MtoM #286: How This OB/GYN Paid Off $200K in Student Loans in 4 Years - White Coat Investor Podcast

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[00:00]
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This is the White Coat Investor Podcast, Milestones to Millionaire, celebrating stories of success along the journey to financial freedom.
[00:14]
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Welcome to the Milestones to Millionaire podcast. This podcast is sponsored by Bob Baiani at Protuity, an independent provider of disability insurance planning solutions to the medical community in every state and a longtime White Coat Investor sponsor. Bob specializes in working with residents and fellows earlier in their careers to set up sound financial and insurance strategies. If you need to review your disability insurance coverage or just get this critical insurance in place, contact bob@whitecoatinvestor.com Protuity. You can also email infoprotuity.com or call 973-771-9100. All right, those of you interested in learning more about real estate investing, we have a free resource for you that we call our Real Estate Option Opportunities List. All it is is an email list. So we send you some emails. It costs you nothing. You can unsubscribe at any time. You can sign up@whitecoatinvestor.com reopportunities and what you'll do is you'll get emails. Some of them come from us. They're just educational emails, newsletters about real estate investing. I tell you about my real estate investments, et cetera. Some of them come from our sponsors. Obviously they want to tell you about the real estate investments, but they also put all kinds of educational content in there. And you can learn a lot about real estate investing, whether you want to do it directly, whether you want to do it passively. It's a great opportunity to learn. Totally free. You can unsubscribe at any time. Go to whitecoininvestor.com reopportunities to learn more. All right, we've got a great guest on. Let's get her on and hear from her. Our guest today on the Milestones to Millionaire podcast is Rachel. Rachel, welcome to the podcast.
[01:54]
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Hi. Thank you for having me.
[01:56]
B
Introduce yourself a little bit to our audience. Tell em what you do for a living, what part of the country you're in, how far you are out of training.
[02:03]
A
Sure. I'm a generalist OB gyn. I'm in Texas and I'm six years out of residency. But I did apply to be on the podcast about a year ago. It's just taken some time.
[02:15]
B
Yeah, that happens a lot. We have lots of people that want to come on the podcast. If you want to come on the podcast, you can go to whitecoatinvestor.commilestones and apply. Sometimes it does take a few months or years to get people on. But let's go back a year now and talk about what you accomplished a year ago. What milestone did you hit?
[02:33]
A
Yeah, about a year and a half ago, I was able to pay off all of my student loans from medical school. Awesome.
[02:42]
B
How much did you pay off?
[02:44]
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About 200,000.
[02:47]
B
$200,000 in four and a half years or so?
[02:51]
A
Yeah, it took a little bit of time just because of bureaucracy and nuances of the program I was in. And so it was a four year program. It was a student loan repayment program.
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B
Tell us about that.
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So it's called the physician education student loan repayment program. It's a mouthful, but it's a Texas based program and you have to work in a health profession shortage area and, or depending on their guidelines, on a yearly basis, you have to be able to see a certain number of Medicaid patients in the clinic. So it's an outpatient based type of student loan repayment program. So if you're in the emergency room or you're a hospitalist, unfortunately you don't qualify. But it is a clinic based type of loan repayment program. And basically each year you're in the program, you get a graduated amount of student loan repayment. So the first year was only $30,000 that was repaid. The second year was $40,000, $50,000, $60,000 and so on. It did add up to about 180,000 doll four years. And so I was able to qualify for all four years of the loan repayment program. And to me that was worth it. You had to do federal loans, Obviously you couldn't do private loans and you just had to meet those criteria.
[04:10]
B
And it's money from Texas, is that right?
[04:13]
A
Yeah.
[04:13]
B
Where's the money come from?
[04:15]
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The state.
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Okay.
[04:16]
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Yeah. Okay. And I didn't know about the program. I didn't know about it until I was looking for a job. And it was just kind of part of some recruitment efforts that told you about it. It was advertised.
[04:31]
B
I'm shocked actually that more jobs don't talk about, you know, public service loan forgiveness. Right. I mean, it's like for these docs with $300,000 in student loans, I mean, this is like an extra $75,000 after tax and pay. I'd be. If I was a recruiter, that would be like the first thing out of my mouth, not the last thing out of my mouth.
[04:52]
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Exactly.
[04:53]
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But that's pretty awesome. So did you have to go to like a rural community or practice in the inner city to qualify for this or what kind of practice do you have to have?
[05:03]
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So that's a really good question. I feel very lucky in the sense that I was able to practice in a county that was just outside of a city, and it's close to family, so I was able to find kind of a suburb type of setting.
[05:17]
B
Yeah. So it's not like you're. You're 200 miles away from the nearest city or, you know, it's not like anybody's getting shot outside your clinic door or anything like that, Right?
[05:27]
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Correct.
[05:28]
B
All right. You just had to see. What percentage of Medicaid patients did you have to see?
[05:32]
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It was a number. It was an absolute number. And I can't remember. I think it was about 100 patients in a year that had Medicaid.
[05:40]
B
That doesn't seem very hard to me. I feel like I see three or four Medicaid patients a shift.
[05:45]
A
Yeah.
[05:46]
B
Yeah. Okay. So, I mean, I'd guess a lot of gynecology jobs would qualify if that's the only requirement. Were there other requirements as well?
[05:57]
A
Just primary care in general. So OB GYN is considered primary care. Pediatrics and family medicine and internal medicine. So you had to be a primary care physician as well.
[06:08]
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Primary care specialty work in Texas. See at least 100 Medicaid and federal loans. Okay. Everybody that lives in Texas or is willing to relocate to Texas. I hope you just heard about this. Okay, well, that worked out really well for you because there's almost $200,000 and that's what you owed. You still had to pay some off yourself, though.
[06:26]
A
Yes, so I did make some payments toward interest in residency, and then, of course, it froze during the pandemic. So then I stopped making payments. And then, yeah, towards the end, I only had a few thousand to pay off from my savings, and I just decided to wipe the slate clean.
[06:47]
B
You just wrote a check?
[06:48]
A
Yeah.
[06:49]
B
Very cool. Congratulations on being done with student loans. Does it feel like you weren't really done with medical school until you were done paying for it?
[06:57]
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Yes. It loomed over my head. It felt like. And I know people have different mentalities about their student loan debt, but I felt really relieved, and it felt amazing. To pay it all off.
[07:08]
B
Did you feel like you had to take a job that paid less in order to get this benefit, or was this the sort of job you were looking for anyway and you got paid about what you expected to get paid anyway?
[07:19]
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Correct. I would say the latter is true. I had 18 people in my graduating residency class, and we kind of talked numbers a little bit, and I found Out I was. I got offered probably one of the top offers. On top of that, I was able to do my student loan repayment program. So I felt just really lucky in that way. And this was a practice that I was looking at joining anyway.
[07:42]
B
And of course, you're in Texas, so there's no state income tax, and you get pretty nice asset protection benefits. There's lots of nice things about being in Texas. Okay, so give us a sense of what knowing you had this going for your student loans allowed you to do five financially with the rest of your income.
[08:01]
A
So that's a great question, and I like how you asked it. Just because I wasn't that confident that I would get the money, if that makes sense, that I would get my student loans paid off, like, every year. I was kind of just biting or gritting my teeth just to see if the loan repayment would come through.
[08:20]
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It was like, for real.
[08:21]
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Like, I was like, I'm not going to believe it until I see it, until it hit my account. Because the fact that it was a state program made it a little bit difficult to get in touch with people that I needed to get in touch with. It's not like my company paid off this student loan. I had to separately apply for the student loan repayment program through the state. So then it was an online application, and anytime I emailed or called, it seemed like I was getting the runaround. And so I was like, is this really real? Is this really going to happen? I had to search, you know, find my. Find out my own answers for myself to, like, really solidify that I'm doing it right, that I'm filling out the application right, that I'm making the deadlines, that I'm communicating with who I need to communicate and just trust the process. And so I had this mentality of, like, I'm not going to live. Like, I'm going to be. Have all these loans paid off. I'm going to live. Like I still have this debt kind of looming in the back of my mind. And then I'm not going to believe that my student loans will be truly paid off until I see it. And so I just feel relieved that I was able to complete the program because I just. With the pandemic, it was frozen for a little while. The whole program wasn't really operating like it should. And just depending on, you know, how the state works and everything. And so how it impacted how I spent was we did buy a home, our first home in 2021, and a lot of our savings did Go towards the down payment for our home. And then since then, any extra money that we've made, we're trying to invest it wisely and max out our retirement accounts.
[10:16]
B
Now you're using a plural. There's a. There's a spouse or a partner here, it sounds like.
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Yeah, so my husband is in it. He was unemployed for over a year during that four year time frame after residenc. The industry's kind of competitive now in it, but he now has a pretty stable job. And we make about just over 500,000 in a year as a combined household.
[10:40]
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And you're six years out now because you paid these off like a year and a half ago. What's your net worth up to now? If you had to estimate it, we
[10:48]
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are over a million in assets, retirement accounts, home equity. We just added it up this morning and we're pleasantly surprised to see that.
[10:58]
B
Pretty awesome. Congratulations on becoming millionaires. We got all kinds of milestones today. This is great. Yeah, it's amazing when you get the payments down, right? When you're not having to make student loan payments or you're not having to make huge mortgage payments or car payments or whatever payments, how quickly you can start building wealth. But that's pretty awesome. Okay, so at some point in the last five or six years, you two had to kind of get on the same page about finances. Tell us a little bit about how you did that.
[11:30]
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So we do keep pretty separate finances and we do split the bills, but we have a little bit different philosophies when it comes to investing. I would say we're both pretty risk averse when it comes to spending and investing, and we both live well under our means. So I think we're on the same page with frugality. But when it comes to knowing what to do with our money, we're a little bit different.
[12:00]
B
You know, it's interesting because most financial gurus, financial advisors, whatever they say, you know, combine everything. Combine everything. Any particular reason you decided not to do that?
[12:11]
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No, it's just how we've always done it. I mean, we've been together 10 years, married four years.
[12:15]
B
Inertia mostly.
[12:16]
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Yeah, it's just like it's been working and we haven't found a reason to combine our finances. I do think that it's easier for us to have a combined checking account at least, you know, but other than that, we do keep things a little bit separate.
[12:31]
B
Okay, so tell us a little bit about what's your retirement situation? Where does your retirement money go, what's being offered by the employer versus what you do on your own?
[12:42]
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Yeah, through the employer. There's two different retirement accounts. It's a nonprofit. And then I do the backdoor Roth IRA every year. Other than that, that's all I have. And then I have my own brokerage account through Vanguard.
[13:00]
B
You said you're relatively conservative. What does your mix of investments, your asset allocation look like? How much do you put in stocks and bonds and cash, et cetera?
[13:09]
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It's about 60% in stock and about 20% in bonds right now. And then I have some other individual investments.
[13:18]
B
Very cool. Okay. Well, looking back on all this, how does it feel to have paid off your medical school loans, to be a millionaire six years out of training? Give people who are working toward this goal a sense of how they are going to feel when they get there.
[13:35]
A
I mean, it feels like I'm living the dream, to be honest, in the sense that money isn't everything. Right. But it's your perspective on it and having to reflect on how far you have come and realizing that you're the same person you were that entered medical school, but you now have this monetary success that's tied to it. And it feels amazing. It really. It really does. And you have to sit back and kind of relish in those accomplishments and those moments of success. It's indescribable in the sense that there's so much more I want to do and see and be, but I have to sit back and just relax and relish in this accomplishment. It feels amazing.
[14:24]
B
Okay. What advice do you have for somebody out there? There's somebody out there, you know, they're medical students or they're pre med and they're worried about borrowing money for medical school, or they're just finishing up residency, you know, as we're recording this at the end of June. And now they got to do something about 200 or 300 or $400,000 in student loans. What advice do you have for that person?
[14:45]
A
Just keep your eyes open. There are student loan repayment options out there that are not as readily advertised as you think they might be or should be. That might be through the state or through the federal government. And just take those opportunities to research. Because, yes, you might not want to pay off your student loans right away. Maybe there's something that gets a higher rate of return than your interest rate or you've refinan financed and you just kind of keep your student loans on the back burner. But if you have the opportunity to pay them off, pay them off because it's just a great feeling.
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Yeah, awesome. Well, thank you for being willing to come on the podcast. Thank you for being a white coat investor and congratulations to you on your success so far.
[15:29]
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Well, thanks for all you do. I feel like I learn a lot from you and so I'm going to be an avid listener from now on.
[15:37]
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Hope that's helpful to you. It's a demonstration of what happens when you pay attention to your finances. All of a sudden you find some other resource that's going to help you. Right? We all have pluses and minuses in our lives. We all have opportunities and challenges, upsides and downsides. Some people borrowed $400,000 for medical school. Other people only had to borrow 100. That's great. Take advantage of what worked well for you. This particular doc was in Texas. Lower tax cost to live there and she qualified for this great student loan repayment program. Take advantage of that. Right? Maybe she had some disadvantages as well. Right. That she had to work at and overcome. All of us have that situation. Take advantage of the good things, deal with the bad things, keep pressing forward. Remember, it's a one person game. It's you against your goals. The whole point here is to help you be successful financially so that you can be a better doc, so you can be a better partner, so you can be a better parent, so you can be better at everything. Everything else you do in life. Let's make it so you never have to worry about money again. Then you can start concentrating on what really matters in life. An index fund is a type of mutual fund that instead of trying to beat the market, just tries to match the market. Now, mutual funds are a great way to invest, right? You get economies of scale, you get professional management, you get daily liquidity, you get broad diversification with only having to buy one investment. They're wonderful. But there's two types, right? There's the type that's actively managed trying to beat the market. There's the type that is passively managed or just trying to match the market or the index. And it turns out in the long run that just matching the market beats most investors because most investors, including most professional investors, including most actively managed mutual funds, do not beat the index in the long term. And that's before taxes. Once you add in the effective taxes, even more funds underperform index funds. So index fund investors tend to acknowledge that I'm better off just taking the guarantee that I'm going to beat the vast majority of investors, even if I'm not going to beat all of them or I'm not going to outperform the index. Those returns are going to be good enough for me to reach my financial goals. Now, index funds can be traditional mutual funds. They can also be exchange traded funds, right? They're just two different types of mutual funds really. And index funds can use either type, but they differ from actively managed funds. And actively managed funds can also be traditional mutual funds or exchange traded funds. So it's not index funds and ETFs, it's not index funds and mutual funds. Index funds are a subcategory of both mutual funds and ETFs. Okay? The indices, these indexes, or whatever you want to say the plural of that is, are created by index providers. Okay? So there are classic ones, right, that have been around for decades and decades like the Dow Jones Industrial Average, right? Or the s and P500. There are others, the Russell 2000. There are all these different kinds of indexes and they were produced for different reasons historically. These days, many of them are produced so the index funds can be used that follow them. So you gotta be a little bit careful, right? When I'm talking about index funds, I'm generally talking about pretty broad based index funds, right? Things like the Total Stock Market index fund that tries to track all of the U.S. stocks. That fund might have 3,800 different stocks in it. Whereas there's probably an index fund out there that just follows kitchen stove makers, that sort of a thing, where it's a very narrow index and thus a very narrow and non diversified fund. When I'm talking about investing in index funds, those are not the type of ones I'm talking about. I'm talking about the broad based ones. So maybe you want to put a slice of your portfolio into real estate or something and you want an index fund that focuses on those real estate companies in the stock market. And I think that's fine. But recognize that there are indexes out there that are not very broad at all. And that's not what we're talking about when we're saying most people should invest most of their money into index funds. We're talking about buying all the stocks as a strategy, recognizing that yes, you'll own the losers, but you're going to own every single one of the winners. And over the long run, it's going to get you the market return and that's going to get you to your financial goals. Part of the reason why these index funds outperform active funds is because they have low costs, right? It isn't that it's impossible to beat the market. It's just that it costs a lot of money to beat the market. You gotta hire all these analysts, you gotta send them out to research these companies and talk to these people working in these companies and do all this research and have all these high powered computing resources, right? And it turns out when you add in the cost of doing that, you can't outperform by enough to cover your costs. And that's not because these people aren't smart. They are smart. There's just too many smart people. And so, at the end of the day, the market is the compilation of all these smart people and their opinions about what stocks are worth. And so the index fund investors are essentially free riding on all these people trying to beat the market and all the effort they're putting in to try to make sure stocks are priced appropriately or to buy them if they're maybe a little too underpriced, or to sell them if they're a little too overpriced. And that makes the market efficient enough. Not perfectly efficient, but efficient enough that the right thing to do as an investor is to act as though the market is perfectly efficient. The way you do that is just by buying all the stocks with an index funds. And it turns out that this is relatively easy to do. It's not hard to match the market. I mean, there is some expertise involved in it, there's some computing resources. And if you talk to the people who run these big index funds at Vanguard or wherever, there's a little bit of nuance to doing it. But the bottom line is it's dramatically less expensive than running an actively managed mutual fund. And so the expense ratios on these funds can be very low. It's not unusual to see them at 0.03% or 3 basis points. They might be 5 basis points or 10 or 15 basis points, a few of them at Fidelity, or even zero basis points. But the point is, when you've gotten your expenses for running that fund down below about 15 basis points, it's essentially free, right? Investing is free. You can buy every stock in the world in 30 seconds for free, right? Essentially free, right. And so that's why index funds are so inexpensive, because it just doesn't take that much in resources to match the market, especially as the fund gets really big and you get all these economies of scale. Now, fees do matter, right? They matter. Over a long investing lifetime, you've heard about compounding your returns. Well, you also compound your costs over time. And a lot of people talk about 1%. 1% is like what the average mutual fund charges. 1% is what a typical financial advisor charges. And over the course of 30 years, that adds up to having about a third less money than you would otherwise have if you were investing for free. So fees do matter. The only place they can come out of is your return. Right. And fees when it comes to a mutual fund like an index fund are generally expressed as an expense ratio. Right? So of the assets in the fund, what percentage of them was spent on running the fund this year? And that definitely ought to be less than 1%. It probably less than 0.1% when it comes to an index fund, but that's what the expense ratio is. I mentioned taxes earlier. Index funds are generally considered more tax efficient than actively managed mutual funds. And that's simply an effect of the turnover. Right? Because you're just trying to track the index, you're not trying to beat it. So you're not constantly buying and selling different stocks. Well, when you do that, you generate capital gains. And by law those capital gains have to be distributed to the investors in the mutual fund every year. So if you're an actively managed fund with 60 or 90 or 150% turnover every year, you're going to send out a lot of capital gains to those investors and they're going to have to pay taxes on them and they're going to have lower after tax returns. Whereas if Your turnover is 3%, like is often seen in something like the total stock market index fund, they don't have to distribute hardly any capital gains to you and might not distribute capital gains for literally years or even decades. And so it's very tax efficient compared to active funds. And that makes it even harder for these active managers to beat the index funds in the long run on an after tax basis. When you're investing inside a taxable account, sometimes people wonder if there's a point in which you have so much wealth that you need to do something different than index funds. And the truth is, you don't. You can invest $50,000 or $500,000 or $5,000,000 or $50,000,000 into a total stock market index fund. And it works about the same, right? You can do it with $500 or $1,000, whatever the minimum might be for that particular fund. With ETFs, the minimum is usually just one share price, whatever the price of one share might be. And so there really is not a time when you have to stop investing in index funds and you have to do something more complicated. Or go into private investments. Now, sometimes there's a role for some of that stuff in a portfolio and that's okay. And oftentimes it sense to consider those things once you reach a certain level of wealth. But you don't have to stop using index funds. Even at our current level of wealth, I still have the vast majority of our money invested in boring old index funds. Some people worry that indexing is getting too popular and that that could create problems when everybody's indexing. Well, now the market's not efficient, stocks aren't priced properly, and now we're running up the prices of, you know, the popular stock's way too much. Well, I suppose that is a risk if everybody is indexing. But the truth is you can have the vast majority of people be indexing. You don't need that many active managers to make indexing the right thing to do. You just need enough that the market remains efficient, enough that the right move is to just buy the market. And so I wouldn't worry about indexing being too popular until certainly upwards of 90 or 95 or maybe even 99% of the money in the market is indexed, because there's still going to be plenty of opportunists and entrepreneurs out there trying to make a buck by finding stocks that are not properly priced by the market, that they will move those prices to where they ought to be and make indexing the right move. So don't make the mistake that lots of investors do in abandoning index funds, thinking that actively managed mutual funds are better in bull markets or better in bear markets, or better once you have a certain amount of money and is just not the case. Right. The data is very robust. The index funds outperform traditional actively managed mutual funds. So don't be afraid to invest in them. And you probably ought to be investing the vast majority of your certainly your stock investments into index mutual funds. Hope that helps you understand the benefits of index funds and what they are. This podcast was sponsored by Bob Bayani at Protuity. One listener sent us his review. Bob has been absolutely terrific to work with, always quickly and clearly communicating with me by both email and or telephone. Responding to my inquiries the same day I send them. I have somewhat of a unique situation and Bob has been able to help explain the implications and underwriting process in a clear and professional manner. Contact Bob by calling 973-771-9100, emailing infotuity.com or or by going to whitecoatinvestor.com Protuity to get disability insurance in place today. Thank you for listening to the podcast. Without you, it's not much of a podcast. Keep your head up, your shoulders back. Thanks for what you do. We'll see you next time on the Milestones to Millionaire podcast.
[28:02]
A
The White Coat Investor Podcast is for your entertainment and information only and should not be considered financial, legal, tax or investment advice. Investing involves risk, including the possible loss of principal. You should consult the appropriate professional for specific advice relating to your situation.

Summary5 min read

White Coat Investor Podcast — Milestones to Millionaire #286
"How This OB/GYN Paid Off $200K in Student Loans in 4 Years"
Date: August 3, 2026
Host: Dr. Jim Dahle
Guest: Dr. Rachel, Generalist OB/GYN

Episode Overview

In this episode, Dr. Jim Dahle welcomes Dr. Rachel, a Texas-based OB/GYN, to share her journey of paying off $200,000 in student loans in just four years via a state loan repayment program. The discussion highlights the specifics of the program, the impact on her personal finances, her family’s financial approach, and advice for fellow clinicians facing significant student debt. The conversation offers inspiration and practical steps for high-income professionals—especially those in medicine—looking to achieve financial milestones on their path to financial freedom.

Key Discussion Points & Insights

Dr. Rachel’s Background and Milestone

[02:02] Dr. Rachel introduces herself as a generalist OB/GYN in Texas, now six years out of residency.
Milestone reached: paid off approximately $200,000 in student loans a year and a half ago.

Texas State Loan Repayment Program

Details of the Program
- Official name: Physician Education Student Loan Repayment Program (PESLRP)
- [03:01] "It's a Texas-based program, and you have to work in a health profession shortage area...or see a certain number of Medicaid patients in the clinic." — Dr. Rachel
- Program specifically for primary care (OB/GYN, pediatrics, family med, internal med).
- Requires working in outpatient clinic settings, not applicable for ER or hospitalists.
- Repayment schedule:
  - Year 1: $30,000
  - Year 2: $40,000
  - Year 3: $50,000
  - Year 4: $60,000
  - Four-year total up to ~$180,000, only for federal (not private) student loans.
Applicability: Not necessarily rural/inner city — “suburb-type” settings can qualify if designated as shortage areas.

Job Fit and Financial Impact

[07:19] Dr. Rachel explains she did not have to sacrifice salary for loan repayment:
- "I got offered probably one of the top offers. On top of that, I was able to do my student loan repayment program. So I felt just really lucky in that way." — Dr. Rachel
No state income tax in Texas — an added financial benefit.

Managing Financial Uncertainty

[08:00] Dr. Rachel describes the uncertainty of the state program:
- "I wasn't that confident that I would get the money...every year I was kind of just gritting my teeth just to see if the loan repayment would come through." — Dr. Rachel
- Bureaucracy and pandemic-related delays meant she continued to live and budget as if the loans weren't being paid.
- Used savings for a home down payment and focused on maxing out retirement accounts as loans were paid off.

Family Financial Dynamics

[10:19] Married; spouse works in IT (had a period of unemployment post-residency).
- Combined income just over $500,000 per year.
- Net worth now exceeds $1 million, including retirement accounts and home equity.
Approach to Joint Finances
- Keep finances mostly separate, split bills, and each manages investments individually.
- "[Keeping things separate] has been working and we haven't found a reason to combine our finances." — Dr. Rachel ([12:16])

Investment Strategy & Retirement Accounts

Employer offers two different retirement accounts (nonprofit employer).
Dr. Rachel does a Backdoor Roth IRA annually and has a personal brokerage account (Vanguard).
Portfolio is “relatively conservative”: approximately 60% stocks, 20% bonds, with some individual investments.

Reflections, Feelings, and Advice

On Paying Off Student Loans
- “It feels like I'm living the dream...there’s so much more I want to do and see and be, but I have to sit back and just...relish in this accomplishment.” — Dr. Rachel ([13:35])
Advice to Medical Trainees and Young Doctors
- "Keep your eyes open. There are student loan repayment options out there that are not as readily advertised as you think they might be or should be...If you have the opportunity to pay them off, pay them off because it's just a great feeling." — Dr. Rachel ([14:45])

Notable Quotes & Memorable Moments

On the Loan Repayment Program:
- "OBGYN is considered primary care, so you had to be a primary care physician as well." — Dr. Rachel ([05:56])
- "I feel very lucky in the sense that I was able to practice in a county that was just outside of a city, and it's close to family..." — Dr. Rachel ([05:02])
Relief of Being Debt-Free:
- "Does it feel like you weren’t really done with medical school until you were done paying for it?" — Dr. Jim Dahle
  - “Yes. It loomed over my head...I felt really relieved, and it felt amazing to pay it all off.” — Dr. Rachel ([06:57])
Encouragement from the Host:
- "Take advantage of the good things, deal with the bad things, and keep pressing forward. Remember, it's a one-person game: it's you against your goals." — Dr. Jim Dahle ([15:36])

Important Timestamps

Introductions & Background: [01:54]–[02:33]
Loan Repayment Program Details: [03:00]–[06:07]
Balancing Salary and Loan Repayment: [07:08]–[07:41]
The Emotional Journey & Financial Mindset: [08:00]–[10:15]
Family Finances & Net Worth: [10:15]–[10:58]
Marriage and Money Management Style: [11:30]–[12:31]
Retirement and Investment Discussion: [12:42]–[13:18]
Reflections on Wealth & Accomplishment: [13:35]–[14:24]
Advice for New Doctors & Students: [14:45]–[15:21]

Tone & Style

The conversation throughout is practical, encouraging, and candid—typical of Dr. Dahle's down-to-earth, educational style. Dr. Rachel is open about her journey, the uncertainties she navigated, and the satisfaction and relief in achieving key financial milestones.

Key Takeaways

State and Federal Loan Repayment Programs can dramatically reduce the real cost of medical education, even for those outside traditional public service or rural roles.
Understanding Fine Print is Critical: Programs may have unexpected eligibility criteria and require persistence amid bureaucratic hurdles.
Paying Loans Early Pays Off Emotionally: Many feel true professional freedom only after loans are eliminated.
Keep Your Eyes Open for Underpublicized Opportunities: Dr. Rachel only discovered the Texas program via a job recruiter—not during training.
Personal Finance is a Team Sport: Open communication and shared vision with a partner—even if finances remain partially separate—can accelerate wealth building.

For Listeners: Action Steps

If you’re in Texas or open to relocation, investigate the state’s student loan repayment programs, especially in primary care.
Ask about loan repayment in job interviews—it may be a hidden but substantial benefit.
If overwhelmed by student debt, remember there are lesser-known paths to repayment—persistence and research pay off.
Maximize retirement contributions and practice frugal living to grow net worth quickly post-residency.

End Note:
This episode demonstrates how a combination of careful research, open-mindedness to opportunities, and disciplined financial habits can enable doctors (and other high-income professionals) to reach financial independence much sooner than expected, without sacrificing quality of life or career satisfaction.

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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.
[00:14]
B
Welcome to the Milestones to Millionaire podcast. This podcast is sponsored by Bob Baiani at Protuity, an independent provider of disability insurance planning solutions to the medical community in every state and a longtime White Coat Investor sponsor. Bob specializes in working with residents and fellows earlier in their careers to set up sound financial and insurance strategies. If you need to review your disability insurance coverage or just get this critical insurance in place, contact bob@whitecoatinvestor.com Protuity. You can also email infoprotuity.com or call 973-771-9100. All right, those of you interested in learning more about real estate investing, we have a free resource for you that we call our Real Estate Option Opportunities List. All it is is an email list. So we send you some emails. It costs you nothing. You can unsubscribe at any time. You can sign up@whitecoatinvestor.com reopportunities and what you'll do is you'll get emails. Some of them come from us. They're just educational emails, newsletters about real estate investing. I tell you about my real estate investments, et cetera. Some of them come from our sponsors. Obviously they want to tell you about the real estate investments, but they also put all kinds of educational content in there. And you can learn a lot about real estate investing, whether you want to do it directly, whether you want to do it passively. It's a great opportunity to learn. Totally free. You can unsubscribe at any time. Go to whitecoininvestor.com reopportunities to learn more. All right, we've got a great guest on. Let's get her on and hear from her. Our guest today on the Milestones to Millionaire podcast is Rachel. Rachel, welcome to the podcast.
[01:54]
A
Hi. Thank you for having me.
[01:56]
B
Introduce yourself a little bit to our audience. Tell em what you do for a living, what part of the country you're in, how far you are out of training.
[02:03]
A
Sure. I'm a generalist OB gyn. I'm in Texas and I'm six years out of residency. But I did apply to be on the podcast about a year ago. It's just taken some time.
[02:15]
B
Yeah, that happens a lot. We have lots of people that want to come on the podcast. If you want to come on the podcast, you can go to whitecoatinvestor.commilestones and apply. Sometimes it does take a few months or years to get people on. But let's go back a year now and talk about what you accomplished a year ago. What milestone did you hit?
[02:33]
A
Yeah, about a year and a half ago, I was able to pay off all of my student loans from medical school. Awesome.
[02:42]
B
How much did you pay off?
[02:44]
A
About 200,000.
[02:47]
B
$200,000 in four and a half years or so?
[02:51]
A
Yeah, it took a little bit of time just because of bureaucracy and nuances of the program I was in. And so it was a four year program. It was a student loan repayment program.
[03:00]
B
Tell us about that.
[03:02]
A
So it's called the physician education student loan repayment program. It's a mouthful, but it's a Texas based program and you have to work in a health profession shortage area and, or depending on their guidelines, on a yearly basis, you have to be able to see a certain number of Medicaid patients in the clinic. So it's an outpatient based type of student loan repayment program. So if you're in the emergency room or you're a hospitalist, unfortunately you don't qualify. But it is a clinic based type of loan repayment program. And basically each year you're in the program, you get a graduated amount of student loan repayment. So the first year was only $30,000 that was repaid. The second year was $40,000, $50,000, $60,000 and so on. It did add up to about 180,000 doll four years. And so I was able to qualify for all four years of the loan repayment program. And to me that was worth it. You had to do federal loans, Obviously you couldn't do private loans and you just had to meet those criteria.
[04:10]
B
And it's money from Texas, is that right?
[04:13]
A
Yeah.
[04:13]
B
Where's the money come from?
[04:15]
A
The state.
[04:15]
B
Okay.
[04:16]
A
Yeah. Okay. And I didn't know about the program. I didn't know about it until I was looking for a job. And it was just kind of part of some recruitment efforts that told you about it. It was advertised.
[04:31]
B
I'm shocked actually that more jobs don't talk about, you know, public service loan forgiveness. Right. I mean, it's like for these docs with $300,000 in student loans, I mean, this is like an extra $75,000 after tax and pay. I'd be. If I was a recruiter, that would be like the first thing out of my mouth, not the last thing out of my mouth.
[04:52]
A
Exactly.
[04:53]
B
But that's pretty awesome. So did you have to go to like a rural community or practice in the inner city to qualify for this or what kind of practice do you have to have?
[05:03]
A
So that's a really good question. I feel very lucky in the sense that I was able to practice in a county that was just outside of a city, and it's close to family, so I was able to find kind of a suburb type of setting.
[05:17]
B
Yeah. So it's not like you're. You're 200 miles away from the nearest city or, you know, it's not like anybody's getting shot outside your clinic door or anything like that, Right?
[05:27]
A
Correct.
[05:28]
B
All right. You just had to see. What percentage of Medicaid patients did you have to see?
[05:32]
A
It was a number. It was an absolute number. And I can't remember. I think it was about 100 patients in a year that had Medicaid.
[05:40]
B
That doesn't seem very hard to me. I feel like I see three or four Medicaid patients a shift.
[05:45]
A
Yeah.
[05:46]
B
Yeah. Okay. So, I mean, I'd guess a lot of gynecology jobs would qualify if that's the only requirement. Were there other requirements as well?
[05:57]
A
Just primary care in general. So OB GYN is considered primary care. Pediatrics and family medicine and internal medicine. So you had to be a primary care physician as well.
[06:08]
B
Primary care specialty work in Texas. See at least 100 Medicaid and federal loans. Okay. Everybody that lives in Texas or is willing to relocate to Texas. I hope you just heard about this. Okay, well, that worked out really well for you because there's almost $200,000 and that's what you owed. You still had to pay some off yourself, though.
[06:26]
A
Yes, so I did make some payments toward interest in residency, and then, of course, it froze during the pandemic. So then I stopped making payments. And then, yeah, towards the end, I only had a few thousand to pay off from my savings, and I just decided to wipe the slate clean.
[06:47]
B
You just wrote a check?
[06:48]
A
Yeah.
[06:49]
B
Very cool. Congratulations on being done with student loans. Does it feel like you weren't really done with medical school until you were done paying for it?
[06:57]
A
Yes. It loomed over my head. It felt like. And I know people have different mentalities about their student loan debt, but I felt really relieved, and it felt amazing. To pay it all off.
[07:08]
B
Did you feel like you had to take a job that paid less in order to get this benefit, or was this the sort of job you were looking for anyway and you got paid about what you expected to get paid anyway?
[07:19]
A
Correct. I would say the latter is true. I had 18 people in my graduating residency class, and we kind of talked numbers a little bit, and I found Out I was. I got offered probably one of the top offers. On top of that, I was able to do my student loan repayment program. So I felt just really lucky in that way. And this was a practice that I was looking at joining anyway.
[07:42]
B
And of course, you're in Texas, so there's no state income tax, and you get pretty nice asset protection benefits. There's lots of nice things about being in Texas. Okay, so give us a sense of what knowing you had this going for your student loans allowed you to do five financially with the rest of your income.
[08:01]
A
So that's a great question, and I like how you asked it. Just because I wasn't that confident that I would get the money, if that makes sense, that I would get my student loans paid off, like, every year. I was kind of just biting or gritting my teeth just to see if the loan repayment would come through.
[08:20]
B
It was like, for real.
[08:21]
A
Like, I was like, I'm not going to believe it until I see it, until it hit my account. Because the fact that it was a state program made it a little bit difficult to get in touch with people that I needed to get in touch with. It's not like my company paid off this student loan. I had to separately apply for the student loan repayment program through the state. So then it was an online application, and anytime I emailed or called, it seemed like I was getting the runaround. And so I was like, is this really real? Is this really going to happen? I had to search, you know, find my. Find out my own answers for myself to, like, really solidify that I'm doing it right, that I'm filling out the application right, that I'm making the deadlines, that I'm communicating with who I need to communicate and just trust the process. And so I had this mentality of, like, I'm not going to live. Like, I'm going to be. Have all these loans paid off. I'm going to live. Like I still have this debt kind of looming in the back of my mind. And then I'm not going to believe that my student loans will be truly paid off until I see it. And so I just feel relieved that I was able to complete the program because I just. With the pandemic, it was frozen for a little while. The whole program wasn't really operating like it should. And just depending on, you know, how the state works and everything. And so how it impacted how I spent was we did buy a home, our first home in 2021, and a lot of our savings did Go towards the down payment for our home. And then since then, any extra money that we've made, we're trying to invest it wisely and max out our retirement accounts.
[10:16]
B
Now you're using a plural. There's a. There's a spouse or a partner here, it sounds like.
[10:20]
A
Yeah, so my husband is in it. He was unemployed for over a year during that four year time frame after residenc. The industry's kind of competitive now in it, but he now has a pretty stable job. And we make about just over 500,000 in a year as a combined household.
[10:40]
B
And you're six years out now because you paid these off like a year and a half ago. What's your net worth up to now? If you had to estimate it, we
[10:48]
A
are over a million in assets, retirement accounts, home equity. We just added it up this morning and we're pleasantly surprised to see that.
[10:58]
B
Pretty awesome. Congratulations on becoming millionaires. We got all kinds of milestones today. This is great. Yeah, it's amazing when you get the payments down, right? When you're not having to make student loan payments or you're not having to make huge mortgage payments or car payments or whatever payments, how quickly you can start building wealth. But that's pretty awesome. Okay, so at some point in the last five or six years, you two had to kind of get on the same page about finances. Tell us a little bit about how you did that.
[11:30]
A
So we do keep pretty separate finances and we do split the bills, but we have a little bit different philosophies when it comes to investing. I would say we're both pretty risk averse when it comes to spending and investing, and we both live well under our means. So I think we're on the same page with frugality. But when it comes to knowing what to do with our money, we're a little bit different.
[12:00]
B
You know, it's interesting because most financial gurus, financial advisors, whatever they say, you know, combine everything. Combine everything. Any particular reason you decided not to do that?
[12:11]
A
No, it's just how we've always done it. I mean, we've been together 10 years, married four years.
[12:15]
B
Inertia mostly.
[12:16]
A
Yeah, it's just like it's been working and we haven't found a reason to combine our finances. I do think that it's easier for us to have a combined checking account at least, you know, but other than that, we do keep things a little bit separate.
[12:31]
B
Okay, so tell us a little bit about what's your retirement situation? Where does your retirement money go, what's being offered by the employer versus what you do on your own?
[12:42]
A
Yeah, through the employer. There's two different retirement accounts. It's a nonprofit. And then I do the backdoor Roth IRA every year. Other than that, that's all I have. And then I have my own brokerage account through Vanguard.
[13:00]
B
You said you're relatively conservative. What does your mix of investments, your asset allocation look like? How much do you put in stocks and bonds and cash, et cetera?
[13:09]
A
It's about 60% in stock and about 20% in bonds right now. And then I have some other individual investments.
[13:18]
B
Very cool. Okay. Well, looking back on all this, how does it feel to have paid off your medical school loans, to be a millionaire six years out of training? Give people who are working toward this goal a sense of how they are going to feel when they get there.
[13:35]
A
I mean, it feels like I'm living the dream, to be honest, in the sense that money isn't everything. Right. But it's your perspective on it and having to reflect on how far you have come and realizing that you're the same person you were that entered medical school, but you now have this monetary success that's tied to it. And it feels amazing. It really. It really does. And you have to sit back and kind of relish in those accomplishments and those moments of success. It's indescribable in the sense that there's so much more I want to do and see and be, but I have to sit back and just relax and relish in this accomplishment. It feels amazing.
[14:24]
B
Okay. What advice do you have for somebody out there? There's somebody out there, you know, they're medical students or they're pre med and they're worried about borrowing money for medical school, or they're just finishing up residency, you know, as we're recording this at the end of June. And now they got to do something about 200 or 300 or $400,000 in student loans. What advice do you have for that person?
[14:45]
A
Just keep your eyes open. There are student loan repayment options out there that are not as readily advertised as you think they might be or should be. That might be through the state or through the federal government. And just take those opportunities to research. Because, yes, you might not want to pay off your student loans right away. Maybe there's something that gets a higher rate of return than your interest rate or you've refinan financed and you just kind of keep your student loans on the back burner. But if you have the opportunity to pay them off, pay them off because it's just a great feeling.
[15:21]
B
Yeah, awesome. Well, thank you for being willing to come on the podcast. Thank you for being a white coat investor and congratulations to you on your success so far.
[15:29]
A
Well, thanks for all you do. I feel like I learn a lot from you and so I'm going to be an avid listener from now on.
[15:37]
B
Hope that's helpful to you. It's a demonstration of what happens when you pay attention to your finances. All of a sudden you find some other resource that's going to help you. Right? We all have pluses and minuses in our lives. We all have opportunities and challenges, upsides and downsides. Some people borrowed $400,000 for medical school. Other people only had to borrow 100. That's great. Take advantage of what worked well for you. This particular doc was in Texas. Lower tax cost to live there and she qualified for this great student loan repayment program. Take advantage of that. Right? Maybe she had some disadvantages as well. Right. That she had to work at and overcome. All of us have that situation. Take advantage of the good things, deal with the bad things, keep pressing forward. Remember, it's a one person game. It's you against your goals. The whole point here is to help you be successful financially so that you can be a better doc, so you can be a better partner, so you can be a better parent, so you can be better at everything. Everything else you do in life. Let's make it so you never have to worry about money again. Then you can start concentrating on what really matters in life. An index fund is a type of mutual fund that instead of trying to beat the market, just tries to match the market. Now, mutual funds are a great way to invest, right? You get economies of scale, you get professional management, you get daily liquidity, you get broad diversification with only having to buy one investment. They're wonderful. But there's two types, right? There's the type that's actively managed trying to beat the market. There's the type that is passively managed or just trying to match the market or the index. And it turns out in the long run that just matching the market beats most investors because most investors, including most professional investors, including most actively managed mutual funds, do not beat the index in the long term. And that's before taxes. Once you add in the effective taxes, even more funds underperform index funds. So index fund investors tend to acknowledge that I'm better off just taking the guarantee that I'm going to beat the vast majority of investors, even if I'm not going to beat all of them or I'm not going to outperform the index. Those returns are going to be good enough for me to reach my financial goals. Now, index funds can be traditional mutual funds. They can also be exchange traded funds, right? They're just two different types of mutual funds really. And index funds can use either type, but they differ from actively managed funds. And actively managed funds can also be traditional mutual funds or exchange traded funds. So it's not index funds and ETFs, it's not index funds and mutual funds. Index funds are a subcategory of both mutual funds and ETFs. Okay? The indices, these indexes, or whatever you want to say the plural of that is, are created by index providers. Okay? So there are classic ones, right, that have been around for decades and decades like the Dow Jones Industrial Average, right? Or the s and P500. There are others, the Russell 2000. There are all these different kinds of indexes and they were produced for different reasons historically. These days, many of them are produced so the index funds can be used that follow them. So you gotta be a little bit careful, right? When I'm talking about index funds, I'm generally talking about pretty broad based index funds, right? Things like the Total Stock Market index fund that tries to track all of the U.S. stocks. That fund might have 3,800 different stocks in it. Whereas there's probably an index fund out there that just follows kitchen stove makers, that sort of a thing, where it's a very narrow index and thus a very narrow and non diversified fund. When I'm talking about investing in index funds, those are not the type of ones I'm talking about. I'm talking about the broad based ones. So maybe you want to put a slice of your portfolio into real estate or something and you want an index fund that focuses on those real estate companies in the stock market. And I think that's fine. But recognize that there are indexes out there that are not very broad at all. And that's not what we're talking about when we're saying most people should invest most of their money into index funds. We're talking about buying all the stocks as a strategy, recognizing that yes, you'll own the losers, but you're going to own every single one of the winners. And over the long run, it's going to get you the market return and that's going to get you to your financial goals. Part of the reason why these index funds outperform active funds is because they have low costs, right? It isn't that it's impossible to beat the market. It's just that it costs a lot of money to beat the market. You gotta hire all these analysts, you gotta send them out to research these companies and talk to these people working in these companies and do all this research and have all these high powered computing resources, right? And it turns out when you add in the cost of doing that, you can't outperform by enough to cover your costs. And that's not because these people aren't smart. They are smart. There's just too many smart people. And so, at the end of the day, the market is the compilation of all these smart people and their opinions about what stocks are worth. And so the index fund investors are essentially free riding on all these people trying to beat the market and all the effort they're putting in to try to make sure stocks are priced appropriately or to buy them if they're maybe a little too underpriced, or to sell them if they're a little too overpriced. And that makes the market efficient enough. Not perfectly efficient, but efficient enough that the right thing to do as an investor is to act as though the market is perfectly efficient. The way you do that is just by buying all the stocks with an index funds. And it turns out that this is relatively easy to do. It's not hard to match the market. I mean, there is some expertise involved in it, there's some computing resources. And if you talk to the people who run these big index funds at Vanguard or wherever, there's a little bit of nuance to doing it. But the bottom line is it's dramatically less expensive than running an actively managed mutual fund. And so the expense ratios on these funds can be very low. It's not unusual to see them at 0.03% or 3 basis points. They might be 5 basis points or 10 or 15 basis points, a few of them at Fidelity, or even zero basis points. But the point is, when you've gotten your expenses for running that fund down below about 15 basis points, it's essentially free, right? Investing is free. You can buy every stock in the world in 30 seconds for free, right? Essentially free, right. And so that's why index funds are so inexpensive, because it just doesn't take that much in resources to match the market, especially as the fund gets really big and you get all these economies of scale. Now, fees do matter, right? They matter. Over a long investing lifetime, you've heard about compounding your returns. Well, you also compound your costs over time. And a lot of people talk about 1%. 1% is like what the average mutual fund charges. 1% is what a typical financial advisor charges. And over the course of 30 years, that adds up to having about a third less money than you would otherwise have if you were investing for free. So fees do matter. The only place they can come out of is your return. Right. And fees when it comes to a mutual fund like an index fund are generally expressed as an expense ratio. Right? So of the assets in the fund, what percentage of them was spent on running the fund this year? And that definitely ought to be less than 1%. It probably less than 0.1% when it comes to an index fund, but that's what the expense ratio is. I mentioned taxes earlier. Index funds are generally considered more tax efficient than actively managed mutual funds. And that's simply an effect of the turnover. Right? Because you're just trying to track the index, you're not trying to beat it. So you're not constantly buying and selling different stocks. Well, when you do that, you generate capital gains. And by law those capital gains have to be distributed to the investors in the mutual fund every year. So if you're an actively managed fund with 60 or 90 or 150% turnover every year, you're going to send out a lot of capital gains to those investors and they're going to have to pay taxes on them and they're going to have lower after tax returns. Whereas if Your turnover is 3%, like is often seen in something like the total stock market index fund, they don't have to distribute hardly any capital gains to you and might not distribute capital gains for literally years or even decades. And so it's very tax efficient compared to active funds. And that makes it even harder for these active managers to beat the index funds in the long run on an after tax basis. When you're investing inside a taxable account, sometimes people wonder if there's a point in which you have so much wealth that you need to do something different than index funds. And the truth is, you don't. You can invest $50,000 or $500,000 or $5,000,000 or $50,000,000 into a total stock market index fund. And it works about the same, right? You can do it with $500 or $1,000, whatever the minimum might be for that particular fund. With ETFs, the minimum is usually just one share price, whatever the price of one share might be. And so there really is not a time when you have to stop investing in index funds and you have to do something more complicated. Or go into private investments. Now, sometimes there's a role for some of that stuff in a portfolio and that's okay. And oftentimes it sense to consider those things once you reach a certain level of wealth. But you don't have to stop using index funds. Even at our current level of wealth, I still have the vast majority of our money invested in boring old index funds. Some people worry that indexing is getting too popular and that that could create problems when everybody's indexing. Well, now the market's not efficient, stocks aren't priced properly, and now we're running up the prices of, you know, the popular stock's way too much. Well, I suppose that is a risk if everybody is indexing. But the truth is you can have the vast majority of people be indexing. You don't need that many active managers to make indexing the right thing to do. You just need enough that the market remains efficient, enough that the right move is to just buy the market. And so I wouldn't worry about indexing being too popular until certainly upwards of 90 or 95 or maybe even 99% of the money in the market is indexed, because there's still going to be plenty of opportunists and entrepreneurs out there trying to make a buck by finding stocks that are not properly priced by the market, that they will move those prices to where they ought to be and make indexing the right move. So don't make the mistake that lots of investors do in abandoning index funds, thinking that actively managed mutual funds are better in bull markets or better in bear markets, or better once you have a certain amount of money and is just not the case. Right. The data is very robust. The index funds outperform traditional actively managed mutual funds. So don't be afraid to invest in them. And you probably ought to be investing the vast majority of your certainly your stock investments into index mutual funds. Hope that helps you understand the benefits of index funds and what they are. This podcast was sponsored by Bob Bayani at Protuity. One listener sent us his review. Bob has been absolutely terrific to work with, always quickly and clearly communicating with me by both email and or telephone. Responding to my inquiries the same day I send them. I have somewhat of a unique situation and Bob has been able to help explain the implications and underwriting process in a clear and professional manner. Contact Bob by calling 973-771-9100, emailing infotuity.com or or by going to whitecoatinvestor.com Protuity to get disability insurance in place today. Thank you for listening to the podcast. Without you, it's not much of a podcast. Keep your head up, your shoulders back. Thanks for what you do. We'll see you next time on the Milestones to Millionaire podcast.
[28:02]
A
The White Coat Investor Podcast is for your entertainment and information only and should not be considered financial, legal, tax or investment advice. Investing involves risk, including the possible loss of principal. You should consult the appropriate professional for specific advice relating to your situation.