Your debt paid off

[bloh]

I wasn't totally certain that sharing this much information was a good idea but then the more I thought about it, the more I realized that I would have appreciated seeing something like this 3-4 years ago.
This is a snapshot of my finances with monthly statements going from ~180,000 of debt to zero net worth.

It starts from first day of residency until January 2018. My hope was that I'd be able to shave some of it off during residency but it just wasn't realistically possible because I didn't want to compromise QOL.

For reference, I'm a GP. I work in a major city but did spend about 10 weekends including 2 full weeks rurally. I didn't keep track but I worked ~5.5-6 days/week with 4 weeks vacation.

Columns

Chequing - $ in my chequing account

Visa = $ owed on VISA

LOC = $ owed on LOC

Total Debt = self explanatory

Monthly change - Change in debt that month

Investing - $ used to invest in the stockmarket. For the calculation, this was a wash. However, if I actually used the current value of investments, my debt was "paid off" much sooner than shown.

Student loan - $ owed in student loans

Taxes YTD - Projected $ owed for taxes. I approximated 0.45 of gross income.

[bloh]

I think the weird bump in March 2017 was having to pay taxes for 2016

[JohnGrisham]

Interesting that you were pumping money into your investing while in residency instead of paying off your LOC, I assume you had prior experience with that?  

Nice informational though, would have been nice to have a more discrete representation of income and expenses.

[indefatigable]

thanks for sharing and congrats on paying off your debt so quickly.  If I'm reading this correctly you lowered your debt by about the equivalent of ~115K in a single calendar year on top of paying ~160K in taxes.  Without knowing much about your practice, that seems pretty exceptional since that's not even accounting for overhead or living expenses.  But congratulations, for sure - I didn't know starting GPs were able to earn that much income.  

[bloh]

2 hours ago, JohnGrisham said:

Interesting that you were pumping money into your investing while in residency instead of paying off your LOC, I assume you had prior experience with that?  

Nice informational though, would have been nice to have a more discrete representation of income and expenses.

Interest from money borrowed to invest is deductible, while money borrowed to go to school isn't. It's dumb actually since school is essentially an investment. Every dollar paid off from school was funneled into a trading account, based on opportunities. Sum of trading accounts is now ~210,000 so I've done reasonably well. And yes, I did have previous experience investing.

 

I haven't kept track of my expenses but they're more or less the same as they were in residency. Looking at calendar year 2015, debt went up by ~2000$ meaning that I spent all of my PGY1 income on expenses, accrued interest and was short 2000. So you could calculate the expenses based on aftertax income of PGY2 salary (AB) from that.

[JohnGrisham]

31 minutes ago, bloh said:

Interest from money borrowed to invest is deductible, while money borrowed to go to school isn't. It's dumb actually since school is essentially an investment. Every dollar paid off from school was funneled into a trading account, based on opportunities. Sum of trading accounts is now ~210,000 so I've done reasonably well. And yes, I did have previous experience investing.

 

I haven't kept track of my expenses but they're more or less the same as they were in residency. Looking at calendar year 2015, debt went up by ~2000$ meaning that I spent all of my PGY1 income on expenses, accrued interest and was short 2000. So you could calculate the expenses based on aftertax income of PGY2 salary (AB) from that.

Nice! Are you still working just as much as you were at the outset? Or dialed it back now that you're debt free and investments growing. 

[bloh]

I'm still working the same hours since I still technically have to pay the debt off and save for a downpayment. Will probably dial down to 4-5 days/week sometime next year.

[goleafsgochris]

This is great haha really cool to see.  

I remember starting as a staff in July and finding it annoying to not get paid until October.  Its not like my landlord stopped requiring rent or my debt didn't need interest payments during that time.  I could sense that I was earning a lot but still found it really stressful (which is irrational because I knew the money was coming, but still)

[NLengr]

On 22/02/2018 at 3:07 PM, goleafsgochris said:

This is great haha really cool to see.  

I remember starting as a staff in July and finding it annoying to not get paid until October.  Its not like my landlord stopped requiring rent or my debt didn't need interest payments during that time.  I could sense that I was earning a lot but still found it really stressful (which is irrational because I knew the money was coming, but still)

I had that happen when I started fellowship (I was paid 100% via assist fees and covering emerg cases off the board). It was a pretty lean 3 or 4 months. 

Then it happened again this year when I moved provinces and started as staff. 

[goleafsgochris]

26 minutes ago, NLengr said:

I had that happen when I started fellowship (I was paid 100% via assist fees and covering emerg cases off the board). It was a pretty lean 3 or 4 months. 

Then it happened again this year when I moved provinces and started as staff. 

I know a girl who had maxed out her LOC and literally had to borrow money from her parents to get through the few months paying rent, getting food etc.  Luckily most people in medicine have well off families but it really is absurd that it takes 3 and a half months

[jfdes]

Great thread, thanks for posting!

I have a question - are the amounts under "Student Loan" are government student loans? If so, how come you don't have to make payments to them, and why didn't you pay them off with the LOC?

[bloh]

On 11/13/2018 at 2:46 AM, jfdes said:

Great thread, thanks for posting!

I have a question - are the amounts under "Student Loan" are government student loans? If so, how come you don't have to make payments to them, and why didn't you pay them off with the LOC?

They are government loans. You can put them on hold as long as you're in school/residency if you fill out a form.

I didn't pay them with the LOC (even though LOC % is lower) because the interest is tax deductible.

 

No one will care but this will be my last post on these forums. About a month ago, I suspect Artzin was given a bit too much scutwork on the wards and wanted to take it out on someone by  banning me (for a single innocous post) from posting for an entire month.

There's actually no accountability on these forums as you can't even contact anyone to discuss/appeal (while you are banned)  which leads me to believe this happens way more than anyone knows. It's probably time I move off from these forums anyway.

[blah1234]

59 minutes ago, bloh said:

They are government loans. You can put them on hold as long as you're in school/residency if you fill out a form.

I didn't pay them with the LOC (even though LOC % is lower) because the interest is tax deductible.

 

No one will care but this will be my last post on these forums. About a month ago, I suspect Artzin was given a bit too much scutwork on the wards and wanted to take it out on someone by  banning me (for a single innocous post) from posting for an entire month.

There's actually no accountability on these forums as you can't even contact anyone to discuss/appeal (while you are banned)  which leads me to believe this happens way more than anyone knows. It's probably time I move off from these forums anyway.

Sorry to hear that. I was inspired by the activity of staff on the forums to post myself and give back. I hope you'll stay and help continue to provide useful info to the next generation.

[jfdes]

4 hours ago, bloh said:

They are government loans. You can put them on hold as long as you're in school/residency if you fill out a form.

I didn't pay them with the LOC (even though LOC % is lower) because the interest is tax deductible. 

 

No one will care but this will be my last post on these forums. About a month ago, I suspect Artzin was given a bit too much scutwork on the wards and wanted to take it out on someone by  banning me (for a single innocous post) from posting for an entire month.

There's actually no accountability on these forums as you can't even contact anyone to discuss/appeal (while you are banned)  which leads me to believe this happens way more than anyone knows. It's probably time I move off from these forums anyway.

Thanks, I appreciate you responding.

I was under the impression that even with the interest being tax deductible the LOC rate will still be better then government rate + deducting interest, but I will have another look at that. I was also not aware they would suspend payments during residency. If you see this and are able to respond again, could you comment on whether interest accrues during residency?

[holiday1001]

12 hours ago, bloh said:

 

No one will care but this will be my last post on these forums. About a month ago, I suspect Artzin was given a bit too much scutwork on the wards and wanted to take it out on someone by  banning me (for a single innocous post) from posting for an entire month.

wtf? i'll look into this

[ellorie]

15 hours ago, jfdes said:

Thanks, I appreciate you responding.

I was under the impression that even with the interest being tax deductible the LOC rate will still be better then government rate + deducting interest, but I will have another look at that. I was also not aware they would suspend payments during residency. If you see this and are able to respond again, could you comment on whether interest accrues during residency?

It depends on the province. Alberta and one (i think) other province gives you interest free status during residency. I paid off my Canada loans with my LOC and left my Alberta ones alone because they won’t be in repayment until I’m done. 

[rmorelan]

21 hours ago, bloh said:

They are government loans. You can put them on hold as long as you're in school/residency if you fill out a form.

I didn't pay them with the LOC (even though LOC % is lower) because the interest is tax deductible.

 

No one will care but this will be my last post on these forums. About a month ago, I suspect Artzin was given a bit too much scutwork on the wards and wanted to take it out on someone by  banning me (for a single innocous post) from posting for an entire month.

There's actually no accountability on these forums as you can't even contact anyone to discuss/appeal (while you are banned)  which leads me to believe this happens way more than anyone knows. It's probably time I move off from these forums anyway.

well wow ok.......I didn't know that, and we will have to look into our systems for doing that sort of thing. It is true we don't have much tracking for that banning - mostly because we ban primarily spammers by a large margin and thus track it is a endless sea of meaningless posts at time. That being said I didn't know there was no way to contact a moderator at least during that phase - which seems to say the least overly restrictive and vulnerable to even simple mouse click errors on our interface.  

There is accountability - which I will now have to go look at - as this is not a dictatorship and so on, and to say the least moderators have to be careful with the powers we are given. 

and I wouldn't say no one would care - I have for one have appreciated your insights over quite sometime. As always I wish you the best in the future!