaned you that money.
Speaker 1Here's another. I watch a lot of Judge.
Speaker 2Judy y'all, here's another one too.
Speaker 1Here's another one too, for example, like your nephew who wanted to get a car. Another thing too is you can get a car put on toro or put it on lyft. So toro is like basically airbnb for your car. Right, you use an app and you basically rent out your car to anybody. I use toro whenever we go to a different town and I don't want to just rent from avis or hertz. I go to toro and I can rent like a, a um, like a tesla, or we could rent like a really nice car, and if you look at all of the fees that you're not paying because you're renting from an airport, if you compare those feet the fees that you're not paying by using Toro and you get a really nice car it comes out to a little bit cheaper than renting from Avis or Hertz. So you can put your car on that and now anytime you use that car for Toro, which is to rent it out, it becomes tax deductible right.
Speaker 2In other words, you're using your debt, you know, as a source of income, right, like that's actually in and that's what when they pay you, but when the person is supposed to pay.
Speaker 1Right right, right to be paying you so they're paying you back or they're paying back. You know the the business that purchased the car, right? So you're whatever business purchased the car and you're letting him, him or her use it, but they're still paying you. And if they can't pay you, then worst case scenario, you put it on toro and you make some money from that right.
Speaker 2In other words, yeah, you use your. You you're using your debt as a source of income. Take the car back, yep Right, and that's the thing. Right, that's really what debt is supposed to do for you. It's supposed to be some sort of an investment, right? That's why, a lot of times, we say, oh well, if you buy a house, it's an investment. You know, your debt is really supposed to be an investment for you, supposed to have some sort of return. But we don't really look at it like that, right? I think most people don't look at debt as something that is supposed to be, you know, an invested venture. I think people look at debt as well, you know it's a substitute for cash and really shouldn't be that. So I think we should talk about, you know, ignoring those student loan debt, that student loan debt and pretty much the you know the effects that it can have, you know.
Speaker 1On on doctors in particular.
Speaker 2Say again you talk about going on autopilot, yeah, going on autopilot, yeah going on autopilot, ignoring it, ignoring the things that potentially could help people decrease their debt even faster. Those are the things that I think definitely keep people burnt out. Right, you keep thinking about this debt and you keep like, just, I think Dr lucy, dr lucy had mentioned, you know how she basically had a full-blown like panic attack just thinking about the debt, right, like that was episode 285, right, and she just had a whole full-blown panic attack. And I think that she's not alone. I don't know that people have full-blown panic attacks, but do think that people you know sit with the debt and it sees, you know, and a lot of people don't know what to do.
Speaker 1They're not sure what to do, Right, and as a result, they decide well, I'm just going to follow the plan that the company put out for me. I'll follow the coupon book or follow whatever happens in my email.
Speaker 2Yeah, and or I'll dodge it.
Speaker 1A lot of people don't know that there's so many different things that you can do to really kind of decrease one, the total amount that you're going to pay, to maybe decrease the interest rate on it or three decrease just automatic payments, which is good.
Speaker 1I think there's so much more that you can do, you know and I'm going to put in the link, but there's a a really good article from studentloanherocom. If you go to studentloanherocom and you go to the links, that's in the show notes there's a student loan repayment guide for doctors. There's also one for other professionals also and it talks about all of the different things that you can do, One being refinancing your loans right. So if your loan interest rate is at a certain rate, like you go to a company and they will buy your loan and then offer you a lower interest rate, hopefully right. There's also just understanding that maybe you need to get into the public service loan forgiveness plan right when you know, for a certain amount of years and a certain amount of payments that you're going to make.
Speaker 1After that you know the government is going to relieve or it's going to forgive those payments. Those are something to consider A lot of people right now who are struggling. Right now, interest rates are going high may not even be in the six-figure range and you're wondering how am I going to make my student loan payments right?
Speaker 1there's income-based repayment right, so there's like all of these different things that are out there that we can consider. We talked about it, you know, with, uh, with travis hornsby in 290 that was episode, episode 2. 299 that everybody needs to go take a listen to that. There's just multiple ways that you could skin a cat to make sure that your loans are way more efficient and that you're, for the most part, your student loan debt is way more efficient. You can do the same thing with your, with your, with your debt. There's like high, you know your high interest rate debt.
Speaker 1You can a lot of people refinance those also yeah, absolutely.
Speaker 2I mean. Another thing that you could potentially do is when you are looking for a job right when you're looking for a job, one of the things that you can negotiate is student loan repayment. You actually did that, um, you know, and negotiated some student loan repayment, you know, for your job. You know where we should have went harder yeah, you should have gone harder.
Speaker 1I had ten thousand dollars every year would go towards my student loans yeah, that was ten thousand dollars, like before tax right.
Speaker 2so, but I mean, I think that that's really important. You know, we're partnering with st john associates, um, and they're a staffing, they're a staffing company. They do a staffing company. They do mostly permanent. Actually, they don't do any locums, they do permanent staffing, right, and so this is one of the things that you know. If you were to go with a staffing agency, that, yeah, you're going to want to ask, you know, hey, or you're going to want to present, as I said before, right in a previous episode, you're going to want to present that as a potential condition of you working at that particular job in St John.
Smart Strategies for Debt Management
Speaker 1Let's just be real. Let's be real Like if you are working with St John or if you're working with any staffing company like you need to be telling people. Listen. I got student loans. What can you do to help?
Speaker 2me with that. From a company standpoint, that's what I would say absolutely it's like.
Speaker 1It's like, you know. We have Cedric. You know Dr Cedric who runs policy prescriptions. Remember he was like like the whole notion of going to medical school or going to college nowadays, you know, depending on where you come from like you really shouldn't have to pay that much, right like you right.
Speaker 1You may not necessarily need to go to like the big time schools, but there are plenty of schools that want you there. And it's the same thing with these hospitals. Like, it's like yo for real, for real. Like, if you've got a lot of student loan debt, you need to be negotiating that in your contract. Asa, I would do that more than the salary, I don't care.
Speaker 2Oh yeah, absolutely. And when you have a company, you know the new kids on the block, right? St John Associates has been doing this for well over 30 years. I mean their experience, right. Like they, they can definitely help walk you through what you need to be presenting to. You know, whatever new hospital that you're going to be going to think about. The income also, right, because we talked about, yeah, you're going to be getting a six-figure income, but every six-figure income is not, you know, is not made equal, right? So what does that mean for you? You know. So if they're touting, oh well, you know you're going to get $350K. You know, working as whatever specialty you're in, because they do all specialties. Their forte is ortho, but they do work with all specialties.
Speaker 1But is that know how to replace potassium here we go again, here we go again.
Speaker 2So if you do know how to replace potassium, okay, which means you would not be an ortho doc, you could still actually work with St John associates, because they could place you too, because, since they do all specialties, okay, is that better for you knee?
Speaker 1Thank you.
Speaker 2But anyway, you know, at least know how to use their electrolyte replacement guide.
Speaker 2Okay, it's fine, it's okay, it's okay. They're not going to learn. Just get, just get over it. They're not going to learn. I'm gonna just answer Orthos are not going to learn. Babe, I'm sorry, just get over it. But think about the salary that you're making. We kind of talked about this in the previous, the previous money trap with the income you have to negotiate right. Part of negotiating your income is actually thinking about how much debt you have you know what I mean.
Speaker 1Yeah, I think, yeah, I think that that's what I think. That's one thing that I think we can do a better job of is letting people know that money, or money can look, how you get paid, looks different than just a salary, right.
Speaker 2Right.
Speaker 1Like it's not just a straight salary of them giving you money Right Like, right, like it could be a benefit, right like you know pay time off. It could be CME. Some hospitals give you like right like $20,000 in CME I'm using that as an exaggeration but like, yeah, your salary may be like median with everybody else or maybe a little bit lower depending on where you're at, but if you have really great benefits, then like it may outweigh having a nice salary.
Speaker 1So, if there's a way that you can say hey, you know what, I don't want to sign on bonus Right.
Speaker 2Right. Don't want to sign on Right.
Speaker 1I just want you to take care of my, my student loans, right.
Speaker 2Cause the reason.
Speaker 1I don't like sign on bonuses is because, more often than not, sign on bonuses are sign on loans.
Speaker 2Right, that's usually what it is, yeah.
Speaker 1Golden handc handcuffs, and you got to be there for three or five years. So I'm like, right, just give me, you know, 10k or 15k or 20k or even more than that every year towards my student loan for every year that I'm here. That's it, you know.
Speaker 2So I agree with you there yeah, and then, and then I obviously look see, you know how that staffing company is getting paid, right, because that's another thing, right? So St John Associates, they only get paid if there's a match. There's no match, you don't get paid. You know they don't get paid, right? So if you don't get paid, they don't get paid, which is really good. If you don't get paid, they don't get paid, which is really good. So you know, check them out. They're at stjohnjobscom. Slash docs okay.
Speaker 1We'll put that in the show notes.
Speaker 2But check them out. They do a great job. They don't put your CV all over the place. We kind of beat that horse to death in a couple of episodes before this one. But yeah, I think you know people don't realize the amount of damage that not paying debt can do, right, Whether it's student loan, debt.
Speaker 1So I was actually going to ask you about that. Let's pivot real quick. Yeah, I get what you're saying there, and I think we kind of talked about that. Let's pivot to talk about.
Speaker 1let's talk about this in a different way, so that we can kind of just do you think if you were to do this again? You're 10 years out now. Right, we finished in 2017. We're now like what? Almost five years, uh, paying off all of our student loan debt, right, probably like four years, three years now from paying everything off, right? So if you could do it again, would you pay off your debt off early, or would you take a more modest approach to paying off your debt? If no one?
Speaker 2would you still knew?
Speaker 1back then, knowing what you still knew back then knowing what I still.
Speaker 2But I didn't know anything, and that was the problem right, like you know now, know what you don't know okay that that makes more sense right, knowing what I know now, knowing what I know now, I probably for you, whatever anyway. But I mean you're asking me if I knew, then I'm like if I knew what I knew, then then I would do the same thing regardless anyway, so the question so, knowing what I know now, I probably still I probably still would have paid it off quickly. Why Right?
Speaker 2Because when I figured, when I figured out what, what I, when I figured out what the impact was for me right, when I, when I, I think what happens is when people like me and like you realize what the impact is, then we want that monkey off our backs, right? So the impact of not paying your debt is having this anxiety, right, this anxiety of having this debt that you owe somebody and you just don't want to have it. Not everybody has that feeling, right? Some people are just fine with having debt. You and I are just not those people. I don't like knowing that I owe people. The other thing is, you know, getting deeper in debt and knowing that, okay, if I either defer or forbear, or even if I'm paying it off right, even if I am paying it off, I'm still paying more than if I would have just paid it off all at once.
Speaker 1Well, the whole thought process Right. The opposite is well. Knowing what you know now, for example, would you have been as aggressive on the federal part, like I definitely understand the private part? I think I would have been the private part for everybody who is listening. I don't know why we all say for everyone. Of course people are listening for folks that are listening, put it on there. Or the opposite way for the folks that are listening our private loans were like anywhere between like nine to like 13% yeah, and it came out to a total of 180 000.
Speaker 1Yeah about then we had private and then we had federal loans all together that was obviously like 530 000, that was like 2.2 percent to like 2.3 percent you're pointing in the same direction right, so that's where I want them to put the oh, that's where you wanted to put it yeah, put the numbers. Oh, that's where you want them to put it. Yeah, put the numbers there. Hook it up, alfred.
Speaker 2Can I fit? Do I give you enough space? But anyway Do you need some more work.
Speaker 1So the question is I get that you would take the private loans off first because they were at a very high interest rate. They were higher than what most people say, like the big part in the road is like five to six percent. If you have interest rate that is more than five to six percent, then you should pay it off. If you have interest that's less than that, then maybe you should invest, right, um, or certainly you shouldn't pay it off, you should invest, as. So the question is would you still?
Speaker 2I think I still would have, because that anxiety for me of owing somebody was just that much, you know. And then, and then the other thing is, you know, like your credit score, right, your credit score continues to suffer, right, you can't build up your credit score the way that you would necessarily want to, at least not as fast as you would want to, because your debt to income ratio is just that much, is just that much and for me, like you know, I'm not a person who, I'm not a person who cares so much about my credit score, but for, for those people who do, I think that that's something you know to think about, right, like, how quickly can you, you, you know, re recoup that credit score?
Speaker 1I think, for me, the thing that I thought about the most was I didn't feel free like I didn't feel free to like move from job to job to job to job, because I felt like well, like I didn't have the time to lose a job because or leave and go to another job and who really wants to do that?
Speaker 1but like I just kind of felt, like I was like wait, like the reason I became a doctor is because I wanted to kind of just do my own thing and like be my own boss. And you combine that with like like medicine is really not like that at all right, like it's right it's really not. Yeah, you're employed, or you work in this type of employed model, and then you throw, throw on top of that. It's like well, the number one thing is if I lose my job, how am I gonna pay my loans?
Speaker 2As opposed to thinking about Right, but that's part of the anxiety. Right Of owing somebody Right, but I'm just saying my story.
Speaker 1That's what I was thinking of. And I think for me it was really more like yeah, I don't know if, or, excuse me, I don't want to know if I want to stay at this place more than three years.
Speaker 1I don't know if I want to live in this part of the world or this part of the country for this? Like, what if I want to do something different? Right, and I think that when I was, you know, when we found out about PSLF, obviously we didn't qualify for it, right, because it was after when we graduated, right, you know, I would talk to some people. I'm like yo, you want to be at this place for 10 years.
Speaker 2Yeah.
Speaker 1Right, I get it and it's smart, but I'm like damn, I don't know if I want to be in one place. But you don't have to be in one place.
Speaker 2Yeah, you don't actually have to be in one place for 10 years, but you got to guarantee that you're going to be at a nonprofit, which most hospitals are nonprofit Most hospitals are. But I mean Right, like if you decide that you want to join a practice huh 501C practice, or something.
Speaker 2Well, I mean, I don't know how many you know nonprofit practices, you know private practices there are out there, but you know you, you would have to forego maybe something that you feel is an opportunity just to do that. But for some people that's fine, right, fine right. For some people, you know that that's really fine.
Speaker 1Um the other thing was well, let me just finish. I just think that I I think a lot of professionals, low-key don't value how much debt, whatever it may be, makes you make certain decisions. That oh yeah kind of subliminal ie what specialty you're going to choose, ie what part of the country you're going to live, ie what kind of BS you're going to put up with at work and it, low-key, makes those decisions for you. You have no clue that you're making decisions because of how much debt you got.
Speaker 2Exactly. And then, not to mention the fact that a lot of professionals don't even appropriately manage their money. They're not budgeting right, so you end up with late payments. You end up with, you know, getting deeper into debt because of those late payments. You know, again, your credit score suffers Like you have all of this big snowball effect of things that is happening, and then that you know that condition that you're living in, you know, then makes it harder for you to even say no, like I don't want to work here anymore or no, I don't want to do this extra thing that the hospital's asked me to do, you know.
Speaker 2And I don't want to put my job in jeopardy though, so I guess I'm just going to have to do it, you know. And so for me, I think, knowing what I know now, yeah, I think I would still have paid it off very quickly, because I just don't like the anxiety that comes with owing somebody, because that anxiety of owing someone comes with all these other little branches of consequences, like you just mentioned, and I don't want to have to deal with that um, if I could do it again, I I think I wouldn't.
Speaker 1I would do it the same way, but I wouldn't do it with as much of a scarcity mindset as I did. Right, because I think what's that mean? That means that basically this money is not coming Like. It's going to be hard to get this money Right.
Speaker 2Okay.
Speaker 1Like it's very like you become very not selfish with the money, but you feel like getting that money is hard to get. So, as a result, you become very neurotic about the money.
Speaker 2Right, okay, and.
Speaker 1I think after a while I was getting very neurotic about the money, okay. And I think after a while I was getting very neurotic, okay, where's this next set of money going to come? We have to continue making these payments towards the student loans.
Speaker 1So as a result like you just become very, more type A and I was becoming very type A about making sure that you know I did extra work, like we talk about. You know doing locums During this time. You know, those three years, what was I doing? I was an employed doc and then the other two weeks I would take locums jobs and I would work that and that's what we would use to pay your IVF right or pay for.
Speaker 1IVF treatments right and like nothing was going to happen unless we. We worked those shifts. It was just very rigid and I just say, from a standpoint of when you finish, that it's hard to turn that off. Right, it's really hard to turn that off and sometimes that scarcity mindset well, I mean for you. It was but that. Who am I speaking for?
Speaker 1it is my is your, is your voice speaking or my voice, speaking right like well, I'm just saying for you, it was right so I just I think that that's one of my things that I look back, I'm like it's good to pay off that debt, but I think I could have done a little bit differently with less heartache and stuff. Um, maybe not three, maybe four years possibly, who knows?
Speaker 2I don't know.
Speaker 1But either way, I I definitely think that, um, you know, we kind of beat this horse down, that we were talking about how, like, the big trap is just kind of making sure that you know, a significant portion of what you bring in is not going towards, you know. Consumer debt right car payments, house like trying to afford everything and keep up with the joneses you got to start keeping that money for yourself and just really understanding.
Speaker 1I think the big thing for me is just really understanding what I desire, what I want versus what I need that was a game changer for me and, um, I think know when people start to really understand. Okay, hold on a second. If I can't pay cash for it, then if I can't, I can't afford it.
Speaker 1I can't afford it. Or if I can't pay cash, if I'm going to use my credit card to do it and I have a means of paying this back by the end of the week or to make sure that I'm not going over and and getting interest charges on it, then I can't afford it, right, because I right look, we got to be realistic.
Speaker 2Some people do that right they buy it with their credit card and then they pay it off before then they pay it off, yeah, absolutely, just to get the perks of the credit card and that's fine, you know. If you're organized enough to do that, um, then great. If you, like me, you probably don't want to do that because you will be paying interest, you know. And then the other thing that we didn't talk about speaking of, like missing payments and things like that don't forget like, if you miss enough payments and go into a into default right, whether it's federal or depending, or if you know, if you have a private loan, it may, you know, the terms of default may differ, um, but if you have a private loan, the terms of default may differ.
Closing Thoughts and Contact Information
Speaker 2But if you go into default, they will come after your money. The IRS has a way of getting paid. You will get garnished. At the extreme, you will get garnished and then now you really won't have any control whatsoever over how much money is going to You're paying child support to sally may, right, exactly, exactly, they got us in your rage is one thing that I think exactly.
Speaker 1And you still can't see your kids I think one thing that a lot of people don't think about is they always talk about well, if I keep my student loans as a tax, you know break, well, that's actually a misconception. All these things that I'm taking guys, I'm getting these from different uh, uh, you know articles that, uh, that I found I'll put it in a show notes, but basically it says the tax deduction for your student loans is limited to $25,000 of student loan interest you pay.
Speaker 1It also begins to phase out when your income reaches $70,000, right so you're getting close to that If you're a resident you're right, your chief year or? Maybe if you're in your like, really like advanced level of fellowship and is eliminated and adjusted gross income and AGI of $85,000 or 140,000 and $170,000 respectively, if you file a joint return. So I just want people to know that listen, that that whole notion of, well, I'm going to keep the student loans as a tax break, hey, that's not, really it's not yeah, that might not necessarily apply.
Speaker 2Right, we can't say that it absolutely won't, but it might not necessarily apply. You know, and this is where you know, this is where I think, if you don't have enough time to look up all the things that you could potentially do in order to decrease your debt burden, whether that's student loan, debt or any other debt, that's where it might be worth it for you to talk to. You know, a professional right.
Speaker 1Someone who can help you out there.
Speaker 2Exactly Someone who can help you to make a plan for this debt, or you, you know, figure out how you can construct this debt such that it's not as much of a burden as it currently might be to you, and I think that that's really important. I think, as doctors, residents and full attendings like I don't necessarily think that we have the time to sit down and just, you know, comb through everything and figure out, you know, how we're going to decrease our debt burden, so you know the money that you might pay a professional to do it. You know it might be a little bit annoying, but in the long run, it might actually save you a lot of time, a lot of energy and a lot of pain so, and they know about things that you may not know about, so right we had travis horsby on.
Speaker 1He was episode 2. He's one of those professionals out there. Make sure you mention docs outside the box. You get a really nice bonus. Um, so you know, we making things happen here with you know, teaming up and and partnering up with, uh, folks as well as companies that we think are going to benefit you as a professional, as a student, you know, as a resident.
Speaker 1So make sure you guys check out these and support these people who are in the show notes, as well as on our affiliates and so forth. So listen, renee, let's wrap this up.
Speaker 2Let's wrap it up. Let's wrap it up yo, because we got to go.
Speaker 1So what's the parting words you want to say for folks on this episode?
Speaker 2I think the parting words for me is don't ignore your student loan debt, don't ignore any debt that you have. You know, try to keep, try to be very intentional about either whatever debt you currently have or any debt that presents itself that you could potentially get into right. And so don't just think about I want it, I want it. I want it because debt is not a substitute for cash. Right, credit is not cash. Credit comes with interest and you know, if you start to treat credit like cash other than just, you know, paying off your credit card, you know, within the 30 day, whatever window, if you start to treat credit like cash, then you're going to be, you're going to be stuck for a very long time. So just be mindful.
Speaker 1I love it, it's great. Why don't we leave it at that? I think I'll keep mine really short and simple and just be like hey, guys, you know you want to make sure that all of the investment, all of the sacrifice that you put in, you know, years ago, maybe even decades ago, is really going to show its fruits. You don't want to mortgage that literally because you have so much debt. You have all of these different things that you're paying for. You're not able to really invest it in yourself, which is health and wealth. You have all of these different things that you're paying for and you're not able to really invest it in yourself, which is health and wealth, and I think that that's that's where it's supposed to be at.
Speaker 1Your physical health as well as, you know, your mental health. That's the most important thing. So listen, guys, we are going to end this episode. Remember, if you want to get in contact with us, if you want to let us know what you think about the show, if you go to the show notes, you will see that there is a link for a survey right within crowd. Make sure you check that out. It's also an opportunity for you to make some money with your medical expertise, so check out in crowd.
Speaker 1We have a great partnership with them. And then if you want to follow us on Instagram, it's dr knee Darko. That's where you can find out all of some of our clips, some of the things on our episode previews on up as upcoming shows that are coming up. If you want to find out and see what's on our website, check us out at drkneedarcocom. Or if you want to email us, email us at team at drkneedarcocom. Let us know what's up, let us know what's good and we'll be sure to get in contact with you. Dr renee, why? Why don't you tell them?
Speaker 2I got one more thing. I got one more thing to say Um, we have a casting call, um for residents and fellows, preferably those who are maybe one year out from graduating or in their year of graduation, um, so look for that um at Dr Nidarko, or actually look for that at Dr Nidark. Need darko on instagram, um, and also, if you haven't signed up for our newsletter, you can do that on the website, um, and that will also um get you to uh the casting call.
Speaker 1I'll send out an email about that, but I'm so proud. Look at that everyone. You see how we growing here at docs outside the box. Maybe it was just me struggling.
Speaker 2We're using a little scrub.
Speaker 1Trying to make things happen. Now we got Dr Renee, we got Carla, we got Alfred, we got Christian. We got all these people up in here. I'm not giving their last names because I want nobody trying to steal them from me. We got all these people here, man, considering you say.
Speaker 2Christian Perry at the end of this, at the end of every episode. I think they already know who Christian is.
Speaker 1But listen, guys, we got to get going, we got to pay the bills. Guys, we will catch you all on the next episode of Docs Outside the Box. Remember this is a fusion of money, medicine and pop culture. We appreciate y'all.
Speaker 2Catch you on the next one.
Speaker 1Peace.
