Stupid Debts and the Doctors Who Love Them

I get a lot of comments and emails from docs, and spend a fair amount of time on both physician-specific and financial forums. I’m often surprised to see doctors carrying debt that I see as completely unnecessary.

A Car Loan

If you are a doctor with a car loan, you probably have terrible money management skills. The status symbol isn’t driving a fancy car; it’s driving a paid-for car.

Credit Card Debt

If you are carrying credit card debt, you are somebody’s awesome investment. As my 6-year old will tell you, interest is something you should get, not give.

An Emergency Fund and Debt?

If you are already in debt, YOU’RE ALREADY HAVING AN EMERGENCY. Your emergency began several thousand dollars ago. Use the emergency fund to take care of the emergency and pay off that credit card.

Debt Management?

Most of my financial success comes from the fact that I lived well below my means, eliminating much need for debt. The recipe is (almost) always the same- make a lot of money, save a big chunk of it, and invest it in some reasonable manner.

Long Student Loan Repayment Terms

One issue with a long-term student loan is that you get a crummy rate. Sure, 5.5% beats 6.8%, but if you were going to pay it off in 3 or 4 years, not only could you get a 3.5% fixed, but you would probably be comfortable with a 2% variable rate.

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