Category Archives: Debt Repayment

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.

Continue reading

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.

Continue reading

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.

Continue reading

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.  

Continue reading