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White Coat Investor Podcast
MtoM #243: Locums Psychiatrist Crushes Student Loans in 4 Years and Finance 101: How Dental Insurance Works
00:29:20
Today we are talking with a full time locums doc who has paid off his student loans. He is a child and adolescent psychiatrist and tackled about $400,000 in only 4 years. He refinanced a couple of times and he said it is debatable if that was the...
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- [00:00]
A
This is the White Coat Investor Podcast Milestones to Millionaire Celebrating stories of success along the journey to financial freedom. This is Milestones to millionaire podcast number 243. Locum psychiatrist crushes his student loans in four years step away from the volatility of the markets and put your money back to work with MLG Capital's series of private real estate investment funds. With over 35 years in the real estate industry, MLG Capital has the experience to provide investors with substantial returns and the track record to back it up, more than doubling every dollar invested through multiple investment cycles. Their series of private investment Funds target an 11 to 15% rate of return net to investors through tax efficient quarterly distributions. The fund structure prioritizes generous returns to investors first before MLG can share in any profits. Demonstrating their culture of absolute integrity. Experience the peace of mind that comes with investing in diversified private real estate with MLG Capital. Learn more about Investing by visiting www.mlgcapital.com Whitecoatinvestor all right, gotta love MLG. MLG has been with us for a long time. I've been with MLG for a long time. I invested in their fund 4. I actually recently invested in their fund 7. So I'm gonna be with MLG for quite a while. Grateful for them and their sponsorship of the podcast. They've been on our real estate opportunities list. Maybe I haven't talked about the real estate opportunities list in a while, but if you go to whitecoatinvestor.com reopportunities you can sign up for that and you'll get emails. Some of these come from us, a white Coat investor, educational kind of stuff. Some of them come from the sponsors themselves and we always make them lean toward the educational side as well. But they tell you about the opportunities and that's really all we can do is introduce you to them. Right? We're not making investment recommendations or anything. We're not a financial advisor license to do that, but it gives you the opportunity to check it out and see if that's something you want to do with some portion of your portfolio. Again, that's whitecoatinvestor.com reopportunities all right, we have an awesome interview today is from a Locums doc and you would think this was a Locums advertisement to interview him here on this. It's not. You know, we do have some sponsors that do Locums but you know, they didn't sponsor this podcast and he doesn't mention any of them. He just talks about this awesome life he's having doing locums and including the financial benefits of it. So we're going to spend some time talking with him. Stick around afterward. We're going to talk for a few minutes about dental insurance. Our guest today on the Milestones to Millionaire podcast is Steve. Steve, welcome to the podcast. Thank you.
- [02:51]
B
Thanks for having me.
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A
Now you've done something awesome we're going to highlight momentarily. But first, let's get to know you a little bit more. Tell us what part of the country you're in, what you do for a living, how far you are out of training.
- [03:03]
B
Okay. I am from Arizona, but I'm a full time locum child and adolescent psychiatrist. I also do general adult as well, but I travel basically all over the country. So the amount of time I'm actually in Arizona is variable from year to year. I'm out of training. I graduated fellowship in 2020, but I didn't start actually working till 2021. January I took about six months. This is during the pandemic. I took about six months and was basically trying to figure out my financials, how I wanted to work and locum. I was just getting things set up and just kind of sorting out what I wanted to do. I just did per diem and moonlighting stuff for a bit to kind of float for a few months. And then I actually started doing locum full time in January in Virginia.
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A
Awesome. Well, I bet you have arranged to spend your time in Arizona between February and April rather than between June and August, Am I right?
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B
You'd think that would be the case. Honestly, it just, it really varies. I've been up in Boston area in the wintertime. I've been in Hawaii in the summer. I've been in California for nine months and so kind of carried the gamut. So I've just been kind of all over. I usually try to pick places where I have friends already or family, so it makes it easy to kind of visit. You know, a lot of my friends and family are married with children and so they can't really get out. And it's hard to hang out with your friends once they've all kind of scattered. But it's easy when you're doing locum. There's no pressure to see each other for the one weekend you're in town, you're there for three months. So, you know, I kind of. We see each other when we want and yeah, it's been good.
- [05:07]
A
Yeah, I want to spend some more time talking about that. But first we gotta celebrate a milestone with you.
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B
Absolutely.
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A
Tell Us what you did.
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B
I paid off my student loans in four years.
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A
Wow. How much did you pay off?
- [05:20]
B
It was about 400,000.
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A
$400,000 in four years?
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B
Yeah.
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A
You should be so proud of yourself. That's awesome.
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B
Yeah, it was. You know, there's a little bit of a story on it. I mean, I kind of feel like I lucked into a lot of my decisions. Cause I made a lot of them when I didn't know everything. I know somehow, in retrospect, they ended up being decent, good decisions. I was supposed to pay it off in five, and I just ended up paying it off in four because I had extra money this year. And I said, let's just finish it off.
- [05:55]
A
Yeah, I like that extra money stuff.
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B
Yeah, that's always nice.
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A
Amazingly, though, extra money seems to come from either working harder or spending less. Am I right?
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B
Yeah. You know, I'm the kind of person that likes to try to do everything. Like, I wanted to save the most, and I wanted to get out of debt fast. And I knew a lot of people, you know, they don't have the luxury of being able to do both. They have to sort of choose one or the other, which, you know, it's fine. But I kind of just wanted to save a lot because I am, you know, on the older side. And I also wanted to get out of debt as fast as possible. And so my intern year, actually, there was this financial people called. There was some financial group that they would look over your loans and basically tell you should you refinance or not based off what you're projected to make as a. Whatever your field is. And I remember doing some consultation with them, and they said, well, you're on the border, but you could just refinance. At the time, I think my loans together were roughly between 6 and a half and 7%. And they said, you know, you can refinance and get like a fixed rate around three and a half, 4%, but you'll have to pay it off in five years. And I was like, yeah, I mean, paying off less in total just makes. In my mind, I'd rather just pay less. I don't care if it takes shorter or longer. I just want to pay less. So, you know, if it means I pay it off faster, fine. I'll just. I'll pay more upfront and be done with it. So I signed up for that as an intern, not really knowing what I was doing. It just refinanced everything. And so my rates were like 4% fixed. And of course, interest rates kept Dropping. And I had read your blog and about, you know, should you do variable versus fixed? And I think one of your posts was like, you know, you probably, you can always, if you're on variable, you're going to pay, you know, even if it goes up, you're going to have paid at that lower rate initially for some period of time. So there's some catch up before you meet the fixed, you know, percentage. And so I was kind of kicking myself, like, man, I should have really done the variable. And so then when 2020 came around, I said, you know what, I'm not going to make this mistake this time. I'm doing the Varia. So I refinanced again in 2020 and I had like, you know, it was like one and a half or something, 2% variable. And I'm like, oh, this is fantastic, I'm lower. And then obviously everything skyrocketed since then.
- [08:43]
A
Yeah, in 2022 was not a good year for you.
- [08:45]
B
Yeah. And I was like, I probably should have just been fixed in 2020, but it was fine. I, you know, I just kept paying and I didn't even look at it. I just said, just take it out every month.
- [08:56]
A
So what do you end up doing? You pay the same amount every month until it was gone. Or did you send big lumps in or what?
- [09:03]
B
Yeah, it would vary like based off the interest rate. You know, it was anywhere between I think, 5,000 or 4,500 at the lowest, and then it went all the way up to like 7,000, 7,500amonth. You know, at some point when it was super high, the interest rates. And I think by the end I was paying about 6,000 to 6,500.
- [09:25]
A
But, but there was, there was no big inheritance or big lump sum. You put on it all at once. You, you just paid five to $8,000 a month for four years.
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B
Yeah, I mean, at the, this year I think I just put in like I had saved a certain amount of money. I was kind of, because I'm 1099, I'm like always kind of in my, my income kind of oscillates a bit. I never know if I'm going to have to pay a lot more in taxes one year or not. So I keep a lot. And as a locum, you just tend to have a bigger emergency fund or just cash on hand just because, well, if I want to take three months off or something, I need cash to float and so you just kind of leave it sitting. And so I had a lot of cash and I think I just paid like 80, 90,000 and just wiped it out. I was like, why keep paying at this interest rate for the rest of the year when I could just be done and not have to pay the interest on it? And I said, let's just do it. I don't have anything I need this money for at this moment.
- [10:27]
A
Awesome. How'd that feel to write that check?
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B
It was amazing. It was great. It was like, don't have anything coming out every month. But unfortunately my car got wrecked at the same time. So I needed to buy a car, but I had enough cash to do that, and I bought a nice car as well. I just brought in the bank check and gave it to the dealership. And that was it, too. I would have had more money than I have right now if I hadn't had the car. I had to buy the car. But I still ended up saving roughly 750,000 in savings between my retirement accounts and just cash. So I was able to pay that off and save that amount. The other kind of lucky thing, I had a friend in medical school, I think, in 2010, who told me about your blog. He just started reading it and he's like, oh, you should read White Coat Investor. And so I started reading it and I still was a med student. I wasn't super savvy with anything, but I do remember the thing about the Roth IRA and residency. Like, just take advantage of that because that's your lowest income, you know, the lowest time you're going to be making money and it's going to grow tax free, et cetera. And so in residency, I did max out my Roth every year. And so when I came out, I had like, you know, after growth and everything, it was about 50,000 in retirement, you know, after five years of training and whatever. And it had gone up quite a bit. And the other lucky thing is I put it in a total stock market index. And I honestly can't remember why I did because I didn't have any idea what I was doing. I just had a Fidelity account and I just said, okay, this one looks fine enough. And I just started putting everything in the total stock market. And then it was only afterwards I read more on the blog and I was like, okay, actually that was a good choice. I gotta just keep doing that.
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A
Yeah, that's the opposite experience I had when I started reading books. I'm like, oh, I got all my money in the wrong mutual funds. I'm getting lousy advice. So good for you, man. All right, well, congratulations. You did Great with the student loans. You should be very proud of yourself. You know, you've also been saving a bunch of money and investing a bunch of money at the same time. So, you know, we kind of call that approach the live like a resident approach for a few years. Coming out of training so you can do everything at once rather than having to choose between, you know, investing and paying off loans. When does your live like a resident period end? Is there? Are you going to start spending more now or you just going to like get to financial independence super early?
- [13:17]
B
I mean, I'll be honest, I think living like a resident as a locum is very easy. I mean a lot of it is just like I don't, you know, I don't own a home, but the locum pays for my accommodations everywhere I go. And it's a nice, like I'm in, you know, I'm in a nice part of the east coast right now and it's a really like they've spent a lot of money on this two bedroom, two bath apartment I'm in, you know, and I don't have any overhead as far as housing. You know, it also helps. Like I'm single, I'm not married, I don't have children. I mean that all is expense that, you know, most people I think around my age probably have and they usually have a mortgage of some kind, even if it's a small one. And as far as my hobbies, I mean, I do, I do, I'm a private pilot, so I do fly, but I don't fly enough or very expensive planes where it's like super expensive. I like to ski, I like to play golf, but I don't go to like super fancy courses, you know, And I like to travel. That's my pr. My biggest expense. And I'm not a luxury traveler, you know, I like to. My main thing is just going and seeing a place and kind of immersing myself in wherever new thing is. And so getting a fancy hotel just seems kind of lost on me since I'm asleep most of the time I'm in a hotel anyway. So. Yeah, I mean I'm not really, I'm not, I do have, I feel like my experience, my tastes are expensive. Like when I do buy stuff, I tend to get nicer things. Like if I get a computer, I try to research and get nice parts or things, electronics, whatever. But I don't do it often. Like I'm not spending, I don't, you know, my monthly spending is pretty low compared to my income.
- [15:10]
A
Yeah, doesn't sound like you're feeling very deprived and any need to really increase your spending at this point. So I'm guessing this five to $8,000 a month is probably going toward investments now, right?
- [15:21]
B
Oh, yeah, yeah. So that was the one thing. So I remember also, like, I never, I was not saving at like 20 to 25% because I was viewing that loan as a negative bond, which I've read, you know, and I heard you say before. And so I was like, you know what, when that goes away, I'm going to a now start my taxable account and really start filling that up. And I'm also going to also start giving a lot more to charity. Like, I wasn't giving as much. I was always like, well, I still have student debt and I was just kind of excuse making for why I wasn't giving as much. But now I've really made a much more concerted effort. Like I started a donor advised fund and I'm picking charities and giving that way. So I'm, I feel a lot better on that front too. Like, I think I was just always like, I'm a resident, I'm a med student, I can't afford to give a lot. You know, you give a little here and there, but it wasn't like. And now that I've been working and I have my loans paid off, I'm like, yeah, I don't have an excuse to not give, you know, at least 10%.
- [16:28]
A
You're crushing it. You're four years out, you paid off your student loans, you've got a bunch of money put away for retirement. You started a donor advised fund. I mean, you're killing it. You're doing awesome.
- [16:40]
B
Yeah, I'm hoping, you know, it's like all these things, you know, at the end of the day, like money is just, it's there to help us get and do the things we want to do in life and to take care of our needs and hopefully help other people. And I, you know, I really, I don't view. Money is not like it's not a goal. Like I'm not tracking my money daily. I don't look at my Fidelity account all the time. I just keep doing the same thing. I know it'll eventually work out even if I didn't. I know even if the stock market just flatlined and I didn't make anything, I'd have enough money if I just keep saving at this rate that I'll be fine, you know, and that's all I really think about. I don't like if I wasn't able to afford something super expensive, it wouldn't be a big tragedy to me. Like, I feel like most of my joy comes from kind of things that aren't that don't have any monetary value.
- [17:38]
A
You know, let's talk a little bit more about this Locums decision. Do you anticipate having an entire career of Locums, or do you think at some point you'll settle down and stay in the same place or tell us about that decision making in your career?
- [17:54]
B
My family asks me this question all the time. You know, all the time. It's. I always. There was someone in my residency that told me about Locum. He was a senior, I was an intern and he was finishing. And I asked him what he was doing and he was one of the smartest guys in the program. And he said he's doing Locum because his girlfriend, I think, was obgyn finishing her residency. So he was going to do Locum for a year. And I asked him about it and it sounded so interesting in the sense of just the autonomy over time. And I used to tell everyone one of the reasons I chose psychiatry was because I felt like I just had a lot more autonomy, that specialty. Felt like there's enough little things you could do that you can mitigate and manage your time the way you want it. And my. I grew up with a single dad. He was a dentist. And he would, whenever we'd have a day off of school, he'd take a day off of work. And that value of time, that ability to. And I know not every parent can do that, you know, and I really valued that from him. And I thought, I want that kind of control over my time more than the money. I'd rather make less money and have more control over my time and what I want to do with it. And so that was one thing about psychiatry. And then Locum just feels like it takes it to another level. Like I can work somewhere and then just say, oh, my dad. Like my dad. My parents, both parents, they're divorced, they live on separate parts of the country. They both retired the same year. I was able to go spend a month or two helping them kind of recalibrate and help things around the house with one, and then flew across the country for a month or two, helped the other one out for a while. And then I, you know, went to the APA conference for a couple weeks. And then I, you know, I was just able to take, I think I took four months off that year and I'm. Even if I was private practice, I could never do that. And I just thought this is the only way of working where I can take that much time off and still make a lot of money. Like a lot of money. It's like a lot more money than I would if I was working just W2 or, you know, otherwise make more.
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A
Money, have lower expenses, have more experience and control. It doesn't sound like you found anything bad about locums yet.
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B
I mean, I was a locum at an academic center for nine months and I had fellows and medical students and they asked me to do a lecture on locum, you know, because some of them are graduating, they wanted to know about it. And so I had to come up with sort of pros and cons and what was good and bad. And you know, obviously there are pros about working in one system, having colleagues that you're friends with and like, you know, and having sort of a community, you know, and having familiarity with a computer system, etc. And so a lot of people find value in that. Obviously, if you're married with children and you know, it's being, you can't afford to be away for months and months, you know, it's just not good for the family life.
- [21:13]
A
Only some spouses and children travel well like that.
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B
Yeah, I have met locum that take their whole families and do long 912 month assignments and they homeschool their kids and they, you know, they're on the road and they do stuff like that. So you can work, but it's definitely difficult. I mean, I think the ideal for me would be if I get married, to find a position, a locum position, or many positions within my geographic area that I could keep doing locum and stay quasi local. But your bargaining power. I am a pretty good negotiator when it comes to my contracts. And so I feel like your bargaining power is a little less if you're not willing to say, well, I'm, you know, thanks for this offer, but I got another one 2,000 miles away that I'm just as willing to take. That's, you know, one and a half times what you're offering, you know, and they're pretty, you know, locum places that want locum are pretty desperate. And if you're someone that has a good track record and you've been doing locum for a while and all the places you've worked at, like you, they will value that. They know, hey, this is a guy who's jumped from this EMR to that emr to that emr seamlessly without skipping a beat. He hasn't had any issues with anyone. He does his work. You know, they'll say, okay, we will pay the extra amount to have this guy who we know is not going to be a problem. So it's worked out for sure. I highly recommend Locum to anybody who's like, burning out, tired of, you know, it's like, I don't have to deal with hospital politics. If I don't like a place, I say, okay, that's it, I'll go somewhere else. You know, fortunately, that's never really happened. I've liked most of the places I've gone to. Like, that's the other thing. People think locum is all like the drag work. Like, oh, that's gotta be a terrible job that nobody wants. Far from the truth. I've had some of the chillest jobs where I go in, you know, work a few hours, they pay me for the whole day, and you're done. And you're like, wow, this is amazing.
- [23:27]
A
Yeah, pretty awesome. Well, Steve, congratulations on your success crushing those student loans and this great start you have to your career. And particularly, thanks for the insight into Locums. I think a lot of people wonder about that, wonder how it might fit into their life. And you've demonstrated that for a lot of people, it can work out just fine and include significant financial and control benefits. So thank you so much for being a white coat investor. Thanks for being willing to come on the podcast.
- [23:56]
B
Thanks, Dr. Dali. Thanks so much. Obviously, I referred your website. That whole six months that I left and didn't work after fellowship, I literally went from number one of your podcast and just went through all of them one by one. And by the end or by somewhere in the middle, I said, I don't think I need to hire a financial advisor. I was about to. I was like, I think I need one. I don't know what I'm doing. And by the end I was like, okay, this is not that hard. I think I can do it.
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A
Awesome. Well, congratulations. That's a big step, so well done.
- [24:27]
B
Thank you. Thank you so much. Thanks for having me.
- [24:31]
A
Okay. Hope that was helpful to you. You know Locums, right? Locums control. You get to be self employed. You get to decide whether you take three months off at a time. You get to decide where you're going to work. If you're willing to be flexible with your location, it's pretty awesome. The deal, you can get all your living expenses paid plus a generous income, right? What's not to like there? Yes, it might not work very well if you're stuck in one geographic region for one reason or another. But it's pretty amazing what percentage of docs that sort of thing can work for. At least for part of their career or part of their year or part of their practice or whatever. Even if you're married, even if you have kids, maybe the kids get homeschooled, maybe your spouse has a location, independent job, right? There's lots of ways. Maybe you take a nanny with you, I don't know. There's lots of different ways you can make locums work for you when you're getting paid significantly more and they're covering all your living expenses. It's pretty amazing what other things you can do with that money to make it work for you. So check that out if that makes sense for part or all of your career. Something worth checking out. I told you at the top. We're going to talk a little bit about dental insurance. Dental insurance is not necessarily catastrophic coverage. In fact, most dental insurance plans have a cap on what they'll pay. In some ways, it's almost the opposite of insurance. Dental insurance pays for the cheap stuff, it doesn't pay for the expensive stuff. You know, it'll often cover your cleanings and your exams and the first 50% of your cavities until the plan's paid out, I don't know, $2,000 or $3,000 or something like that. It is relatively inexpensive and it's often provided by your employer as a nice benefit. And it's a good reminder that you ought to go in and get your teeth cleaned and examined every now and then. But it's not exactly the same thing as a catastrophic health insurance policy where when you fall off the side of a mountain, you really need that health insurance. So dental insurance is pretty optional. And it's optional in the lives of a lot of our dentists that are white coat investors, right? They're like, we're not going to bother with insurance or you got to pay this in addition to the insurance or whatever. So they have kind of a different relationship with insurance than a lot of people, like emergency doctors do, where we kind of take what we can get because we're happy to have it. A lot of times they pick and choose which dental insurances they take or whether they take it at all or. Or maybe have you do all the reimbursement hassle with billing your dental insurance for payment of the services that you've engaged them for. So it's a little bit different in those respects. Optional to buy. We've had it for most of my career. We like it. If nothing else, it's a good reminder and a good incentive to get in there and get our money's worth out of it. Which usually means doing your cleanings and exams. And I think it promotes good dental health in that respect. But if somebody said I'm just going to play cash for my dental insurance, I wouldn't say they're making a bad financial move. So in other respects it works a lot like medical insurance. There tends to be co pays, there tends to be co insurance. Just read the plan, understand what you've bought, and if it works for you, go ahead and use it. If nothing else, it allows you to buy some of your dental care with pre tax dollars Our sponsor for this episode was MLG Capital. They say step away from the volatility of the markets. Put your money back to work with MLG Capital's series of private real estate investment funds. With over 35 years in the real estate industry, MLG Capital has the experience to provide investors with substantial returns and the track record to back it up, more than doubling every dollar invested through multiple investment cycles. Their series of private investment Funds target an 11 to 15% rate of return net to investors through tax efficient quarterly dist. The fund structure prioritizes generous returns to investors first before MLG can share in any profits, demonstrating their culture of absolute integrity. Experience the peace of mind that comes with investing in diversified private real estate with MLG Capital. Learn more about Investing by visiting www.mlgcapital.com Whitecoatinvestor thanks for listening to the podcast. Without you, it's not much of a podcast. You can apply to Come on the milestones podcast@whitecoatinvestor.com Milestones. Keep your head up and shoulders back. We'll see you next time on the podcast. The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.