Fifth place in the 2018 White Coat Investor Scholarship contest goes to Brent Wright, a student at the brand new DO School in my state, the Rocky Vista University College of Osteopathic Medicine in Ivins, Utah.
Fifth place in the contest was good for $1,000 cash plus a copy of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing for every member of Brent's class. He will also get his choice of either Fire Your Financial Advisor ($499 value) or the 2018 Physician Wellness and Financial Literacy Conference ($299 value).
I preach frugality to medical students all the time (“Live like you're the poorest people on the planet, because you are.”) I'm glad to see a few of them listen! You think you're a frugal medical student? You have no idea. I have zero doubt that Brent and his wife will be very wealthy someday.
The best student loan is truly the one you never take out. I hope you enjoy this one as much as I did. Note that here at WCI we encourage both entrepreneurship and the strict following of rental agreement contracts.
Reducing Student Loan Debt $2.60 at a Time
“Look at that pile of clothes over there, grab it!” my wife said to me as we pulled into our driveway. Sure enough, I looked over a few doors down from us and there was a huge pile of clothes next to two overflowing trash cans. I nervously looked around to make sure no one was watching, scooped up an armful of clothes and hustled inside. It wasn’t the first time we had dug through someone else's trash, but never in this quantity. I looked at the pile of clothes, “Nothing is going to fit us,” I said doubtingly. What then proceeded was an hour of pure excitement as we realized our neighbors were our carbon copies.
“Banana Republic, Nike, Gap!” We shouted as we tried on an array of new outfits. I even landed a new pair of converse with barely any wear. “These people must be loaded to throw away all these expensive clothes!” I exclaimed. “Maybe they got evicted and the landlord threw everything away?” My wife said questioningly. “I wonder what else they threw out?” I said.
We again ventured outside and stared longingly at the two trash cans wondering what other treasures lay waiting. “We can’t just dig through the trash in broad daylight. How embarrassing it would be if our neighbors were to see us,” I said. “True,” my wife replied. But our curiosity got the best of us. We wheeled both trash cans into our garage, shut the door, put on gloves, and claimed our bounty.
A complete list of our earnings would be exhaustive, but here is a small portion of our treasure:
- Wifi Router $40
- Gold Lamp $15
- Kirkland Shampoo $19
- Dawn Dish Soap $10
- Martinelli's Sparkling Cider $4
- Porter Styling Gel $12
- Uppercut Matt Clay $16
- Garden Hose $15
My wife’s and my frugality all started one year ago. We were newly married and I was about to start medical school. We had just moved into a new apartment, and we were completely and utterly broke. However, between working full-time and scholarships we had managed to come out of our undergraduate education with no debt. But everything was about to change.
I distinctly remember the moment I accepted my student loan “award.” (I always thought that was a funny choice of wording. Like, “Congrats! Here is how much debt you are going to be in!”) That much money was something I could not even fathom. People told me constantly, “Oh don’t worry about it you will pay it back easily!” But the sinking feeling never improved. I had done the math: 7% interest at roughly nine years before I could even start paying it down. It was soul crushing. Thus, began our endeavors to keep our debt numbers low.
Our biggest debt reducer during our first year wasn’t our dumpster diving, but an idea we picked up from the depths of the internet. It is only my wife and I in our three-bedroom townhome. The rent was at the very high end of our budget, but the proximity to the school along with the landlord allowing pets pushed us into it. It did not take us long to look at the two empty bedrooms and realize how much money we were losing. We contemplated seeking out a roommate but that idea quickly soured as we realized how much we loved having control of our own place. That is when we implemented our brilliant idea. A stealth Airbnb. We were not entirely sure of the rules with the HOA or our lease, but we figured if we kept it low key we wouldn’t cause any problems. It did not take long before we had both bedrooms booked every weekend. Our profits rose to about $600 on a slow month to $1,200 on our best month. We ran this for an entire year before we finally got turned into the HOA and shut down (turns out there was a rule against it). Our total savings amounted to about $9,000 and all it had cost us was a little sacrifice of privacy and a very apologetic phone call to our landlord.
With our Airbnb shut down, our side hustle now consists of selling everything we can get our hands on. Whether it be our own stuff or free stuff people post online. Today for instance, someone posted three free bicycles a half mile from the school. Opportunities for a free 75 dollars don’t last long so I decided a quick study break was in order. This opportunity was slightly complicated by the fact I did not have a car to go pick them up. I Google image searched “How to carry a bicycle on a bicycle?” Unsurprisingly that did not yield any ideas, so I settled on walking to the house and wheeling all three bikes back to the school (wheeling three bikes of different sizes with flat tires a half mile was much more difficult than I anticipated). Big stuff like bicycles we sell locally, smaller/harder to sell things I usually post on Ebay. My latest Ebay sale consisted of Dave Ramsey’s, The Total Money Makeover, which I got for free and sold for $2.60 (I think Mr. Ramsey would approve).
Sometimes I think about sales like this and laugh. What is $2.60 going to do to improve my debt situation? Not a whole lot. But I came to an important realization about 6 months ago. If I was not willing to be aggressive about borrowing as little as possible now then how will I ever follow through with my plan of aggressively paying off debt later. After all, debt avoidance is usually the best debt strategy possible.
When my wife and I started this journey we sat down, looked at the total cost of attendance and set a goal number for our debt. We were determined that we would do whatever it took to stay under that number. We have sacrificed a lot over the last year and I am proud to say we are currently on track for our goal. However, you can only sell so much of your stuff before you run out and annual tuition increases each year feel like a punch in the gut. This leaves me asking myself, “What more can I give up?” If my wife would let me, I would sell this very chair I am sitting on but certain things like my marriage are not worth the sacrifice.
With the addition of a new child this April things will most likely get significantly more difficult to stay on budget. But I consider this an incredible opportunity and not a set-back. The math says it is not possible to achieve our goal but I say differently. I have not quite figured out how to make the numbers work in our favor yet, but I have found there is always opportunity if you are willing to put in the work.