Living Large Anyone?

[Guest fyi]

to save you from searching through thestar.com:

 

www.thestar.ca/NASApp/cs/...=News/News

[Guest Carolyn]

Well since we are on it - the original article can be found here:

 

www.thestar.ca/NASApp/cs/...=News/News

 

 

 

Edited to fix the page break. --Ian

[Guest A Friend]

You may have something there.

 

Immaturity of some med students probably has a hand in the rabid overspending some engage in.

 

I'm a first yr meds at UWO and while I think the school is the best and the students in my year on the whole are good, there are some deviations. Could be the dynamics of med school, could be the students, probably both.

 

Remember highschool? spending all of your time with the same 100 or so students each and every day. The situation breeds cliques and different classes, jocks, cool kids, rockers, geeks, each group trying to be different, each looking ridiculous in the process. Med school is like that sort of a regression back to infantile high school (as most of you will find out next year). You spend all of your time with the same group, there tends to be gossip, social classes (if you will) and some strong desires to be admired by the pack. It may play a role in people blowing their scotia lines on cool clothes or a nice pad (to be the envy of the pack, desperation to be cool).

 

The step backward to a high school maturity or immaturity (rather) level is probably b/c most of the people who get into med school never really lived the high school dream of being cool and going to all the good parties and fiitting in. Probably too busy mapping out their master plans for world domination in library. This isn't a UWO phenomenon but exists at every med school because of the arrangement and social history of MOST of the class. No need to be scared though, there are alot of really cool guys/gals in the class to hit the bars with, Jeff comes to mind or uwo2007 (7)cause the way the shitty exams are rolling, I'm just kidding Jeff, I'm sure you'll pass man.

 

So dont get caught up in the whole lets be cool and be the envy of the high school bit, just be an individual and spend smartly. i suspect this whole all the chicks getting engaged awhile back had to do with peer pressure, and fitting in also. Girls dont do it, it really sucks for us single guys in the class, just kidding.

 

Good luck everyone, I'm sure the good news is around the corner.........at the post office! Oh yeah and come to Western!!!

[Guest UWOMED2005]

To be honest. . . I agree with 'a friend' on many of his/her points. I did notice a number of the trends he talked about. . . I might not have worded the exact same way (I think saying "Med school is like that sort of a regression back to infantile high school" is a bit strong) and I disagree with a few of your points, but I did notice some of the things you talk about. People react to getting into medical in many different ways. It is a big change - for many of us, we were in a new unfamiliar city, a new school, and surrounded by (essentially) a total group of strangers. But if you (god this is corny) "just be yourself" you'll do fine.

[Guest Angela]

From reading your posts, I've noticed that you guys are managing your financial situations quite well.

 

During my undergrad, I borrowed osap. While I did my master's, I received some scholarships on top of my stipend so I was able to save some money. My question is this, is it wiser for me to pay off my undergrad loan first, or would it be better to invest the money somewhere while I continue on with school (meds, if I hear good news on Mon.)?

 

Don't worry about giving the "wrong" advice! I just want to hear opinions from others!

 

Thanks,

 

Angela

[Guest UWOMED2005]

Sounds like the other guys might know the details better. . . but you don't have to pay OSAP interest until you're finished school (if it is meds, then at the end of the MD. . . you do have to pay off OSAP in residency.) So if you do get into meds I wouldn't pay the OSAP off just yet (though if you are working next year, pay off the OSAP ASAP. . . my understanding is that the OSAP interest rates are pretty killer!) I'd use those savings to pay your medical training costs above and beyond what you can get from OSAP (at this point, I think borrowing OSAP is still beneficial if you can get it). Alternatively, with the current low interest rates, you could be at an advantage borrowing from a credit line and investing those savings - but I think that could be risky. It's hard to make more money than you spend borrowing, and if the money you invest underperforms or loses money, you could be screwed.

 

mtws - I have read the "millionaire next door" & "the wealthy barber." Excellent books, but then again, I don't really care if I'm ever a millionaire. . . I'd rather live a balanced life, make sure I have enough to retire at a comfortable age (if you enjoy your career, why retire just to sit around the house all day?) and just make sure I don't get into too much debt.

[Guest AniyaSG]

My boss and her husband kept their student loans rather than consolidating them in a lower interest bank loan. Apparently there are some nice tax breaks on student debts which can be more advantageous than the lower interest rates...

[Guest Beaver]

There is a myth that keeping your OSAP loan is a good thing, its not really. The tax break you're thinking about is a 25% deduction of the interest paid you pay on your loan on your income tax. So if you had a loan of 30,000 and the interst rate on the loan was 11% then your total interest payment would be 11%*30,000=3300 and the amount you could deduct from tax would be .25*3300= 825.00. So your net interest payment is 3300-825=$2475 for the year. and your net interest rate is 11- .25(11) = 8.25% on the loan. If you can get another loan from the bank at say 6% then you are obviously paying less interest and that's better because you are paying less. Don't let the meager tax incentive suck you in, always look at the net effect on the interesy rate.

 

To answer your question about whether or not to pay off student loan first. Here's the answer: If you go back to school fulltime, ie med school than the govt wont charge you interest on your loan, thats like having free money so in that case take your scholarship money and invest it into something really safe even at a lower interest rate, ie. money market fund giving about 4-5%. That way its a win win, you dont have to pay interest on your student loan, and you are making money through investments. When you are finished school you can pull the money out and pay down your osap within six months of graduating as the interest on the loan doesn't kick in until then.

 

Now to decide whether to pay a loan or invest money the rule of thumb is if the rate of return on the investment is > the rate of interest on the loan keep the investment and dont pay the loan off. An example is if you have a mutual fund earning 12% per year and a loan after the tax break of 8%, then the money is better off in the mutual fund, generating an income of 4% profit after paying the interest on the loan.

 

Any more questions feel free to ask, I know this stuff is confusing, but it took me awhile to wrap my head around it.

[Guest mtws]

Couple points,

 

My opinion. There are only two kinds of 'good debt': Student loans and Mortgages. All others, for me, fall under 'bad debt' and should be payed off ASAP. Now, student loan debt, once you're out in the work force, should also be made a priority to reduce to zero, but while it is 'interest free' - save it. Put it somewhere where you're earning interest on it.

 

E.g. Property tax. Most banks give you the choice of linking your property tax to your mortgage payment. They say, you just give us a few extra bucks each month (equivalent to your tax bill) and we'll pay your taxes for you. WHY? So that they can earn interest on your money all year and then pay the tax man for you at the end of the year.

 

What you should do is open a Money Market fund and deposit your monthly tax bill there - at the end of the year withdraw enough to pay your taxes and keep the interest. A really disciplined person could do the same with income tax!!!

M

[Guest Beaver]

Sorry i noticed I mispelled interest 12 times 12 different ways. Sorry I'm a mule.....wherever you see something that remotely resembles interest it's probably that word

 

thanks

[Guest Angela]

Just one more question - what is a money market fund? By the way, where do the monthly tax bills come from?

 

I want to thank Matt especially since I know he's under a lot of stress right now, waiting for that darn email to come from Ottawa. There's still lots of time.

 

Good luck,

 

Angela

[Guest mtws]

Angela,

Thank you. And you're quite welcome. Sure would like to get an acceptance letter from Ottawa though (and now that I'm not so sure of Ottawa, Toronto is looking pretty darn good).

 

The tax bill I was referring to comes from the city. Municipal property tax (pays for all the city living amenities, e.g. water piplines, sewage, garbage man, school boards - even building inspections - you should look into what your city taxes pay for its really quite eye opening.) You only pay it if you own property in the city.

 

A money Market fund is an extremely low risk mutual fund that invests it's assets in stable 'money equivelant' investments (like gauranteed investments and T-bills). That's where I keep my family emergency fund - they generally earn about 3-5% interest (much better than the 0.25% that a savings account makes).

 

Did you get in? Congratulations or Good luck (whichever applies or both).

Matt

[Guest billyb]

another option besides a money market fund is a high-yield savings account (like the one offered by president's choice (PC) financial). This currently pays 2% (which is about the same as current money market yields) and it normally fluctuates to stay a bit higher than the fund rates. The bonus is that this money is accessible--so you can earn a bit of interest on all your extra cash, until you need to pay the rent (or your tuition!).

The other great thing about PC financial is that they have no service fees for any of your normal banking transactions, good service, and you can earn lots of points to buy free groceries (yeah--free food). These things really add up...over the course of a couple of years, I've earned probably $500 in free groceries, a lot more interest than a normal savings account, and saved a ton in service charges.

And no...i don't work for PC financial, I'm just a (very) satisfied customer. Check it out!

[Guest TimmyMax]

Hey,

 

I concur with billyb- PC Bank is the way to go! Free groceries are never a bad thing, especially when the balance in accounts receivable dwindles...

 

Best of luck!

Timmy

[Guest Ian Wong]

Floating back to the top.

 

Ian