Join Andrew Tisser (Talk2MeDoc Podcast) with Travis Hornsby as they talk about planning for student loans. Travis is passionate about helping students make sure that they get to live the life they want to live. He shares his take on Public Service Loan Forgiveness (PSLF), tips on avoiding unforced financial errors, and designing a life while paying for your student loans.
In this episode, you’ll learn:
- The current status of PSLF. Is it going away?
- The different strategies and loopholes to take advantage of PSLF
- How important is PSLF to you depending on your savings rate
- Private refinancing and the PSLF
- The importance of setting up for financial independence
Travis Hornsby is a speaker and the founder of Student Loan Planner. After helping his physician wife navigate ridiculously complex student loan repayment decisions. To date, he’s consulted on over $650 million in student debt personally, more than anyone else in the country. He is a Chartered Financial Analyst and brings his background as a former bond trader trading billions of dollars.
He brings that same intensity to analyzing the best repayment paths for graduate degree professionals with six figures of student debt. He’s helped over 2,500 clients save over $120 million dollars on their student loans, and he’s been featured in U.S. News, Business Insider, Forbes, Huffington Post, Rolling Stone, VICE, Fox Business, ChooseFi, Bigger Pockets Money, and more.
“The only thing holding you back is creativity to live the life you want to live”
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All opinions expressed by the guest in this episode are solely the guest’s opinions and do not reflect the opinions of Andrew Tisser DO, Talk2MeDoc LLC, or any affiliates thereof. The guest’s opinions are based upon information he considers reliable, but Andrew Tisser DO, Talk2MeDoc LLC, nor any affiliates thereof warrant its completeness or accuracy. The guest, Andrew Tisser DO, Talk2MeDoc LLC, or any affiliates thereof are not under any obligation to update or correct any information provided in this episode. The guest’s statements and opinions are subject to change without notice.
Travis Hornsby, welcome to the talk to me doc podcast.
Travis Hornsby 0:12
Andrew Tisser 0:14
Well, Travis, I recorded a little bio about you that you provided, but in your own words, could you tell the listeners who you are what you do?
Travis Hornsby 0:23
Yeah, so I love making plans for people for their student debt, to make sure that doesn’t get in the way of the life they want to live. So I found in student loan planner after kind of a life as a bond trader, where I was, you know, buying and selling, you know, billions of dollars of bonds, one of the largest investment companies out there, and it was interesting, it was really fascinating and I learned a lot but it just wasn’t kind of specifically for me, just didn’t feel like I was passionate about the, you know, the role that I had.
So I thought, well, I want to help people in some way. And then I actually met my wife from for meds, whatnot in med school. She she was in fellowship at that point. And you know, I was working at this corporate job. And then I found out she had a lot of student loan debt. And that’s kind of how I got involved in this is basically, she had a bunch of student loan debt. And I was trying to come up with a plan using my bond trader Excel modeling skills. And I figured it’d be real easy to do.
And it ended up being really complicated, just because as your listeners probably know, there’s all these different income based plans, tax filing statuses, you can file different ways there you can, you know, get caps on your payments. Sometimes you can get public service loan forgiveness, or you can refinance or you can even go for non PSLF forgiveness. So there’s just so many options that I thought wow, this is a lot more complicated than I thought.
So it gives a lot of stuff to work on. And it’s an it’s an it’s something different from from bond trading. So yeah, so I mean, that’s kind of how I got into it and why I enjoy it. I’m really into the financial independence community, so I kind of really liked those concepts. You know, I tried to retire early at 25. And was not successful. Because my, my father in law was basically like, get a job or I’m not going to come to the wedding. So, you know, kind of kind of motivated me to make this thing, make this business work, you know?
Andrew Tisser 2:17
So how long have you been doing this now? by four years, four years? Cool. So you really get it with a wife as a physician, you, you understand that the struggles we go through?
Travis Hornsby 2:28
Yeah, I mean, I would say not as well as she does. But, you know, I understand the spousal sort of impact, right. I mean, it’s just medicine can be all consuming, you know, I see this with her all the time. It’s just, you know, you know, you give it give it all to the job because that’s what it requires. And then it’s like how much you have left in the tank for everything else, right. So you know, even like her hobbies, like she likes playing piano like likes jamming out to guitar sessions, saying stuff, like when you’ve given Everything you’ve got to your patients at the office and you’re really tired and exhausted and everything, how much energy do you have to do those things?
So I mean, it’s definitely better than residency. So I’ll encourage anybody out there who’s going through that, as a physician, spouse, or physician, you know, in life does get better. That’s very true. But, you know, I think that my personal opinion is that long term if physicians are getting burned out, which we know is a problem, that you just want to put yourself eventually in a financial position where you could afford to do part time, and have that be kind of a long term approach to burnout versus just quitting the profession entirely. Like we’re seeing a lot of people try, you know, thinking about
Andrew Tisser 3:39
that’s a fair point. I think just cutting back hours really helps people in life in general. But certainly the the monster student debt is the last thing people want to think about when they get home after 80 hours in hospital all week.
Travis Hornsby 3:57
Yeah, I mean, that’s very true. I mean, thank you. need to realize about student loan debt is it’s a tax, it’s not really a debt. So if I, you know, if I told you that you have $200,000 of debt, then you have to pay $2,000 a month for 10 years, there’s no flexibility at all. And if you do, I’m gonna report it to your credit score, it’s gonna be really bad. You know, we can we can maybe, you know, see some of your wages or something like that. That’s what student loan debt would be like, if it was a debt. And, you know, it’s really only a debt when you refinance it before the point where you refinance at its a tax. So for example, you know, you can pay it as 10% of your discretionary income.
So if you have like a lot of federal student loan debt, then you’re going to be paying 10% of your discretionary income, it can get more complicated than that, because you you know, that means that you get a deduction, and you get to deduct a certain amount based on how big your family is. You might need to file taxes a certain way to exclude your spouse’s income on that. But at its core, it’s just 10% of your income. You know, basically And and when it when you consider it that way, we’ll say pediatrician, you know, it’s got 400 grand in medical school debt, well, she doesn’t have 400,000 in medical school shit school that she’s got a 10% tax on her income.
And and then you know for public service loan forgiveness, it’s forgiven tax free after 10 years. So for people on that nonprofit government job route, it’s pretty clear that student debt is a tax and it’s something that you shouldn’t be super worried about. But for people that are, you know, in the private sector, you know, that it’s still actually a tax until you don’t want it to be. And that’s the really important idea is when you when you don’t want it to be taxed anymore. That’s when you can go ahead and basically buy your way out of it being a tax by refinancing it.
So I mean, imagine if rich people had the ability to buy out a tax and not pay tax by just paying, you know, $200,000 of student loans back or something like that, right. So I mean, that’s the kind of way you want to think about this, because a tax doesn’t really prevent you from doing that. Something that you want to do. And a tax is not something that’s like, you know, just at this huge burden that’s gonna crush you with anxiety. We know this because people still live in New York and California instead of everyone moving to Texas to Florida, right.
Andrew Tisser 6:14
That’s pretty interesting. I’ve never heard it referred to as a tax before, and I think that can change people’s perceptions on it. That’s a that’s an interesting point. I like that. So let’s talk about public service loan forgiveness for a second. You know, the intricacies of it all? I think. I think a lot of my listeners are very concerned that this program will somehow go away. Or the you know, that the status of public service loan forgiveness, good. So can you comment on it? Yes,
Travis Hornsby 6:48
it’s not going anywhere, especially after this pandemic, right. I mean, like, what are you gonna do? Tell, you know, have a bunch of headlines, you know, in an election year and even after that say, you know, Doctors risked their life, you know, on the front lines instead of getting their loans forgiven. They’re getting them, you know, a limb, you know, forced to pay them back, right? Like, there’s no way that there’s going to be that headline Come on. Right, like so. So that would be my first point. Now, my second point is just like from a contractual perspective, you know, you have to look at your promise right now.
Otherwise, you’re just sort of gambling, right? You’re just making things up, but you’re just kind of talking without like, knowing what you agreed to, like a promissory note is a contract that, you know, basically, between you and the lender that defines the terms of your loan. And if you look at that promissory note, it specifically says public service loan forgiveness in there. Right. So it’s got it in the contract. And for that reason, the only people that have really sought to repeal it have been President Obama in 2015. But he basically wanted to cap it no more than 57,500 which is essentially the maximum you can take out for undergraduate.
So basically, what President Obama was saying back in the day, you know, when he was Releasing budgets near the end of his administration was that, hey, this PSLF program, the fact that it’s forgiving, mostly graduate school debt, that’s not really what we intended, like we want it to be for, you know, firefighters, nurses, you know, first responders, like people, you know, police officers, firefighters, like people with 30 $40,000 in student loan debt. And the democrats in his own party shut him down. And then you haven’t seen it brought up by Democrats since then, in fact, every single proposal since 2015, among Democrats has been let’s grow this thing and expand it even more. And then Republicans have sought to repeal it, you know, presumably because, you know, you know, fiscal discipline combined with like, the fact that like, there’s fewer republican constituents out there, you know, that would probably benefit from PSLF, right?
Like, it’s probably like 6040 or 7030, Democrat, Republican split on the people who benefit from it. So maybe, you know, you could argue that’s part of it. But Republicans have never sought to repeal it for people that are currently working towards it. Ever You know, so Republicans have always sought to grandfather in the people that are currently working towards it because republicans like contracts, they really like contracts, and they do not want to be a party that, you know, tries to go back on what a contract says, which is why they’ve wanted to repeal it through for people that are already working towards it.
So, you know, that’s like, kind of what the the political tea leaves are saying in terms of what’s gonna happen with PSLF. In the future. You know, the part of the loan servicer part of things, it’s just nothing but incompetence, like fedloan doesn’t get paid, you know, a bunch of money by not getting you PSLF, right. They’re not like trying to prevent people from getting it. They’re just not very competent with it. And that’s because the program was designed in such a way that it was it was just really complicated early on, you know, I mean, we can get into all the details. I don’t know how much your listeners will care about this technical details as to why that is, but basically, like the loans prior to 2010 were called felons ffl and, and a lot of those loans are owned by banks and banks. were, you know, looking at having to give up a lot of their interest income and have their loans forgiven, you know, and they were like,
Whoa, you know, if you’re gonna do this program limited to only loans the government owns and leave us out of it. So that’s why the government made it so that only Direct Loans qualify for PSLF. And most of those loans weren’t issued until after 2010. So you’ve got people graduating from med school that took out direct loans, those people would mostly be graduating after 2024. So anybody applying as a physician to PSLF before 2024 the only way that you’re doing that is if you had a really, really hyper aware medical school office that told you to consolidate your student loans prior to 2014.
There’s there’s some people out there for sure. But that’s not a common thing. Like most medical schools were really had no clue about this until like 2015. You know, so that’s kind of a widened nutshell. Like all the PSLF stuff is just all messed up. It’s like the rejection rate was 1%. Now it’s up to two. Sorry, the acceptance rate was up To 1% Now it’s up to two or 3%. Right? And I know that sounds really bad. But again, that’s because all those people applying had the wrong kind of loans. So, you know, you’re gonna see that acceptance rate for PSLF continue to soar. You know, my guess is by like, 2022, you’ll see that acceptance rate for pf sloppy like 10%. And then maybe by 2024, that acceptance rate will creep up to more like 50%.
Andrew Tisser 11:23
Well, that’s encouraging. I and my wife’s on the, in the program, she’s an academic duck, so well, you know, what’s your advice to people pursuing it just read the rules and follow the plan?
Travis Hornsby 11:37
Well, you know, again, it’s not it’s not as simple as people think it is. Right? Like, if it was as simple as sign up for this plan every time and keep applying. If you’re in a non for profit job, then there would not be an ease for a group like ours, right? It just wouldn’t. It wouldn’t be, you know, it wouldn’t be something that would be worth spending money on, right? Because like, you could just fill out the form and that’s it. And that’s, that’s all that’s required. Right.
So I think that getting PSLF is like, I mean, it’s not rocket science, like you can apply by just sending in the employer certification form to fedloan servicing and just, you know, seeing if they come back with you having qualifying payments, if you’re if you’re on an income driven plan, like we’re most of the kind of money savings comes in is just knowing all the loopholes. So for example, you know, if somebody is in residency or fellowship, and they have a, you know, future income is going to be much higher than their loans, like the Pay As You earn plan will lie in a cap the monthly payment, instead of having it be just 10% of your income, it’s 10% with a cap of the standard 10 year plan. So for example, you know, let’s say your ologists making $400,000 but has 200,000 in student loan debt on the repay plan, that person’s paying probably like 40 grand a year, a little under that that like around there, and then you don’t the Pay As You earn program. Maybe that person’s only paying like 20 something grand a year. So that can be a big difference right? T
hen, you know, another example is a tax filing status. If you’re on the repay plan, you know, that might be beneficial unless you’re married. And then somebody income is getting into the picture, which is causing your payment to be, you know, you have a few thousand dollars more than it would be otherwise, if you filed separately, right. You know, some other people, there’s even more loopholes besides that, too. So I’ll give you another example. So there’s this program, where you know, the repay plan, basically, if you file taxes, you know, any which way the repay plan is always a proportional payment, which means that say, say, Andrew, that you had some loans, but you were pursuing, you know, some other plan or something.
Or let’s say that you were pursuing PSLF to, let’s say, like, You’re both pursuing PSLF. And you’re thinking, Oh, I’ll just I’ll just fall joint. But let’s say that your debt is way lower than hers, right? So what you can do is this repay plan gives you a proportional payment, so maybe, you know, instead of paying You know, a couple thousand dollars a month, you’re able to use that loophole and only pay a couple hundred dollars a month. And then you’re also filing taxes and having her do pay as you’re in filing separately, which saves her a few thousand a year. So you can easily easily get into situations with using like some complex like tax filing stuff, or you can save maybe five to $10,000 per year on the payments for PSLF.
You know, so there’s there’s just a bunch of loopholes in that regard. Right? I would say like getting the basics right is important. So getting the basics right is just sending the employer certification form, get your loans over to fedloan servicing, send it to them once a year, pay based on an income driven plan. And, and then, you know, work your 10 years, you know, cumulatively at an offer profit or government employer while making payments and certifying once a year, and it will work out fine.
Andrew Tisser 14:52
That’s fair, right. I bet Yeah. Without getting into the weeds i think that’s that’s great advice. The you know, I there’s been some talk about About perhaps recertifying twice a year just because of a general distrust of fed loans, do you think that’s necessary or
Travis Hornsby 15:09
it’s not necessary, but it’s but it’s good if you have anxiety problems, you know, I mean, so at the end of the day to mean like, so here’s one thing that we find. So we do a lot of like financial independence kind of research around student loans. You know, that’s, that’s also something that we like to talk about, during, during doing consultation for people. So it’s like, one thing we find is if you have a bad savings rate, then PSLF is the end all be all. Because what we find is your retirement date can swing as like, as much as five or seven years earlier or later, depending on whether or not you’re getting PSLF if your savings rate is like 10 15%.
And the reason is just because PSLF becomes such a huge part of your financial plan because you’re not saving as much money as you probably should. And then likewise, what we find is People that long term live one sort of economic class below where they are, are the ones that PSLF will often just have basically a one year swing on their retirement date. In other words, the more money you save, the less important PSLF becomes, and your overall financial picture, which is which is a really important point because a lot of the people that I see posting about PSLF having such great anxiety, like I had this conversation with a very high earning specialty couple like like a,
I think orthopedic surgeon and like, you know, something, some other specialty that was hiring, you know, cardiology, urology, something like that. And, and I showed them, how just increasing their savings rate 10% was going to have better five times bigger impact than just, you know, getting PSLF on this massive amount of debt that they had. And all their energies, all their mental energies were spent on getting people slf instead of focusing on how did they get 5000 a month being contributed into, you know, index funds at Vanguard or something, you know.
And I think I think it’s just really important to have perspective like that. That’s something that helps you avoid anxiety. As you know, recertifying twice a year, maybe I’ll do the first year or two, just to kind of give yourself peace of mind. Maybe you do it in the first year to have a new job just to kind of give yourself peace of mind that the new job qualifies. But but don’t go overkill, right. Like I tell people think about this, like taxes, like once you have the right plan, then you think about it once a year and you send in all the paperwork and that’s all.
Andrew Tisser 17:39
Yeah, that makes a lot of sense. How about the other side of the coin, the private refinancing people. I know. There’s a lot of talk about the implications of refinancing. And people should really, really be sure that they won’t qualify for PSLF if they go that route. I personally refinance in residency, but I knew for a fact that I would never be working at a nonprofit or government agency. So it made sense for me. But can you comment on that a little bit?
Travis Hornsby 18:12
Well, yeah, I mean, so.
So first, I would say like, that’s a good example of how this stuff can get complicated. So I mean, maybe maybe that’s the right decision about refinancing. But like in your case, like if you have a spouse that’s going for PSLF, and you’re not, like, sometimes your loans can be useful as an absorption tool of payments. So it really depends on what the numbers are. But a lot of times, for example, you know, let’s say that you have 30 40% of the debt.
You know, your loans can absorb 30 or 40% of the overall required payment on an income driven and income driven plan, which can often mean that you’re going to get more forgiven on the spouses loans that are eligible for PSLF than the interest savings that you receive if you’re with the federal government. Sorry if you’re with a private lender. Right. So that that’s that’s that’s an example of how this stuff can get, you know, complicated. You know, in terms of refinancing overall, I mean, consider what’s going on right now. Right now, people who refinance and private lenders are still paying their interest. And at best, they’re getting three months worth of forbearance on their federal loan, sorry, the private loans. And then people that have federal loans are getting zero percent interest right now.
I think that’s pretty fascinating. When you say like, I mean, you know, in terms of, you know, federal student loans have a lot more protections than private loans. And long term it yes, it makes sense for a lot of people to refi to refinance. I’m not saying it doesn’t, I’m just saying that, you know, probably the right time to do that is when you are earning more than what you have in student loan debt and you have a private sector job with a good emergency fund, you know, then it’s probably okay to give that give that safety of the federal government up for you know, a lower interest rate so you can start paying it down faster. But But I’m not at As gung ho about refinancing as a lot of people are,
Andrew Tisser 20:03
that’s definitely a good point. I know.
The I recently refinanced again, because given all the corona situation, my previous company that I had refinance with did not have a death benefit. So, you know, I’m an emergency physician and I have a likelihood of dying from this thing. And then that debt would not be discharged on death was pretty scary to me. So I refinanced again with a company that did. So that’s, you know, example one of the one of the Federal protections that you’re giving up.
Travis Hornsby 20:40
Well, even in that case, to you have to read the fine print but a lot of times student loans forgiven and discharged via death, discharged for private student loans can actually be assessed as tax taxable income against your estate. So I mean, that’s that’s something else to consider for private loan refinancing. Definitely. I had the one I went
Andrew Tisser 21:02
with has the What do not send a 1099 tear estate? Thankfully, but yeah, that’s that’s something people really don’t think about, but I think has been brought to light a little bit more given the recent current events.
Travis Hornsby 21:15
Yeah, I mean, I think that the good news is, you know, you can save on a $200,000 to the loan balance. So you’re cutting your interest from, you know, six or seven to four, you know, that’s saving, you know, four or 5000 bucks a year in interest, which is pretty, pretty meaningful. And, you know, extra life insurance, you know, like, I got a, like a, you know, large policy for maybe $1,000 a year, like a very large policy, you know, you can get, you know, a million or $2 million policy for probably like, you know, few a couple hundred dollars a year something like that few hundred dollars a year.
So that’s that’s really cheap to protect against that risk for something you should probably have anyway, that would more than cover your student loans. If something didn’t go Right, right if you didn’t read the fine print correctly or something like that, right, so, I mean, as long as you have good Term Disability Insurance, I think that that’s kind of the key part for physicians because, you know, I mean, it’s pretty fascinating what’s going on right now, right? Because we did it, we did a survey and we found that, you know, back in mid March, like 91% of physicians didn’t have an income change. And now only 70% of physicians don’t have an income change. This is like people on our, you know, that read our website, not just physicians overall, right.
you know, what’s, what’s fascinating is positions, incomes have always been assumed to be rock solid. And now that we’re seeing cracks all over the place in that right people I would have thought would have never had job security issues or having job security issues. You know, not as bad as other fields like so for example, only 1% of physicians are out of a job right now. And then 56% of dentists are out of a job right now. So you know, physicians are still in better shape, but
But I think it’s just so important to get to this point where you’re financially independent, so that you do have some sort of sort of bargaining power or control over your own schedule in life, you know, because, you know, physicians have kind of shown that, you know, they’ll sacrifice themselves and do anything it takes to take care of patients, but then hospital systems are I mean, they’re all about the bottom line. Right? I mean, I think then the latest bailout bill, I think they get $75 billion yet, you know, every academic medical center that I know of is talking about how do we cut, you know, physician attending incomes by 10 to 30%. To close this, you know, so called budget loophole or budget gap that they need,
I don’t know. I mean, that’s maybe a little bit different topic, but I’m just very skeptical of these large hospital systems just trying to profit maximize and just basically being you know, you know, very lucrative for profit businesses and run like they are.
Andrew Tisser 23:54
Oh, yeah, I think more than ever, this this has been shown given the credit Is that I think that just increasing the burnout and dissatisfaction in Doc’s because they’re see, you know, they’re seeing their hospital systems cut their salaries while they’re getting bailed out. And again, yeah, that’s a different discussion. But that’s that’s how the docs are trapped and just look at some of the stories coming out across the country about doctors who are speaking out and getting fired. You got to think about all the people that will not risk speaking out against terrible conditions, because they have half a million dollars in debt and they need their job.
Travis Hornsby 24:32
So, I mean, the only thing I’d say with that is, you know, I mean, you know, I mean, I think that’s, I think that’s hard to say, like, yeah, in certain places, you would get fired, you might have to move states to get another job. Right. But, but when this crisis is over, you know, I mean, the flip side of things is, is as hospitals, we’re still going to have a lot of money to spend and hire a lot of people again, you know, and so it’s kind of like if you have enough money to last, like how what is the longest that this virus can last in terms of destroying our economy?
You know, maybe two years. I mean, people have kind of talked about a vaccine, you know, maybe maybe we have one available and, you know, 18 months or something, right? So it’s like, as long as you get to some level of financial security, you don’t need to have 25 times your annual expenses in the bank or in a portfolio right? All you need is to have enough financial security, say a cut, you know, you know, few multiples of what you earn maybe just two times what you earn, you know, sitting in total investments and assets before you’re like, Well, you know, I like maybe I can’t speak up without fear that I’m gonna have to go, you know, get in the breadline, as soon as I get fired. You know what I mean? I think physicians have a lot more power a lot more power than they think they do. And, and I think that just the nature of medicine and the hospital system and stuff like that just kind of scares people. Right? You know, it just gets kind of like the movie office space. If you seen that one, right?
where, you know, he’s just sort of doing whatever the boss tells them and he’s abused and not respected and it just is so sad with his life. And then he just starts not caring and just like doing it on his own kind of his own looking out for himself, basically. And then suddenly they’re like, Oh my gosh, this guy’s going places. He’s gonna get upper management. He’s got upper management written all over him, you know? I mean, you know, I know people in medicine, like my wife always like, well, that’s different.
That doesn’t apply to medicine, you don’t know anything. Okay, but I know people like you know, physician on fire white coat investor, like those guys who, you know, have effectively designed their own lifestyle and design their own jobs. Right. I mean, physician on fire walking away from medicine completely. And then in the final few years of his life, he or his career life, he, you know, basically just said, Hey, I’m gonna work these hours and if you don’t like it, then I’m quitting. I mean, that’s pretty powerful. And if you’re producing a certain amount of revenue for an organization, they basically are always going to say yes.
You know, so I think that that’s really critical to
just, you know, get to that next point get to some sort of Mile Marker like Pete, you’re running a marathon, not a sprint, and how do you run a marathon, you pick, you know, some sort of fixed marker in front of you, maybe a mile marker like a landmark. And you say, if I can only get to this level, right? So a lot of people that are burdened by stolen debt, the reason they’re burdened, is because their net worth is very negative. So your first mile marker is maybe how do I get to a positive net worth? Maybe that takes a really long time. But if your student loan debt is a tax, not a debt,
well, then it’s not even something that you have to worry about. You know, it’s it’s something again, federal debt is owned by the government. The government is not interested in making a profit on this, that you know, they’re just incompetent on this.
Andrew Tisser 27:56
Yeah, that’s that’s a fair point. I mean, I think the the first hurdle of I would argue that the first hurdle for docs is getting to neutral, getting a zero net worth and not getting a positive. But which could take many years. But good points all all around.
Travis Hornsby 28:14
You, I think that you just
want to start off with baby steps get an emergency fund to have a cards paid off, you know, don’t buy a house, that’s more than double your household income. You know, try to avoid the unforced errors, you know, the really big unforced errors that cost people tons of money.
that’s gonna have more impact in your life long term than even if there’s some, you know, student loan, you know, kind of fairy came in and just, like, wiped it all away with a magic wand. Right? I mean, even if that happened, long term, if your savings rate investing levels are not high, it’s not gonna matter. I mean, yeah, it’ll, it’ll make you feel really good that it’ll be kind of like a show. High, like you’ll feel fantastic for a year maybe.
And then kind of like when you buy a new car, you know, the new car smell lasts for a while, and then it kind of fades and then you’re not necessarily any happier than you were before. So that’s a word of caution to to people who are so focused on paying off their student loans is all they think about. We get to know student loans, you’re going to be left with an empty feeling if you’re not trying to build a life for yourself in spite of that, and you have to build that life right now and not wait till later to do that. Otherwise, like I said, you’re going to be left with this empty feeling when student loans are gone. And you’re you’re not going to know what to do next.
Andrew Tisser 29:36
Yeah, I love that. Actually, I think there’s so much focus on on attacking student loans, which may not necessarily be the best financial decision, depending on where you’re at. I mean, if if you have refinanced and your four sub 4%, then pouring all your money into into the student loan balance, maybe maybe the wrong decision.
Travis Hornsby 29:58
Right and You know, this might be kind of interesting for people to know, but what what percentile? Would you say that somebody falls in? If they’re making $150,000 in the United States as an individual in terms of like, what percentile of the income distribution? Are they and what would you guess? Hmm,
Andrew Tisser 30:16
it’s a good question. I don’t know, top 10%?
Travis Hornsby 30:21
So it’s top 6%. So if you’re, you know, if you’re making more than 150,000, which virtually every physician is, now, there’s a couple, you know, pediatric specialties, you know, got to give you a love, right, that they get paid less than that in academic institutions. And some, you know, in some cases are a bit but most physicians are making almost all physicians attending physicians are making it more than that, right. So, you know, by definition, as an attending physician, you’re in the top 5% income earners in the United States. And when you compare yourself you’re going to compare yourself to your colleagues because
Why would I compare myself to the person who is a, you know, working class construction industry person that I went to middle school with? That doesn’t make sense, right in your mind that you have to realize, like, you know, there’s this relative standard that you’ve reached as a physician that puts you in the top of the first world. So think about that, right? Think about your income distribution in America being in the top 5%. And now think about the distribution of like your average person in America being in the top 5% of the world.
Right, so you’re in the top 5% of the top 5%.
And I understand that you have, like listening, the listeners out
there. I understand that you have problems like financially I understand your stress. I understand it’s, it’s a lot right and you’re burdened. And what I’m saying is, is what that level of income The only thing holding you back is creativity to live the life you want to live. Right? If you want to To do part time, right out of the gate, as an attending, you could do that, you would just need a plan. Otherwise, you’re just gonna just say random things, and it’s just not going to be impactful. And you’re not going to know kind of how to approach things. Right. So what I’m saying is, there’s tons of hope.
And there’s tons of optimism, right? I think that that anybody could do medicine long term, if you could reduce the hours. I think that’s kind of the the core thing is like, people feel like I have to earn more money, or I have to pay off my loans or I have to support my family, we have to make this mortgage payment. So I’m going to work 50 hours a week or 60 hours a week, because I’m paid an RV use, I don’t get paid as much money if I don’t produce this much. Right. And, and that’s just not a way to love life, especially when you’re already in the top, you know, 5% of the top 5% you’ve already won the game.
Andrew Tisser 32:55
So, you know, just that was just kind of a thought that I’ve had Recently doing some research on income distribution. Now that’s really interesting. And I think powerful as a message. And some people also don’t think about, you know, if you do drop down hours, you may not be taking as much of a hit because you may be dropping your tax bracket. So there’s just so much there’s so much that can be done as far as designing a life you want as a physician. And I think people just get into this mindset of feeling trapped by a lot of external factors. So thank you for all that. I think we’re running out of a little bit of time here. So I want to just transition the show to get to know you a little bit better. So, Travis, do you do you have a book recommendation for the listeners?
Travis Hornsby 33:45
It’s a little not financial related, but the great influenza by john Barry. So it’s talking about the it’s basically the probably the most comprehensive, historical kind of account of the pandemic of 1918 So with all the craziness going on in the world right now with Coronavirus I thought that was a really interesting read maybe as a as a financial book
you know probably
probably probably something like the elements of investing but Burt malkiel or
Oh boy, I mean I rather than books I tend to recommend blogs because I mean that’s kind of like the books of the the 90s or something right? It’s telling somebody go read it go read a blog so I mean, I think you know mister money mustache you know, our sites you know, implanted calm for just student loan related stuff. You know, physician on fire. my coat investor, choose fi calm, has a couple options. Cool. Great. And what do you like to do for fun? Great question. Uh, sit at home and watch Netflix because that’s the only thing We’re allowed to do I like to go to the I like to go to the zoo, and the Botanical Gardens of Missouri and St. Louis. And we’re live so I get I get really calm walking around looking at looking animals looking at flowers and things like that. So I mean, I’m kind of like a, I guess a want to be botanist, zoologist, I guess. And I like camping and, and and dancing with my wife.
Andrew Tisser 35:33
Well go into the zoo is I think you win for most unique answer to what you’d like to do.
Travis Hornsby 35:40
I’m a little weird.
Andrew Tisser 35:41
No, that’s awesome. All right. Well, if if people either like your message or want to learn more about you are interested in doing a consultation with you How can they find you?
Travis Hornsby 35:52
Go to student planner.com And then you can go to school and planner comm slash help if you’re interested in booking a consult with one of the members of our team Or myself. And it’s just, you know, we’ve advised close to a billion dollars of student loan debt. Now. I’m excited to say we’re the top rated company in the student loan industry as well. Pretty close to a five star rating for like four or 500 reviews. So we really know what we’re talking about. And we can really get you a professional opinion, if nothing else, just a second, look at making sure that you’re not, you know, in line to make any big mistakes on something that’s basically a mortgage on a house, right? So it just depends on it that makes sense to somebody to get a professional opinion for the price of a doctor visit basically. And if it does, we’d love to help you and and, you know, we have a lot of free resources like our student loan planner, podcast and our blog if you’re, if you’re, you know, if you can’t afford that.
Andrew Tisser 36:48
Awesome. Well, I think that’d be a great resource to listen to. So it’s been fun. Thank you again for agreeing to come on the show, Travis. I definitely learned a few things and I pride myself And being pretty knowledgeable in these matters. So thank you for that. And I think we’ll talk soon.
Travis Hornsby 37:07
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