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Medical LOC denied

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On 7/10/2019 at 11:12 AM, Comprehensible said:

I was told only my first set of cheques is free, which I already got. 

They should all be free. If not, then honestly, might be worth switching to a different advisor because yours doesn't seem to know what they're talking about.

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On 7/7/2019 at 2:54 PM, rmorelan said:

They have risen what? 150K in the past 10 years or so. Tuition has doubled. At some point we have to apply some controls here. We have been saying that for 15 years at least. 

As an M1, my LOC was $150k at prime (~6%).  That was the standard offering for med students.  And in getting that, I thought I had the world by the tail.

Can't even imagine $350k @P-0.25, even when prime is 3.95%. 

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32 minutes ago, ellorie said:

Yeah mine was 200k at prime and that seemed (and still seems) pretty astronomical. 

Mine was the same ha - I am glad of the flexibility it provided but even that is huge. 

I always push back a bit at how easily people seem to think paying that amount of money back is even as staff. Possible yes, trivial no.

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On 7/15/2019 at 11:18 AM, rmorelan said:

Mine was the same ha - I am glad of the flexibility it provided but even that is huge. 

I always push back a bit at how easily people seem to think paying that amount of money back is even as staff. Possible yes, trivial no.

Yes, very useful tool if used prudently.  Keyword = prudently.

And yes, paying it off with 47-cent dollars is painful and irritating. 

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12 minutes ago, ploughboy said:

Yes, very useful tool if used prudently.  Keyword = prudently.

And yes, paying it off with 47-cent dollars is painful and irritating. 

yeah it would help if everyone started by cutting the salary numbers they hear in half in terms of repayment. No you do not "make" that. You make 1/2 that ha. 

 

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10 hours ago, ploughboy said:

Yes, very useful tool if used prudently.  Keyword = prudently.

And yes, paying it off with 47-cent dollars is painful and irritating. 

The 47 cent dollars kills me every time I think about it. It makes me double enraged when I then see the government wasting so much of the 53 cents they take. 

To make it triple irritating, I get regular remarks from nursing staff about how I make "the big bucks". Meanwhile, while I worry about paying back my debt and saving for retirement, they talk about how they need to get a bigger cottage, a third ATV or a second boat. (That was literally a convo between three nurses standing in the OR while I operated). And they are younger than me....

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1 hour ago, NLengr said:

The 47 cent dollars kills me every time I think about it. It makes me double enraged when I then see the government wasting so much of the 53 cents they take. 

To make it triple irritating, I get regular remarks from nursing staff about how I make "the big bucks". Meanwhile, while I worry about paying back my debt and saving for retirement, they talk about how they need to get a bigger cottage, a third ATV or a second boat. (That was literally a convo between three nurses standing in the OR while I operated). And they are younger than me....

This is awful. :( 

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19 hours ago, NLengr said:

The 47 cent dollars kills me every time I think about it. It makes me double enraged when I then see the government wasting so much of the 53 cents they take. 

To make it triple irritating, I get regular remarks from nursing staff about how I make "the big bucks". Meanwhile, while I worry about paying back my debt and saving for retirement, they talk about how they need to get a bigger cottage, a third ATV or a second boat. (That was literally a convo between three nurses standing in the OR while I operated). And they are younger than me....

Yea debt is awful. Just to play devil's advocate  I will say that my friends and colleagues who live fancier lives than me despite making less may not be doing so in a financially responsible way. Easy to live large if you're never thinking about 30 years from now. 

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45 minutes ago, blah1234 said:

Yea debt is awful. Just to play devil's advocate  I will say that my friends and colleagues who live fancier lives than me despite making less may not be doing so in a financially responsible way. Easy to live large if you're never thinking about 30 years from now. 

Possibly having inheritances leads to that sort of life even though your making less income? I know a few people who have big inheritances coming their way in the future (2-3 million) and that leads to spending most of their income and not saving much at all.

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49 minutes ago, Compton said:

Possibly having inheritances leads to that sort of life even though your making less income? I know a few people who have big inheritances coming their way in the future (2-3 million) and that leads to spending most of their income and not saving much at all.

An amazing situation to be in. I wish I had that luxury :). I think if you know you have money coming in from another source then feel free to go nuts. 

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9 hours ago, blah1234 said:

An amazing situation to be in. I wish I had that luxury :). I think if you know you have money coming in from another source then feel free to go nuts. 

Nobody in the rural town I live in comes from money. They do love to pile on consumer debt though. 

 

Honestly, I should have spent less time studying in university and more time on trying to marry rich.....hahaha

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On 7/7/2019 at 11:54 AM, rmorelan said:

yes....yes it is. 

I mean really yeah it is. I can say with the sort of certainty of someone coming out the other side that you wouldn't want to come close to that level of debit. Sure you can pay it off in the end - but ok that still means for your average specialist spending over 1/2 their post tax income on killing the loan for 3 years roughly assuming they also didn't just have to similarly spend to get their practise up and running. This is adding years effectively to the end of training which already is taking 10-15 years. Yet the real problem is the severe limitations it can put on you during your training - it is great if you can pay it off in the end but the psychology of watching your pay cheques during residency significantly go to interest isn't great. Plus heaven forbid the interest rates actually rise - which is a big unknown. 

this is sort of a trap. Ok they raise tuition so the banks swop in and say ok we will raise your LOC so you are fine. Then the schools look at it and say with those sorts of LOCs you can afford more so I will bump up the tuition again. Along then comes the bank and..... You have banks on the governing boards of all these universities as well so if you were bit paranoid you might be wondering how all this went down. 

They have risen what? 150K in the past 10 years or so. Tuition has doubled. At some point we have to apply some controls here. We have been saying that for 15 years at least. 

It's definitely good to be mindful over debt, but this worry is a bit overblown I feel. Med school tuition in canada is still relatively affordable and if you are just a little careful you will be nowhere near 350k in debt.

Let's play with some actual numbers. UBC Med tuition just as an example is <100k for all 4 years. Let's say living costs are 25k a year which is pretty generous. Also assuming you aren't working part time at all. Let's also account for interest rate going up to 5%. So basically the worst case scenario.

After 4 years when you graduate med school, assuming interest has been accruing the entire time, you have 226k in debt. Let's say you succumb to lifestyle inflation right away while being a resident, go on expensive vacations, and you don't pay down your LOC at all and it just sits there accruing interest. At the end of residency this is the total amount of debt you have:

2 year residency: 250k
5 year residency: 290k
 

At the end of residency, on a 10 year repayment, the monthly payments are ~$2650 and ~$3080 respectively. On a GPs income, you can easily make that work and if you're making specialist income that amount of debt is a pittance. 

Again, using pessimistic numbers, 200k gross income as GP,  20k deductible expenses, leaves 180k which is 10k a month after taxes net. After servicing your debt, you have ~7000 a month for all living expenses which is a luxurious lifestyle. For some perspective, 7k a month net is equivalent to a 116k salary in BC which is ~95th percentile in terms of income in BC.



 

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4 hours ago, Lvl3sonly said:

It's definitely good to be mindful over debt, but this worry is a bit overblown I feel. Med school tuition in canada is still relatively affordable and if you are just a little careful you will be nowhere near 350k in debt.

Let's play with some actual numbers. UBC Med tuition just as an example is <100k for all 4 years. Let's say living costs are 25k a year which is pretty generous. Also assuming you aren't working part time at all. Let's also account for interest rate going up to 5%. So basically the worst case scenario.

After 4 years when you graduate med school, assuming interest has been accruing the entire time, you have 226k in debt. Let's say you succumb to lifestyle inflation right away while being a resident, go on expensive vacations, and you don't pay down your LOC at all and it just sits there accruing interest. At the end of residency this is the total amount of debt you have:

2 year residency: 250k
5 year residency: 290k
 

At the end of residency, on a 10 year repayment, the monthly payments are ~$2650 and ~$3080 respectively. On a GPs income, you can easily make that work and if you're making specialist income that amount of debt is a pittance. 

Again, using pessimistic numbers, 200k gross income as GP,  20k deductible expenses, leaves 180k which is 10k a month after taxes net. After servicing your debt, you have ~7000 a month for all living expenses which is a luxurious lifestyle. For some perspective, 7k a month net is equivalent to a 116k salary in BC which is ~95th percentile in terms of income in BC.



 

I wouldn't say 3k a month is a pittance. 

Remember, you are also gonna want to to stocking away a few grand a month for retirement. Plus a ton of insurances (say 600-1k a month once you factor in a ton of life, disability and health for yourself and your family). Housing can get pretty expensive too. I'm too lazy to go into more details. 

It's do-able but it sucks. 

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16 minutes ago, NLengr said:

I wouldn't say 3k a month is a pittance. 

Remember, you are also gonna want to to stocking away a few grand a month for retirement. Plus a ton of insurances (say 600-1k a month once you factor in a ton of life, disability and health for yourself and your family). Housing can get pretty expensive too. I'm too lazy to go into more details. 

It's do-able but it sucks. 

So if we do factor in insurances (800/month), and mortgage, realistically that would take your net take home of ~7000 to about 4500-5000. That is still a good income and you will have supplemental income from your S/O. As a household, I can see doctors living really well and saving for retirement. 

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7 minutes ago, Compton said:

So if we do factor in insurances (800/month), and mortgage, realistically that would take your net take home of ~7000 to about 4500-5000. That is still a good income and you will have supplemental income from your S/O. As a household, I can see doctors living really well and saving for retirement. 

I'm not saying you'll be eating Alpo, but it's not like people in med school imagine either.

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45 minutes ago, NLengr said:

I wouldn't say 3k a month is a pittance. 

Remember, you are also gonna want to to stocking away a few grand a month for retirement. Plus a ton of insurances (say 600-1k a month once you factor in a ton of life, disability and health for yourself and your family). Housing can get pretty expensive too. I'm too lazy to go into more details. 

It's do-able but it sucks. 

3k is definitely a pittance for someone making specialist income. All you need is disability and term life for insurance. 7200-12000 a year you are quoting is quite a high figure for insurance.

What is the average specialist making? Let's say 300k of taxable income after overhead and deductions. That's 15k net a month. That's also assuming you aren't incorporated. I don't know how anyone can say that sucks. People would kill to have that level of income and you can live a very luxurious lifestyle on that income.

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2 hours ago, Lvl3sonly said:

3k is definitely a pittance for someone making specialist income. All you need is disability and term life for insurance. 7200-12000 a year you are quoting is quite a high figure for insurance.

What is the average specialist making? Let's say 300k of taxable income after overhead and deductions. That's 15k net a month. That's also assuming you aren't incorporated. I don't know how anyone can say that sucks. People would kill to have that level of income and you can live a very luxurious lifestyle on that income.

You are going without health insurance for your family? Dental? Professional Overhead Expense? You probably need life and maybe disability for the spouse. All those add up quickly. I can also tell you from my own experience that as a staff with young children, you need way more life and disability than you think you will before you dig into the nitty gritty. 

I never said it wasn't a great income. I know that. I am a specialist. I know I make good money (and I work/have worked damn hard to get it). I said 3k a month isn't a pittance (look up the definition of pittance). If you think 3k a month is an insignificant amount, especially since it's post tax, then I don't know what to tell you.....

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15 hours ago, NLengr said:

Nobody in the rural town I live in comes from money. They do love to pile on consumer debt though. 

 

Honestly, I should have spent less time studying in university and more time on trying to marry rich.....hahaha

Yea, I actually know people that focused on marrying rich and they're doing great haha. I tell myself that being self sufficient is a great feeling but I wouldn't mind having ample free time and money from a rich benefactor.  

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15 hours ago, NLengr said:

You are going without health insurance for your family? Dental? Professional Overhead Expense? You probably need life and maybe disability for the spouse. All those add up quickly. I can also tell you from my own experience that as a staff with young children, you need way more life and disability than you think you will before you dig into the nitty gritty. 

I never said it wasn't a great income. I know that. I am a specialist. I know I make good money (and I work/have worked damn hard to get it). I said 3k a month isn't a pittance (look up the definition of pittance). If you think 3k a month is an insignificant amount, especially since it's post tax, then I don't know what to tell you.....

Health insurance for your family? Are you talking about for your kids? That's completely unnecessary. Same with dental. You don't NEED to have as much insurance as possible like the reps will tell you to for their commission. My own life insurance and disability is <$3000 a year. The 300k figure is already after professional overhead expense. 

3k is a pittance when you are making 15k net after taxes. 12k after tax is an amount most canadians would kill for. 

The whole point I am making is that med school debt is not in any way crippling. You can come out with like 300k debt and still live a lavish luxurious doctor lifestyle. 

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