| Paying down student loans vs investing liquid |
|
|
|
|
|
Mrwesson
New Member
Cash: $ 0.90
Posts: 4
Joined: 21 Feb 2011
|
| Paying down student loans vs investing liquid |
 |
|
I am a dental student and my graduation situation listed below.
~300k in loans ~100k @ 7.9%/128k @ 6.8%/ 32k @4.5%(these are all fixed rates)
125k (paid cash for my townhome) and will be liquidated upon graduation
My employment plan
Public health 2 yr contract dentist 120k yr salary 30k tax free loan repayment bonus(equal to 47k taxable) and can extend up to 6 yrs repayment plan details: 30k for first 2yrs, 3rd year 40k, 4th,5th,6th year 30k with loan forgiveness at the end of 6 years. My plan is to only stay for 3 years max(2yr ideally).
1 yr private practice(to build certain skills) ~130-160k yr salary
3yrs out finally purchase a practice from a retiring dentist(specifics not known) purchase price will be between 250k-500k. Getting a practice loan is almost a sure thing through certain lenders.
option 1 consolidate loans for 25yrs the lowest payment and save/invest my 125k for a down payment on a practice or retirement. Once your practice is successful pay down on the debt x3 or more with a goal of a 10-15yr payoff.
option 2 is to pay down the higher interest debt(100k @ 7.9) with the 125k liquid.
option 3 is to take the public health job + put 100k of the 125k towards loans and live frugally with a goal of a 3-5yr payoff. I should be honest and say after 8yrs of college living extremely frugally wouldn't be desirable and may lead to jumping off a building  .
Thanks in advance for any help
|
Mon Feb 21, 2011 5:18 pm |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
|
I retain the use of low interest, long term loans as long as possible, and I invest my own capital elsewhere. But the consolidation rate would be over 7% - that's a bit high.
So I would probably pay off the $100k with some of the $125k and retain the $200k loans for the full term - no prepayment. In most cases you will make money by directing your income stream to the highest and best use where it is likely to earn well above your 6.5% cost. Either stocks (protected in an SEP?) or a business or both.
And I agree that it is probably better to get out of the loan forgiveness plan early - it 'sounds' like free money but it is usually better to go into the private sector, earn enough extra salary to offset the 'free' money, and advance from there.
There may be times in the next 30 year period where 6.5% capital will look very good - and you will be glad that you retained the use of the $200k.
|
|
Mon Feb 21, 2011 5:40 pm |
|
|
Mrwesson
New Member
Cash: $ 0.90
Posts: 4
Joined: 21 Feb 2011
|
Thanks for the advice.
In public health the starting salary is pretty close to the same private salary in private sector. The potential for salary growth is almost non existent in public health(reason for staying 2 years).
An example starting salary would be 120,000(you can make more in public health) + 30,000 tax free loan repayment which if made from taxable wages = 47k.
167k would be the top tier salary for a 1st year dentist in any sector(average is around 110-120k). 3rd year gets interesting because they offer 40k repayment and with raises accumulated over the 2 previous years may be very competitive as well.
My motivation to go to private practice(associate dentist not owning practice) in year 3 is because in public health you do not experience complex procedures for the most part this experience is well worth a pay cut because you will need this experience before opening your own practice.
|
|
Mon Feb 21, 2011 6:53 pm |
|
|
MrPolarZero
Preferred Member
Cash: $ 31.00
Posts: 150
Joined: 31 Jan 2011
Location: Aliso Viejo, California
|
Well, that seems a rather good foresight. Looking at the details that you have provided here, it would definitely be a good route for you to take.
Annuities
Best Life Insurance
|
|
Tue Feb 22, 2011 4:44 am |
|
|
KatherineLee88
Preferred Member
Cash: $ 22.65
Posts: 112
Joined: 10 Jan 2011
Location: Iowa
|
Dang....
I didn't realize dentists made so much! Now I sort of understand why someone would chose that career path.
But is dentistry school seriously more expensive than medical school!?
Oldguy's advice sounds logical to me. No shame in taking the full term to pay off student loans. I likewise am going to slow down and not "prepay" my student loans and invest some of the money elsewhere such as Roth IRA.
Sounds like you don't want to do the public health thing. I would suggest you maintain whatever sanity you still have left and avoid 2 years in a short-position public health job.
If what is said about dentists is true...
...well, you've been tortured enough as a student, and as a dentist you need to maintain whatever sanity you have for the long-term.
|
|
Tue Feb 22, 2011 7:46 pm |
|
|
Mrwesson
New Member
Cash: $ 0.90
Posts: 4
Joined: 21 Feb 2011
|
Dentistry costs a little more than med school. It was once true that med school drop outs became dentists but it is now much harder to be accepted to dental school because of a growing field and very few schools compared to med school. You also get to practice immediately after dental school while docs have 4yrs undergrad, 4yrs med, 3 yrs residency.
Once you own your own practice 250k is the norm. I know 7 dentists and only one makes 250k and one owns 3 practices and makes about 1.4mil a year. others are closer to 300k yr.
It is hard work but you are not on call like md's and most dentists work 4 days a week and under 40hrs a week.
|
|
Wed Feb 23, 2011 1:39 am |
|
|
MrPolarZero
Preferred Member
Cash: $ 31.00
Posts: 150
Joined: 31 Jan 2011
Location: Aliso Viejo, California
|
From the looks of it, you are now in a rather good position. So I think it would be a good idea to pay off the student debts first.
Annuities
Best Life Insurance
|
|
Wed Feb 23, 2011 5:16 am |
|
|
KatherineLee88
Preferred Member
Cash: $ 22.65
Posts: 112
Joined: 10 Jan 2011
Location: Iowa
|
I guess I have a biased perspective on how many people are entering dentistry since my undergraduate and graduate universities have dentistry programs (University of Minnesota and University of Iowa).
Apparently I'm becoming the wrong type of doctor altogether (PhD)!
Not only do I get to look forwarding to working longer hours than you, I also will get paid less than half that amount if I'm lucky.
But, at least I don't pay for graduate school. 
Honestly, I would just go with whatever option you think will make you happier... so not public health. You'll be making significant bank to cover those loans in no time anyways.
|
|
Wed Feb 23, 2011 10:29 pm |
|
|
Benstoke
Preferred Member
Cash: $ 5.05
Posts: 132
Joined: 22 Nov 2017
|
It’s very excellent information and more real facts to provided that post.Thank you for sharing this information. VMCE_V9 exam questions answers
|
|
Thu Jun 27, 2019 8:59 am |
|
|
Deen888
Senior Member
Cash: $ 41.60
Posts: 203
Joined: 14 Feb 2018
Location: Los Angeles
|
quote:
I am a dental student and my graduation situation listed below.
~300k in loans ~100k @ 7.9%/128k @ 6.8%/ 32k @4.5%(these are all fixed rates)
125k (paid cash for my townhome) and will be liquidated upon graduation
Dentistry had been always extremely expensive, I wouldn't ever afford medical education. Moreover, dental services are pricy, too, I have to investigate information like clearchoice reviews very deeply before going to a certain clinic.
|
|
Fri Aug 13, 2021 7:49 am |
|
|
vaduvala
Senior Member
Cash: $ 130.10
Posts: 665
Joined: 27 Feb 2018
|
Federal student loans are generally the first choice for students because you can get approved regardless of your income or credit, and they offer the same interest rate to every student. Additionally, federal student loans are eligible for repayment plans and assistance programs, such as student loan forgiveness. To be eligible for federal student aid and college financial aid, a student must be making Satisfactory Academic Progress (SAP). This generally consists of maintaining at least a 2.0 GPA on a 4.0 scale (i.e., at least a C average) and passing enough classes with progress toward a degree. Failing a class does not force you to pay back your FAFSA financial aid. ... If you do not make Satisfactory Academic Progress, or SAP, your federal financial aid is at risk of being suspended. You are at higher risk for losing future eligibility if the failed class is crucial to your intended major.
what is a telecom technician? - Fieldengineer
|
|
Thu Nov 18, 2021 4:28 pm |
|
|
|
