Don’t Catch Doc-Itis
Derrick has an amazing opportunity in front of him. Will he maximize it or fall into a common trap?
QUESTION: Derrick is a resident physician with $250,000 in student loan debt. Next year, he’ll increase his income from $40,000 to about $400,000. He has no retirement savings and only the student loan at 3.5% interest. He wants to save for retirement and buying a house before attacking the low-interest student loan. Dave disagrees and explains.
ANSWER: I’m thrilled that you will make that much, but I’ve met doctors 20 years older than you still trying to win with money by playing math games. You’ve done great to become a doctor and paid a price to make this kind of money, but doctors often get doc-itis. They hold their breath for so long while they go to school, then go out and lease 2 cars and buy a huge house. Keep living on nothing and get rid of this student loan in 2 years. You’re used to living small, so keep doing it.