Issue link: http://viewer.e-digitaledition.com/i/520722
I recently noted to a young physi- cia n couple t h at h ad a $ 450,0 0 0 mor tgage a nd a student loa n debt totaling $375,000 that they really had the equivalent of two mortgages. Two mortgages for many couples — even those at later stages in life and more settled in their careers — can be a sub- stantial burden. I encouraged the young couple to view their "second mortgage" (the student debt) like an investment in their biggest asset — themselves. They had both sacrificed many years in medical school, and in doing so, had put themselves in a position to generate really great incomes for the rest of their lives. Investing and saving for retirement had to be delayed while they focused instead on repaying their debt obligations, knowing that their incomes would continue to accelerate into the future. The First Step While all student loan borrowers have options for loan repayment plans, high income-earning physicians are special cases with specific needs and, in many cases, extra high balances to deal with. The first step in mapping out a debt repayment plan is to obtain a detailed loan inventory. Often, young physicians have been so busy completing school that they don't know exactly what amount of debt they really have. They generally know the approximate amount By Bill Strand, Founder and Principal of Paradigm: Strategies in Wealth Management A NEW +++++++++++++++++++++++++++++ + +++ + +++ +++++++++++++++++++++++++++++ WEALTH MANAGEMENT ❯ T HESE DAYS, MANY graduate from college with student loan debt. During the past six years, I've seen many young physicians struggle to repay student loan debt even with relatively high incomes. Most young physicians I work with have, or will have, six figure incomes, but they also have six figure debt loads. I've seen situations where student loan debt is as high as $500,000. I often see doctors in their late 30's still carr ying substantial education debt. At this point in their lives, they should be maxing out retirement plans, saving for their kids' college tuitions and looking to pay off their home mortgages faster. The added burden of student debt might not prevent them from accomplishing their financial goals, but it certainly keeps them from making faster progress. Physicians don't always understand why it is so difficult to begin saving and investing for the goals they delayed while in school. W it h a mor t g a ge a nd student debt, monthly pay ments ca n be a huge burden. Prescription for Student Debt Relief