Studying medicine in the United States comes with some serious debt. Sometimes this debt can even be crippling. You would think that with years of studying and training, doctors would be living in the lap of luxury afterward. Because of the massive debt, this can be the furthest thing from the truth for some docs.
After residency, I made it my mission to not let my debt control the rest of my life. Within 14 months, I was able to bring my negative $150,000 net worth back to $0. Yes, technically I was broke, but the freedom of not having this debt over my head was massively empowering. It allowed me to pursue opportunities that I otherwise would have been to afraid to. Here are 5 things I have learned along the way.
After residency, I made it my mission to not let my debt control the rest of my life. Click To Tweet
Track Your Networth
It’s super important to know your net worth. You could have a million dollars worth of assets, but if you have a million dollars of debt, you are broke. By knowing where you stand you will be able to start attacking the problem and increasing your net worth.
Keep A Budget
Similar to knowing your net worth, knowing what you spend your money on is equally as important. You would be surprised at how much you might be spending on frivolous things. Keeping a budget each month will make sure you are living within your means and that you will always have money set aside for investing.
“It’s super important to know your net worth. You could have a million dollars worth of assets, but if you have a million dollars of debt, you are broke.”
Investing my money early on has been vital in creating wealth. Investing is not a get-rich-quick scheme. Good investments take time to build and utilize the concept of compound interest. The earlier you start, the better off you will be in the long run.
Watch Out For Lifestyle Creep
It’s natural to feel like we are entitled to that million-dollar mansion, a new sports car, or a fancy vacation. After all, we did work hard to get here. That said, just know that each luxury purchase can have devastating consequences to our long-term wealth goals. Ask yourself “is this depreciating luxury SUV really worth delaying my financial freedom?”
Consider Building Other Sources of Income
Lastly, once you have your expenses under control, look for ways to increase your income. Doing so can greatly speed up your journey. Medical writing, consulting, legal work, or other side incomes can bring in substantial capital to invest.