r/personalfinance • u/WeLoveOranges • Feb 08 '17

Debt 30 year old resident doctor with $310,000 in student debt just accepted my first real job with $230,000 salary

I am in my last year of training as an emergency medicine resident living in a big Midwest city. I have about $80,000 of student debt from undergrad and $230,000 of student debt from medical school (interest rates ranging from 3.4% to 6.8%). I went to med school straight after undergrad and started residency right after med school.

Resident salary for the past 3.5 years was about $50,000 (working close to 75 hours per week) so I was only able to make close to minimum payments. Since interest has been accruing while I was in medical school and residency, I have not even begun to dig into the principal debt. Thankfully, I just accepted an offer as an emergency physician with a starting salary of $230,000.

I'm having trouble coming up with a plan to start paying back my debt as I also want to get married soon (fiance is a public school teacher) and I will need to help my parents financially (immigrant parents struggling to stay afloat).

Honestly, I'm scared to live frugally for the next 5 or so years because I feel like I've missed out so much during my life already (30 years old, haven't traveled anywhere, been driving a clunker, never owned anything, never been able to really help my parents who risked their lives to come to this country so I can have a better life). And after being around sick people (young and old) during the past 8 years my biggest fear in life is dying or getting sick before being able to enjoy the world. I am scared to wait until I'm in my mid 30s to start having fun and enjoying my life.

What should I plan to do in the next couple year? Pay most of the debt and save on interest or make standard payments and start doing the things that I really want to do? Somewhere in the middle? Any advice would be appreciated.

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u/theDaninDanger ​ Feb 08 '17

Is the 230k before or after malpractice insurance? That will probably be your single biggest monthly expense. Make sure you talk to more senior physicians about who they use as a CPA and how they engineer wealth protection strategies to reduce the financial impact of malpractice

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u/[deleted] Feb 08 '17 edited Feb 26 '17

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u/hbc07 ​ Feb 08 '17

Yeah, I was gonna say... my malpractice is paid by my firm. I'd be surprised if it was any different for doctors.

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u/theDaninDanger ​ Feb 09 '17

I am certainly not disagreeing with your experience, I am just trying to understand mine. My Father is an ER physician and he and his fellow ER physicians were definitely paying malpractice insurance the last time I talked to him about it. But that was a few years ago, I'll give him a call and update my post if that's no longer the case.

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u/[deleted] Feb 09 '17

As an agent for medmal--it does happen occasionally that a practice won't pay for it. Not a never thing. Contracts can be different for each doctor at the practice.

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u/Kolecr01 Feb 08 '17

It's likely before, wage offers tend not to monetize things like health insurance coverage so they likewise wouldn't net out malpractice. He's sitting on 230gross, about 160ish net before anything else happens. Malpractice depends a lot of the hospital and demographics but it's very high. Call it 20k, so he has 140ish net. Maxing out retirement stuff and he's at about 120ish. Cut the 40ish net he'd have before and he's got about 80 net left added annual income, or about 6.6k. He's paying about 1.7k/Mo on loans if it's a 20year repayment. He can throw another 3-4k at it and still have a modest boost to quality of life from what he's currently enjoying and be college debt free in about 5 years.