Doctor in Debt: Annual Letter 2016

Welcome to the first Annual Letter for Doctor in Debt.  Now that 2016 has wrapped up, and we are just hours away from a new year, I cannot help but get excited to see what 2017 will bring.   Before we kick off next year,  let’s see what this year brought us.

What I Accomplished in 2016

2016 was a year of action for me.   I tend to be a perfectionist by nature, and this trait worked well for me in school and at my day job as a physician,  but waiting for perfection as a writer is counter productive.  I had started then stopped the process of blogging at least a dozen times, but 2016 was the year that I sat down and made it happen.

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How a Personal Line of Credit Saved Me From a Cash Crunch.

What is a Personal Line of Credit

A personal line of credit is an unsecured revolving account with a variable interest rate allowing you to borrow money as you need it.  Essentially, you can use it as a credit card to cover significant expenses at places that don’t take credit.

The Major Benefits of a Personal Line Of Credit:

First,  I would like to be clear that you never want to borrow money unless absolutely necessary.   I use a personal line of credit to smooth out major expenses and want to share what I learned looking for and setting up my account.

Warning:  If your problem is an imbalanced budget, a personal line of credit is not the answer.  Borrowing for routine living expenses is a sure-fire way to end up in the poor house.

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Weekly Roundup Number 1: November 6th

START HERE:

What else was Interesting for your casual reading?

+ The Secret Algorithm Behind Learning:    I am always looking for ways to learn information faster.  This is an excellent Quick Read on a few items I was doing and some that I was not.
+ Their Up is My Down: This great post resonated throughout the FIRE community.  It touched the nerve of being able to find your tribe of like-minded individuals online even if your real world community surrounding you values different things.  It’s probably something that all
bloggers could relate to at some point or another.

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Financial Narrative

Supercharge Your Debt Reduction by Changing Your Financial Narrative

Supercharge Your Debt Reduction by Changing Your Financial Narrative

Which kind of statements do you use more frequently?   “I live a charmed life. Things always work out for me.” OR  “I can never catch a break. Things are never easy for me.

The stories we tell ourselves about money interplay with our sense of personal and social identity and can have a profound effect on our financial lives.    As you transition from being a “poor resident physician”  to “rich doctor”  the financial narrative you tell yourself can change.   This change in narrative sets the stage for financial mistakes that will follow you for years if not identified and corrected.  You can supercharge your debt reduction by changing your financial narrative around a well-planned goal.

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Medical School Loans

5 Steps to Repay $1,000,000 in Medical School Loans and Mortgage Debt in 10 Years or Less

The correct response to this sort of debt is, “AAAAAUUUUUUGGGHHHH!!!! THERE IS A CLOUD OF KILLER BEES COVERING EVERY SQUARE INCH OF MY BODY AND STINGING ME CONSTANTLY!!!! I NEED TO STOP IT BEFORE I AM KILLED!!!”

–Mr. Money Mustache

For some reason, I didn’t mind accumulating a few hundred thousands of dollars of student loan and mortgage debt within ten years of medical school.  Being a little naive,  I figured I could just turn on the savings and retire that debt as soon as I wanted.   I had no reason to think otherwise.   All my life I had been told that debt was safe, if it was the right kind of debt.  As long as I wasn’t carrying around 5 figure credit card balances, I was to be commended for doing an excellent job managing my debt. I was never a free spender and was very diligent with my budget working my way through college.  When I entered medical school, I was told, borrow as much as you can, focus on your studies.   You won’t have any trouble paying it back.

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Debt

How a Doctor Gets $1,000,000 Dollars in Debt

The unfortunate honor of hitting one million dollars in debt is unique.  It is normally difficult for an individual to amass such a burden of debt to repay in their lifetime.  Banks simply will not loan you that much money.   The increasing costs of higher education are pushing many young professionals to these debt levels and beyond as they finish their education.    With newly minted diplomas in hand costing hundreds of thousands of dollars,  they proceed to purchase their first homes costing hundreds of thousands more.    This scenario results in a young, highly-educated professional in their early 30’s thinking “I did everything they told me to, why are things so bad!”     Financially they are now worse off than if they were starting at zero.   The situation is magnified when they marry another young professional who has made the same choices.  

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Monthly Debt Totals for June 2016

Quarterly Update June 2016

“Only a fool learns from his own mistakes. The wise man learns from the mistakes of others.”

-Otto von Bismark

Monthly Financial Reckoning:

Welcome to my monthly financial reckoning.   Here is a short report on my monthly debt totals.   It may be low yield information for most readers but there is something about a slow motion train wreck that makes people curious.  The main purpose of this post is so that you may learn from my mistakes.    Perhaps years from now when I have cleaned up my act I will stop posting updates because my debt will be gone! 

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Welcome to Doctor in Debt

Welcome to the site.  This is my second go at personal finance blogging.   I had a start back in 2004 as an intern but quickly got distracted with medicine,  iOS development and now back to finances.     Why am I as a doctor, dolling out my experience on finances, early retirement, app development and the like?

I have looped back to finances because eventually everyone figures out that no-one cares or knows more about your financial situation than yourself.    There are a multitude of services out there to help you with all your financial needs, for a price.

If you need debt reduction,  they have it.

If you need retirement planning,  they have it.

If you need insurance, they have it.

These things ARE needed by most Americans,  but a slightly motivated individual of average intelligence can often do a excellent job for themselves at a much better price.

I will show you how I have approached these problems from an upper middle class life style.   We are the classic “HENRY” family;   “High Earners Not Rich Yet”    While I face many of the same financial problems as most of the population, my upper middle class income offers me opportunities and dilemmas that are not often touched on by other personal finance blogs.

I am by no means an “expert” on any of this.  In fact, I would be suspicious of anyone who does pretend to be an expert.  Each individuals situation is unique and the best person to decide what is best for you is YOU!   So do your due diligence, read some books and blogs.  Talk to a friend, even an advisor.  Then make your decision and be confident you made the best decision you could make with the information you had at hand.

This should all become part of your financial system that you review on a regular basis.   Do this, then get on with the rest of your life!!    After all, your finances are there to allow you to do the things you want to do!

Enjoy the ride.