Budgeting, Personal finance

After The Medical Studies—Live A Limitless Life On A Limited Budget

Medicine is a lucrative industry and a career choice that is often characterized by strong financial advantage. This is necessary because the cost of medical studies that get you in a position of professional sustainability is high. Many budding medical professionals enter the field with substantial debt on their shoulders. The key to unlimited living comes in overcoming what would otherwise act in a way that limits you.

The first thing you’re going to want to do is to sit down and construct a budget. You need to know how much you owe, how long you have to pay it back, what kind of income you have, and what you need to reach the proper ratio of income to debt payout. Such information will help you identify the most reasonably expedient way to get from your present state to a secure, free point.

A Strategic Approach

To be truly unencumbered requires preparation. The old adage applies here: you get out what you put in. Your best bet is to concentrate all your energy on getting to the point where what you bring in overcomes what must go out. To that end, you should discipline yourself to foster resources closely.

Live very simply. Prepare your own meals. Bring a gallon thermos of coffee instead of hitting Starbucks every morning. Avoid fast food and trips to the snack bar. Buy candy in bulk. Bring everything you need with you. Cut out the purchase of spurious magazines and songs on the internet. Restrict playing of expensive mobile games. Take your friends out by the lake, instead of restaurants. Breath fresh air. It’ll do you good.

Buy a fuel-efficient used car to avoid having a car payment. You can get one that will last around five years for around $5k, if you search studiously enough. Maintenance will be around $1k yearly if you’re careful. Ride your bike to avoid excess fuel expenditure.

Avoid partying excessively. You need to have recreation every now and again. You’re not a machine. But there’s a time to power through your situation, and a time to relax and let loose. You’ll enjoy yourself better if you let loose at the end of a long accomplishment, rather than making this a facet of daily life. You’ll save money by suspending this release as well.

Real Estate Considerations

Now a mortgage is a good idea, but it can ultimately be expensive if you’re on your own. Consider this: if you rent, you don’t get anything back at the end. Additionally, it’s probably not legal for you to sublet. If you own, you get something back if and when you sell the property. Also, you can sublet.

Consider this: you’re going to be out about $500 a month, minimum, for an apartment.  You could do a long-term mortgage for around that much, but it’s going to take you a long time to get from your debt-shadowed present situation to debt-free blue skies. The point is, however you slice it, you’re going to be out a minimum of $500 a month for a roof over your head—unless you use some derivative strategies.

For this to work the best, you may want to be unencumbered by serious interpersonal relationship. Or not—it depends on you. In any event: you might mortgage a property that you can rent out to multiple roommates. Depending on the property, you can charge a certain rate.

In one scenario, you may have a property worth $250k with room for four to live with you, because you can partition the basement; or there’s an apartment over the garage—something of the like. Now at $4,200 a month, or thereabouts, you can get that house paid off in five years. Adjust it for interest and call it six or seven years—sometimes a payment may not come in on time.

A Possibly Convenient Scenario

Room with professionals you’ve associated with who are in a similar position to you, and can afford such a solution. You’ll each pay about $840 a month. If you own the property and are the landlord, you’re getting your property paid off for about what you’d pay for middle-end rent anyway.


Now your medical degree is going to cost you around $300k, maybe $200k; depending. It’s also going to take you a few years to complete. You might start on this plan while you’re still in college if that’s possible. If not, you can wait until you’ve started to draw income and go from there.

If your cost of living is only $840 a month, you can add food, gas, utilities, incidentals, and emergency funds on top of that and call the cost of living $1,800, minimum—with that you can squirrel away at least $100 or $200 a month. Now: the rest should go to your student loans, etc. If you can pull in $3,600 a month, you can pay half toward student loans—that’s a reasonable expectation in the medical profession.

At that rate, it would take you between 13 and 20 years, depending on interest arrangements, to pay back a $300k medical degree. But you would own the property six to seven years before that if you sublet in accordance with the previous suggestion.

So what you do is pay off your medical degree while you split up your mortgage (and switch out renters; keep in mind that may be a need), and live as frugally as humanly possible. Within six or seven years your mortgage is paid off, and you sell the property.

Escaping Debt

You throw the sale of the property at your student loans—suddenly, you’re financially independent and have a few dozen grand on your side; enough to start a new mortgage, or do something else. You can maintain your job at whatever medical institution you’ve chosen, or you can do something entirely different. You’re financially liberated.

 

Now you can have the designer coffees and eat out every night. You can hit up the parties every now and again, and maybe get a nice car or two. Consider this: if you start your collegiate studies at the age of 18, finish them at 24 with $300k in college debt, and start this real estate scheme as you start your medical career, by 30 or 31 you can be debt free and set. Spend two years making $3,600 a month and continuing to live frugally in your new home and save enough to travel, vacation—take a few years’ sabbatical. Find a partner for life, settle down and have what control you can in your future.

The Bigger Picture

Here’s a kitschy analogy to help illustrate what can be an attainable reality. You know Lucky Charms? It’s the cereal with the marshmallows. There’s three main ways to eat it. You can eat the sugar cereal and the freeze-dried marshmallows together, you can hunt down all the marshmallows and be stuck with cereal you’ve got to eat plain, or you can eat all your cereal first and be left with a bowl full of marshmallow goodness. Life is similar.

You can coast along aimlessly and have small periods of freedom juxtaposed with constraint, you can get yourself in debt, have your goodies up front, and have drudgery to plague you perpetually years after, or you can get the bad stuff out of the way first and coast on through the good. It’s up to you—with a medical degree, you’ve got some real latitude. It just requires a little personal discipline and strategy.

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December 4, 2017