Getting Real About My Dental School Loans and My Aggressive Loan Repayment Strategy (I OWE $600K)

0:00 What's going on everybody? My name is Dr. Eli DMD and welcome or welcome back to my YouTube channel. If you're new to the channel, my name is Dr. Eli. I'm a recent graduate of Boston University Henry N. Goldman School of Dental Medicine and an incoming orthodontics resident. On this channel, I make videos about my life, my journey through dental school, my journey through residency, etc. So, if that's something you are interested in, please make sure you subscribe, like the videos, comment under the videos, etc. Now, I wanted to make a quick video about dental school debt and dental school loans, especially getting transparent about my loans and what my situation may very well look like when I graduate residency. Right. Obviously, dental school loans and dental school debt is the hot topic right now. The cost of dental school is

0:47 increasing and I think a lot of people are concerned about the future of dentistry and whether the investment of going into dentistry is worth it. I spent a little bit of time going through chat GBT, crunching some numbers, and just trying to figure out, you know, what's a realistic situation for me and my student loan debt repayment situation, especially coming out of residency where I'll probably be looking at $900,000, if not more, in student loan debt. So, I spent a little bit of time going through chat GPT and just trying to figure out, you know, realistic debt repayment situations. And I kind of tried to figure out different situations for general dentists, specialists, etc. And I'm just here to try to kind of ease your mind at thinking about debt. And in

1:34 general, I am going to go through this video going through two situations of which debt repayment would look like for a general dentist and an orthodontist. Let's get to it. So, originally I was making a Tik Tok about this and I intended for it to be like a Instagram real and a YouTube short. However, I'm editing it right now and I'm already at 4 minutes and 31 seconds and the limit for YouTube shorts is 3 minutes. So, I figured I might as well just make a whole video now. And the short version will be on TikTok and I might post it on Instagram as well. So, I'm going to go through the general dentist situation first, and then I'll go through the orthodontist situation, and I'll pretty much throw in what my loan repayment

2:19 strategy is possibly going to look like, what I'm considering at the moment. Right? So, let's start with a general dentist graduating dental school with $500,000 of student loan debt. I chose to use the number 500,000 because I think this is a good average number for dental school students. And of course, there's different things that play factors into this. For example, going to a public school versus a private school, instate versus out of state, whatever. But I'm going to use $500,000 for my example. So, let's start with some basic numbers of what I plugged into chat GPT, right? If you have $500,000 of student loan debt and it's at a 7% interest rate, in order to pay off this loan in

3:05 10 years, you would have to pay $5,800 per month towards this loan. I think the real number was around like $5,85. I don't know. I'll pop it into the bottom of this video. But yes, about that much money right now. I think a fair salary to put for a general dentist before taxes is $200,000. So, let's take the state of Texas for example. I know this is not realistic for a lot of people, especially because Texas has no state income tax, but let's say you're working in the state of Texas and you're making $200,000 as your gross income. After taxes, you can expect to take home about $147,000 per year.

3:52 $147,000 per year equates to about $12,000 and $12,800 per month or something like that. Let me look exactly at the number that I found. So, the numbers that Chat GPT gave me was $147,000 as a take-home salary, which would equate to about $12,384 per month. Right now, say you're trying to pay your loan off in 10 years. You're making the payment every month for 10 years, which is 120 payments. You would have to pay with a 7% interest rate $5,85 per month. This would leave you with about $6,500 per month for your rent, utilities, bills, whatever you got

4:37 going on. Right now, before I get into the rest of the video, I want to preface the video by saying this. I know everybody has a different attitude towards money. However, generally speaking, if you got into dentistry for the money, you may not be happy with this salary, which is fine. I understand. However, for someone like me, I would do dentistry for free if I didn't have so many student loans. Okay? That's how much I love dentistry. Okay? Now, say you're making this $6,500 a month after taxes, after paying your student loan bills. You are making pretty much a salary of $78,000 a year, which for us as students, that's a lot more money than we've ever seen. And for

5:23 the average American, that's good money. If you're living by a budget, living within your means, not trying to flex for the internet or for your friends, if you don't care about being that super rich doctor friend, I mean, your apartment shouldn't be more than 2500, $3,000 a year, and that'll give you a nice apartment. Sorry, a month. 2500 to 3,000 a month. That'll give you a nice apartment. Think about driving a okay car for the years while you're paying off your loans. not that Gwagon or whatever it might be. You don't got to flex. You don't. I think this is a realistic situation for a general dentist. $500,000 of student loan debt, $200,000 of a gross

6:09 salary, 10 years of living with $78,000 a year after taxes. You're you're doing all right and you're keeping up with most of your peers. Now, I know if you looked in the thumbnail of this video, you saw how much money I owe in student loans already just graduating dental school. Right now, I'm going to an orthodontic program where you have to pay. Most orthodontic programs you have to pay tuition to attend, right? So, I'm going to just round up. I'm probably after, you know, interest is going to acrue during the two years of my ortho residency, etc. Let's round up and just say I will owe $900,000 in student loan debt after residency. Okay, so remember this number,

6:54 $900,000. So, you know, I'm doing all right for myself. My credit score is pretty good. It took a hit while I was in dental school, but it's still not horrible. I still have time to build it back up while I'm in residency. I have a few things in mind that are going to help me eliminate my other debt, like credit card debt, etc. while I'm in residency. And um yeah, let's say that I come out of residency with the opportunity to refinance my $900,000 in student loans at a 5% interest rate. Is that wishful thinking? I don't think that's Is that wishful thinking? Whatever. We're going to we're going to say that's what's going to happen for the purposes of this video. Right now, if I had $900,000 in student loan debt and I wanted to and I had a 5% interest

7:42 rate after I refinanced my student loans to pay that off completely in 10 years, I would have to pay $9,545 per month. Okay, so almost $10,000 a month in student loan payments. Again, it's a lot of money, right? But as a specialist, you're investing in yourself, right? So, I know people coming out of orthodontic residency, these are real numbers I've received from real people that are getting offers out of orthodontic residency for $500,000, for $600,000. So, for the purpose of this video, we're going to use $500,000, okay? And we're still going to stay within the state of Texas. So, once again, I plug these numbers in the chat

8:27 GPT. I'll put the exact prompt that they gave me on the screen. But if I was to be offered a gross income of $500,000 in the state of Texas, I can expect to take home about $340,000 per year, which would give me about $28,000 a month in spending money. Right now, say we take that $28,000, we subtract the $9,545 payment that I'm making every month for 10 years to pay off all of my $900,000 student loan debt bill with a 5% interest rate. That would still leave me with upwards of $18,000 per per month in spending money. That is very good money for a lot of

9:15 people. Now, here's where I throw a twist, a curveball into what I'm what I'm planning to do, right? So, after I take home that that salary of 20 whatever it was, $28,000, right? And I pay my student loan debt and I have $18,000 for the month, right? I plan on investing about $3 to $5,000 per month in the S&P 500 or something else as a high yield account with a return of investment. For this example, we're going to use the S&P 500, which has about 10% annual return on average in the last 30 years, right? So, let's say for 10 years straight out of residency, I pay that

10:00 $9,545 a month towards my student loans and I pay $5,000 a month towards the S&P 500. For the first 10 years out of residency, I'll still be taking home about $13,000 a month, which if you remember, that's around the same number that the general dentist was taking home per month before paying their student loan debt, right? $13,000 a month. Good money to have to just spend on whatever, right? And of course, like things happen, right? There you're going to have some slower months. You're going to have months where you need to spend a little more money. Maybe it's Christmas time, you got a family, right? You can put less or even no money in during those months. But say consistently I was

10:45 putting $5,000 in per month in the S&P 500 while also paying around $10,000 to my student loans per month. Quick intermission to the video. If you're watching the video and you've made this far and you're enjoying the content, please drop a like on the video. It's right here under the video. just click the little thumbs up button. It's of no cost to you and it does so much to help boost the video and the channel in the YouTube algorithm. Thank you so much and I hope you enjoy the rest of the video. After 10 years of doing just that, student loan debt gone, investment account in the S&P 500 will be over a million if you have that 10% return that is on average. But of course, the market the market changes, right? So, you can't

11:32 guarantee this. So, while I was paying off that student loan debt, I still had plenty of money to live off of, have a family, maybe buy a house or pay a mortgage, whatever, right? And I'm also building an investment account of over $1 million. Now, how scary does student loan debt sound? It's all about making proper financial decisions, budgeting, living within your means, seeking a financial advisor, etc. chat GPT is not a financial advisor. However, these can give me quick answers that I could share with you guys and kind of ease your mind a little bit. Right? So now you also have the situation where you can be paying this $9,545 a month and also investing this

12:17 money in the S&P 500 and say after year 6 or 7, you may come to a point where you have enough money in your investment account to completely pay off the rest of your student loan. Now your investment account will dwindle. However, you're saving money on the interest that's building on this student loan by paying it off early. there's things that you have to trade off where you know you have the flexibility to talk to a financial advisor and see what would be best for your future. Now, I want you guys to think about that when you're thinking about your student loan debt. I know that $500,000 in the whole doesn't sound fun to anybody, but there's still good money to make in general dentistry. There's even better money to make if you specialize. And I

13:03 think that we all are getting caught up in this rhetoric about dentistry being uh no longer a good profession or whatever, but I think that's because too many people are getting into dentistry for the money and not for the actual love of the game. So, when they come out of school and they're looking at how much of their money is going back to their student loans, of course, no one's happy about spending $5,000, $10,000 a month strictly towards one bill. It's crazy. However, that's the investment that you put in to become a dentist. And if that was something that you really wanted to do, regardless of the money, this wouldn't really hurt you that much. So, that's all I have to say for this video. Thank you all for watching. I

13:48 hope this put things into perspective for you just a little bit and um I look forward to see you seeing you all in the next videos. Like I said when I was graduating, student loan repayment is going to be a heavy topic on this channel because that's going to be my reality for the foreseeable future, especially after I graduate residency. Let me know your thoughts about this in the comments. I know that a lot of you predent dental students, you think about this student loan debt a lot. Um, but you know, let me know if you got something out of this video. All right, I'll catch y'all on the next one. Peace. Let's go. I got in the back of my she I just pulled