Menu

Debt Repayment Strategy

Home Personal Finance and Budgeting Debt Repayment Strategy

  • Avatar Allixi 
    Participant
    Status: Physician
    Posts: 111
    Joined: 03/16/2016

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    Even if your numbers are accurate/real, I think you should be smart enough to understand why they’d seem implausible to others.

    This is a forum where the general attitude is that debt is a flaming emergency. Maybe that kind of thinking is unnecessarily cautious, and it’d be better to make that point without using really tone-deaf posts about keeping huge debts around just because you can (you know, because you’re so rich). It really doesn’t sit well with those of us that have put a lot of effort and made sacrifices into paying off our med school loans.

    I’m sure if you posted this on the Shark Tank forums, you’d get more sympathetic responses.

     

    Out of everything you post, what bugs me the most is that you refer to threads/topics as “strings”.

    #238076 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 334
    Joined: 06/10/2019

    My debt levels are nowhere near yours, as I only have a 3% primary residence mortgage and a new car loan forced on me by the dealership to take advantage of the promo, but I am in no hurry to retire them.

    Some people are heavily burdened by debt, and others see it as just a line on a net worth statement.  I am definitely in the latter camp, and it sounds you are too.

    So long as the cash flow is predictable and steady, and you have reserves to cover the shortfall if needed, I wouldn’t worry about the absolute value of the debt.

    On the other hand, it makes no sense to keep reserve cash returning less than the debt service.  I would throw every penny you keep in CDs into the market… in fact, I have thrown every penny into the market.  It might go up and it might go down, but if you have the stomach for it, it will be worth it.

    And if you don’t, why are you keeping so much in reserves that cost you more?

    Click to expand…

    Thanks molar roller. Congratulations on a great dental practice.

    The CD/savings interest rates and the debt interest rates are essentially a wash with the tax breaks. The goal for the cash equivalent reserves over the past 2 years was to ensure cash flow during the business disruption in moving the practice from one location to another building under construction, with final construction costs an unknown. Advisors said cash flow is one of the main reasons businesses fail.

    Any business disruption was less than expected, so now the goal of the cash is to find an investment home, whether it’s in the markets, business expansion, real estate. etc. versus paying off all debt. That’s why I started this post to get ideas. It looks like most are saying to retire the smaller debts as they’re going to reset to higher rates anyway. Like you, several have said keep some for investment opportunities so I think based on the collective recommendations, I am leaving some on hand for entry into the markets, a good real estate opportunity, a new business line or any combination.

    So at this point, two years into a big project, I’ll be retiring a lot of the cash reserves between debt payoff and investments. Keep in mind the cash is about 15% of NW, so there is always a lot already invested somewhere, mainly between stock market, office buildings and practice.

    #238078 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2509
    Joined: 05/01/2017

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    #238079 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 334
    Joined: 06/10/2019

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    Click to expand…

    Did you catch this in the supercar “thread”?:

    “I hate to bump this thread after it’s died down but it seem appropriate to add here that based on some comments I reached out to EntrepreneurMD with an offer to / in hopes of verifying his identity and he provided photos (cars, houses, screencaps from accounts) that support the general veracity of his claims. I asked for and he provided a photo of the Ferrari with a current newspaper laying on the hood. I believe that he’s a real doc with a crazy giant house and a Ferrari and money in the bank and at least two mutual fund holdings with 10yr annualized returns exceeding 30%.”

    #238083 Reply
    Liked by xraygoggles
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2509
    Joined: 05/01/2017

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    Click to expand…

    Did you catch this in the supercar “thread”?:

    “I hate to bump this thread after it’s died down but it seem appropriate to add here that based on some comments I reached out to EntrepreneurMD with an offer to / in hopes of verifying his identity and he provided photos (cars, houses, screencaps from accounts) that support the general veracity of his claims. I asked for and he provided a photo of the Ferrari with a current newspaper laying on the hood. I believe that he’s a real doc with a crazy giant house and a Ferrari and money in the bank and at least two mutual fund holdings with 10yr annualized returns exceeding 30%.”

    Click to expand…

    I stand corrected.

    What a strange way for both you and that mod to spend their time.

    We still don’t get to know the secret funds right?

    #238087 Reply
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1174
    Joined: 11/07/2017

    I don’t have a strong opinion about whether someone should have debt or not. I think “taking advantage” of 0% credit card deals is a waste of mental energy and time, but if someone gets their kicks from doing so and wants to keep track of it so they pay off or transfer the balance in time have at it. I feel the same way about car loans–I think if you get excited about the fact that you can get a 1% car loan or whatever while making >>1% on the $ you would have used to buy the car that’s your decision and right. Same with mortgages and especially on debt that is paying for itself (e.g. commercial real estate). What I find annoying is the lack of internal consistency with a particular strategy. I.e. Look at me I used this leveraged debt to get where I am today….5 posts later…I want to discharge all debt, how should I do it…5 posts later I am the amazing debt leverager and if you want to be amazing too you might want to take a few notes. Some people are debt averse and some people are not and can use it to their advantage, and the same person could switch from the former to the latter and back within the course of their lifetime, even several times within the course of their lifetime, but to switch back every few hours or days needs to be worked out on one’s own, I don’t think a forum can help.

    I think the numbers are believable, but I think if there was internal consistency along with the purported fund selecting etc. they should be quite a bit higher–I.e. having only 2 million invested in the market when someone is that skilled at fund selection and leveraging debt would be a travesty. The obvious answer is that you got lucky with a fund and were at least wise about investing only a judicious amount…but why not just admit that?

    #238092 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3079
    Joined: 09/18/2018

    “I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. ”

    Please don’t confuse a picture on a phone to a “moderated” as being an acceptable mode of verification. Many private businesses and individuals are required to comply with affirmative covenants. Yep, audited financials or at least a review.

    There are zero standards for a “moderator verification”.
    Question, did you submit the title to the car?
    Question, did the brokerage firm confirm directly to the moderator in writing?
    Oh, now let’s not deflect again. A long winded debate of verification proves nothing as well. Call it what you wish, it’s just opinions. Makes zero difference whether it’s fact or fiction.

    #238107 Reply
    Liked by Lordosis, MPMD
    Avatar Ghetto 
    Participant
    Status: Physician
    Posts: 126
    Joined: 08/13/2017

    I think some people are hesitant to have money in the stock market. I’m one of those people. I had a relative who lost $1 million plus right at retirement age in 2008. I had a patient (since deceased) who told me he lost $2 million in 2008 because he was in the MICU for a month during the crash after an MI and his wife didn’t have any control over their finances.

    I ultimately decided that I wasn’t going to put my money in investments that I don’t personally control. So now I own two commercial real estate properties (21k sq ft total), a rent house and two investment vacant lots on my street, a large percentage of an ambulatory surgery center that I developed, and a medical practice. I have some cash reserves but only $60k in stocks. I’m currently stockpiling cash to pay off notes on my commercial RE and for any other opportunities that may arise. Yes I missed the stock market run up but I’ve had significant appreciation of my properties over that time. At current market rates my commercial RE properties will generate around $500k/year when the notes are paid down. One property has nine years left on the note and the other has fifteen years left.

    I’m not very liquid and it’s harder for me to calculate my net worth than those who can tally up their investment accounts. Will I come out ahead or behind where I’d be if I had it all in the markets? Only time will tell.

    #238111 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1196
    Joined: 01/26/2017
    think some people are hesitant to have money in the stock market. I’m one of those people. I had a relative who lost $1 million plus right at retirement age in 2008. I had a patient (since deceased) who told me he lost $2 million in 2008 because he was in the MICU for a month during the crash after an MI and his wife didn’t have any control over their finances.

    Click to expand…

    Your examples don’t really make sense. They didn’t lose anything if they just hung on and didn’t sell.

    #238128 Reply
    Liked by wonka31, Panscan
    Avatar Ghetto 
    Participant
    Status: Physician
    Posts: 126
    Joined: 08/13/2017

    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.

    #238132 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3079
    Joined: 09/18/2018

    “the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.”

    Just as they should not invest from a “political “ or “emotional “ standpoint, one should not choose an investment based on fear or hype.

    Stocks aren’t for everyone, nor should they be. Real estate is not for everyone either.

    Know what you own and consider the risk before even considering the returns. Media and culture and acquaintances should never be an excuse. One makes their own decisions. My suggestion with all due respect is to consider diversifying outside of real estate. Real estate is cyclical as well, it might keep you investments balanced out. Then again, maybe not.

    #238142 Reply
    Avatar Infinity 
    Participant
    Status: Physician
    Posts: 92
    Joined: 05/25/2019
    So now I own two commercial real estate properties (21k sq ft total), a rent house and two investment vacant lots on my street, a large percentage of an ambulatory surgery center that I developed, and a medical practice.

    Click to expand…

    Could you please give us advices or share your experiences on how did you get in real estate properties?

    #238149 Reply
    Avatar Ghetto 
    Participant
    Status: Physician
    Posts: 126
    Joined: 08/13/2017

    I hear you re: diversification. I’ve had people tell me to diversify from real estate. Usually those people are 100% in the stock market. Commercial real estate does provide some protection against the ups and downs with long term rental agreements (5-10 years).

    #238150 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1196
    Joined: 01/26/2017

    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.

    Click to expand…

    Safe to say that the stocks I own are not likely to go to zero.

    #238151 Reply
    Liked by wonka31
    Avatar Ghetto 
    Participant
    Status: Physician
    Posts: 126
    Joined: 08/13/2017

    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.

    Click to expand…

    Safe to say that the stocks I own are not likely to go to zero.

    Click to expand…

    That’s what all the Bear Stearns stockholders thought. Huge financial company founded in 1923 and survived the Great Depression to become a global financial behemoth. Stock reached $170 in 2007 and was sold for <$10 before it went away. I was reminded of this when reading about Jeffrey Epstein. Even financial wizard types like him lost a lot on that one stock alone.

    For your sake I hope you’re more astute than you are humble.

    #238156 Reply

Reply To: Debt Repayment Strategy

This topic is marked as closed to new replies, however your posting capabilities still allow you to do so.

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

Notifications Mark all as read  |  Clear