My DebtJournal out of 100K of Undergrad Loans

New! Use this space to post your goals, accomplishments, and setbacks on your path to get rich slowly. Others can read about your situation, and provide critiques and motivation. Look here to find somebody who has experienced a situation similar to yours!

Moderators: lvergon, Fiscal Fitness Moderator

Sam
Posts: 1109
Joined: Sun Apr 29, 2007 8:11 am
Location: Sunny Florida
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby Sam » Fri Jun 08, 2012 5:48 am

I wanted to ask today for a boost from folks who can tell me that I will succeed in escaping this debt if I stick to my plan, work hard, and increase my income. I can do this. We all can do this if we put our minds to it.


Hi there, you can do it. I had my professional school loans paid off in 5 years. Here is the link to my networthiq, started paying off the loans in 1999 was done by April 2004. https://www.networthiq.com/people/tddks

Then after Mr. Sam and I got married, in 2007, we paid of $55,000 in debt, $27,000 of that was his student loans from his MBA. We killed that debt in just over a year. If you search for it there is an old Fiscal Fitness journal on here that documents that journey.

Our combined net worth is now $1 Million+ and we are debt free, and we really have been debt free since February 2008, except for our mortgage debt.
Sam

http://adventures-of-sam.blogspot.com
(Follow Sam's financial and real estate adventures.)

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Fri Jun 08, 2012 1:23 pm

Thanks so much, Sam. What an inspirational story.

A lot of my friends have told me that they are not even worrying about their loans yet. They say that I am ahead of the curve. I feel like I have to be with this much debt!

Because I am getting a PhD, and therefore I could potentially end up in the public sector as a professor, I'm wondering if I should start saving more and go for Loan Forgiveness after paying for 10 years.

http://studentaid.ed.gov/PORTALSWebApp/ ... sh/PSF.jsp

It's a really tough call, because I can't be guaranteed that I will end up in a public service job.

I'm thinking the wisest thing to do is to keep on paying down the debt while I'm getting my PhD... keep on taking on public loans to pay off private loans, and if I DO end up in a job where I can do loan forgiveness, then I work with the loan companies and my current income to pay as little as possible for 10 years straight, and invest the rest of my income.

I would like feedback on this plan.

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Fri Jun 08, 2012 11:33 pm

Sam I just looked again at your profile, and I have to say that it's really really inspirational to see someone's net worth jump so high. I really hope that if I can be debt free by 30, then I can push all the rest of my savings to intelligent investments and strike the million mark in my 30's as well. I think I need to find a way to turn my PhD into a more lucrative career than university professor...

So many choices and things about my past that I wish I could change, but alas, there is no going back in time!

Sam
Posts: 1109
Joined: Sun Apr 29, 2007 8:11 am
Location: Sunny Florida
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby Sam » Tue Jun 12, 2012 4:56 am

You can do it!

I would say that there are four keys to our success over a short period of time.

First, we hate debt. We do just about everything we can do to avoid debt. We don't use credit cards, we save up for larger purchases and we spend present dollars on present needs rather than future dollars (i.e. credit cards). Sometimes its annoying and frustrating to plan ahead all the time or to run out of cash (we run out because we limit ourselves via an allowance system).

Second, I married someone who was game to living differently than our peers. Since we got married and paid off our unsecured debt back in 2007 we have, every year, worked hard together on our personal finance goals. We are generally on the same page when it comes to money. I can't imagine being married to someone who wasn't on board with family plan for money.

Third, live beneath your means. We have a great historic home in a quirky neighborhood. Our peers are now upgrading to McMansions. Yes its a great to buy a home in Florida, but bigger home means higher utility costs, more furniture to buy and richer neighbors to keep up with. We have no plans to sell our home until we retire. We each drive paid for cars, our peers generally drive luxury leased cars. I am on the only person in my book club that doesn't have a cleaning service.

Fourth, front of mind. We keep our finances in the front of our mind a variety of ways. One, I blog and post which keeps me focused on finances. Two, I maintain a networth iq profile. Three, twice a month I update our excel spreadsheet regarding our 2012 savings goals. Four, we have rules that keep us from spending too much, $100 rule, the $300 rule and our allowance. Said another way, we are regularly checking in our finances so spending, which we try to keep flat from year to year, and our savings, which we try to grow a little each year.
Sam

http://adventures-of-sam.blogspot.com
(Follow Sam's financial and real estate adventures.)

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Tue Jun 12, 2012 5:12 pm

Sam,
Did you meet your partner while you were in debt? Perhaps this is me throwing too much guilt onto myself, but I can't imagine dating and finding a partner with this much debt over my head. Perhaps it's a silly, "macho" thing that I have constructed, but I just don't know how to tell someone "you're really cool, PS: I'm 100K in the hole!"

And what is your major investments? Does most of your money come from simply saving income, or do you purchase real estate? While climbing out of debt it wouldn't be bad for me to take up a side hobby of learning how to invest, so when I get the money, I can actually do it... advice on this front?
Thanks!

nossorc
Posts: 172
Joined: Wed Nov 12, 2008 9:47 am
Location: FL
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby nossorc » Wed Jun 13, 2012 8:18 am

You can do it, just takes dedication and you seem to have it. I graduated in 2009 with $73,625 in student loans. Started paying them back after grace in October 2009. In about 32 months I have paid off $18,200 while saving $20k+ for retirement and buying a house (duplex, my first, of hopefully many, rental income properties).

If I stick to my currently plan, of increasing payments by 100 dollars every month (up to 2k/mo), I'll be done in Jan 2015, 4.5+ years ahead of schedule.

Just remember every little bit counts and that the $500 for the iPad can wait. My biggest motivator is thinking about what I'll do with the 1,100 a month (my current amount I'm paying) after these horrid things are gone. It'll be a lot of fun!!

I look forward to following your progress, student loan triumphs are why I roam these forums.

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Wed Jun 13, 2012 11:12 am

My plan right now is simple, slowly build emergency while paying off private student loans. I'm also taking out a ton of money every year in federal loans to pay off the private loans. Ideally I could eventually get to the point where I can consolidate those federal loans at a low enough rate where I can just pay the minimum and invest the rest.

I really appreciate the encouragement and support.

Why did you save for a house instead of just paying off debt nossorc?

nossorc
Posts: 172
Joined: Wed Nov 12, 2008 9:47 am
Location: FL
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby nossorc » Wed Jun 13, 2012 6:11 pm

Real estate landlording and long term capital appreciation has been a long time life goal of mine, I hope to be doing it full-time as my job within 15 years. This situation kind of fell into my lap.

It is a 2 unit duplex. 3br/3br. For $180k, mortgage, taxes and insurance will come out to around $1,300 a month. In my area, I am able to charge $600 per room. So I am taking my rent from $800 to $100/mo and building equity. I now have $700 extra to put toward loans and to save up for my next rental property.

In addition to all the reasons above, I rate locked at 3.375% for 30 years, with 2.5% points toward closing costs on an FHA loan that only required 3.5% down. There really was no excuse not to make this purchase.

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Thu Jun 14, 2012 12:58 pm

How did you gain the knowledge to do this... A lot of what you said is a foreign language. Can you recommend a good book or two?

Is it really simply about learning how to do it, looking for appropriate property, and then carefully purchasing?

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Thu Jun 14, 2012 11:22 pm

OK. I need some serious advice and perspective on a potentially MASSIVE opportunity!!!

I had drinks with a friend of a friend tonight who works for a company that pays him in the upper 70k range. He got this job straight out of his undergrad. He is making nearly 2.5 times what I make while I am working on my PhD. He is making 10k more than my projected salary as an assistant professor. His company is hiring and he thinks I have a great shot at getting the job. He said he would totally refer me (he gets a good chunk of change for doing that). The job involves a lot of travel and it's apparently 80 hours per week. Not many people make it for more than a couple of years... but it's 2.5 times what I am making... and to be honest getting a PhD isn't exactly an easy job, AT ALL.

He mentioned that many people leave this job and work as consultants making twice as much and working half the hours in only a few years...

They paid for his travel for interviews, his moving expenses, and his travel. He admitted it's a lot of work, but he does not hate his life at all. The company is located in a nice city with a good number of people. I like the city a lot, much more than I like my current city.

I want to apply, see if I get the job, and potentially leave my program. The job is also casual dress, so there is no need to buy expensive clothes or show off in any way...

My problem is that all of my loans are split... government and private loans, across many different loans. So I would be paying a lot of interest every month for each loan. I can't consolidate my private loans through the current loan company, and I am not sure if I can consolidate them any other way... advice on this would be great.
Essentially, all of my loans total about 100K, and I would be making 70K... is there a chance I wouldn't be able to pay them?

The dream in my mind right now is to:
1) Find a way to consolidate my loans and make payments as small as possible
2) Apply for this job discreetly and interview discreetly without my advisor knowing
3) If I get the job, take it
4) Break my advisors heart (I'm just about to start my second year here... better sooner than later!)
5) Move to the new city on the companies dime, find the cheapest place I can to live, and work my ass off to pay back my loans in half the time
6) Save save save save save and never be in debt ever again

Am I being naive here??!!... this opportunity seems too good to be true, but "feels" so right if that makes any sense at all...

The biggest road block right now is the part where I have to figure out how to consolidate these private loans... or maybe I don't even have too? As long as the interest payments collectively leave me with enough income that I could still pay a bunch of principle on the highest rate loans?

I know this was long, but advice! Please!

fantasma
Posts: 962
Joined: Wed Oct 07, 2009 4:16 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby fantasma » Fri Jun 15, 2012 1:02 pm

Go for it. Don't worry about the things you can't control and even focus on the what ifs.

Apply and see what happens.
Be what you want to attract.

nossorc
Posts: 172
Joined: Wed Nov 12, 2008 9:47 am
Location: FL
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby nossorc » Fri Jun 15, 2012 1:03 pm

I was fortunate, grew up with pretty open, financially sound parents. My mom is a CPA and has been managing renting out our beach house for almost 15 years now during the summers. Watching the success they have had with the situation has sent me in that direction. I am not sure about books, but I think what you said the root, identifying bargains in desirable locations. Any rental has to cash flow (produce more than it costs) or it will be struggle.

As far as this job, seems to me like you're asking the wrong questions. Rather than looking at the 70k, look at...will you like the work? more than what you would be doing with your Phd? I mean 70k is great, but it worries me that you state most only last 2-3 years in the position. So say you work there for 3 years, and like many, you hate it. Then what? Now you're still in debt, hate your job and have no where to go.

I mean I'm sorry, 70k for 80 hour weeks...sounds like the Big 4, thats a sucker game if you ask me. Works out to 17 bucks an hour, high school grad pay.

I'd do a lot more evaluating before jumping off the path you're on.

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Fri Jun 15, 2012 2:55 pm

Nossorc, I agree I can't make a hasty decision here...

When I think critically...
The job is in a better city for me, and is driving distance to Chicago, an even bigger and better city for me. The overall money is much better. PhD is a lot of hours per week, perhaps not 80, but a lot. The job is in the medical field, so it's not going anywhere. Medicine and healthcare will always be necessary. I have a background that suits the position very well. I don't doubt that I could get a job if I really worked hard. Many folks put in there 2 to 3 years and then become consultants making 140K (said my friend). Many go back to medical school or do something else. He's been at it for 2 years and he says it's a lot of work, but he loves it and overall loves his life. I have no family to commit to, I'm young, and the idea of lots of travel is exciting.

Also, the field that I am in now, getting this PhD sets me up for a job as an academic at 60 to 70K if I'm lucky, with little room for growth, and that's in 4 years. Academics work A LOT too, and the results are less tangible sometimes. I've had faculty say that they pull 60 hour weeks frequently. There is no guarantee on location. Jobs are sparse, and even talking about taking a job in a different field generates doubt and fear in your "character" as an academic.

It's a lot to think about... When I ask myself what I want in my life, I simply want to help people, see tangible results from my work, be financially sound and decently wealthy, and build meaningful relationships. I can do that in many fields.

chasingthegoodlife
Posts: 50
Joined: Fri Nov 25, 2011 1:06 am
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby chasingthegoodlife » Fri Jun 15, 2012 5:06 pm

If you leave your PHD program now, will you have the option to return with any sort of credit or advanced standing if you change your mind down the track?

It sounds like there are a lot of appealing aspects to this new job (pay, city, opportunity to travel) but I would also consider why you are now so eager to make this change, when only a few weeks ago you seemed firmly committed to finishing your program?

DebtGrad64
Posts: 67
Joined: Mon May 14, 2012 7:40 pm
Contact:

Re: My DebtJournal out of 100K of Undergrad Loans

Postby DebtGrad64 » Fri Jun 15, 2012 5:17 pm

I'm eager to make the change to get out of debt more quickly, and the more I read about academia and being a professor, the less appealing it seems to me. I've always liked the idea of consulting, and this job could lead me in that direction. I also have an excellent resume coming out of my undergrad, but those experiences are only getting older and older the longer that I stay inside this program getting my degree. I don't want to be trapped down the road, to be honest, in the ivory tower.

I found reviews online of this company, and they are pretty much all the same. You work a ton, travel a ton, pay is great, but work is exhausting. Part of me says "do it for 3 years to get out of debt and build some savings, then re-evaluate."

I'm young... I could do this and just work my butt off.

One commenter said he works 55 hours a week but he is extremely organized, so it helps him. Nonetheless I am going to give this time to sink in, settle, and think. In the meantime I plan to keep working my ass off in grad school. I don't want to fall behind dreaming of a different future.


Return to “Fiscal Fitness Journals”

Who is online

Users browsing this forum: No registered users