The Best Ways to Tackle Student Loan Debt – Episode 148

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[00:01] Welcome to the prosperity podcast fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street Here’s your host best-selling author Kim DH Butler and no BS money guy Todd Strobel Hey everybody, welcome to another edition of the prosperity podcast this is no BS money guy Todd Strobel and we’ve got a special guest for you today and Those of you who are our regular listeners to our show know that we don’t bring a whole lot of additional people in but When we find somebody that has a message that really resonates with us Sometimes we just we just have to beg these people to come in and talk to you and fortunately today We’ve got Sam Denton who’s the president of Denton wealth strategies with us today. Welcome Sam

[00:49] Appreciate the invite Todd so glad to be here man Avid listener of the podcast with you and him and certainly believe in what y’all are doing Across the country and very glad to be a part of it super. Well Sam specializes in helping medical professionals doctors specifically to deal with student loan debt And a lot of people think oh, you know the doctors You drove driving the Porsche and living in the big house and they don’t really appreciate what it takes to become a doctor these Days the miracles that we now take for granted in the lifespans that we now have Are because of the dedication of these medical professionals and they have to go through so much to get there Recently like in the last eight months ago

[01:36] my mother was diagnosed with stage 4 cancer and the Oncologist basically gave her a referral to hospice and said that they would try to make her comfortable Well, they have a policy at this oncology office that every doctor has to review every new patient file each week and There was another doctor there who had actually invented a medical robot she’s one of the top surgeons in the country and She said told my mom that if my mom would put faith in her that her and her robot would be able to cure this cancer after being told that there was nothing that could be done and It took about eight months and the woman operated on her for 12 consecutive hours with a robot that actually allowed her to lose one half ounce of blood in

[02:27] 12 hours of surgery and I’m happy to say that as of yesterday, she’s been certified cancer-free. So I have so much respect for what these doctors have to go through But can you imagine the knowledge and the cost that these people have to put in? You know a lot of professions you can kind of work your way through or go part-time I’ve never heard of a medical professional that can do that of you No, not at all and just the way that health care legislation is going the innovative technology that’s being discontinuously Surpassing this industry. I mean it really blows my mind with the knowledge They have to go through a medical school private residency and just the years and years of training that their profession has to go through

[03:12] It’s truly mind-boggling. It it it it really is. So while these people are Doing miraculous things and they’re working huge amount of hours and they’re making our lives better a lot of times They kind of neglect areas of their personal life and one of the biggest areas they neglect is the financial side of things They’re so wrapped up in what they’re doing and what they specialize in that they don’t optimize their money We like to that’s our favorite word here is to optimize to do the most The most jobs that we can with every dollar that we have and that’s where Sam really is going to give some advice today To those of you out there who may fit this category And I imagine this would be applicable to anybody who has a lot of student loan debt in particular, right Sam

[03:59] Most definitely. I mean, it’s just crazy how 43 million Americans have student loan debt and you know thousands of thousands of doctors or After they finish residency have an average student student debt loan balance of over $180,000 and for a lot of Practitioners that’s more than their annual salary including a bonus. And so the student loan debt is a huge problem It’s larger than credit card debt auto loan debt It’s second only to residential mortgage debt at 14 trillion student loan debt is at one point almost 1.4 trillion now And it’s growing by three thousand dollars a second and so you know, it’s just the numbers are massively amazing and Professionals like doctors are so immensely into their profession for what they do on a day-to-day grind

[04:54] Where they’re working 12 to 18 hours a day it seems like and so putting a strategy in place for this You know, like you said just maximizing opportunity costs and having your dollar more more than one way as huge dividends You know with their financial landscape Super well, tell us what what would be your first piece of advice that you would give our docs out there? Yeah, well, I mean just we you have to start saving for yourself Because when you have student loan debt and there’s so many different debt strategy that you could do you could refinance you could You know do certain income based loan repayments You could you know do your residency in the military and they pay for some of the debt back

[05:35] But you don’t take advantage of being in control of your money because when you’re when you’re trying to snowball a debt Truly that financial institution or the government which is largely taking over the debt now They’re still in control and you’re sinking those dollars into an asset It is essentially like a black hole that you’ll never get a return on those Yes, you know that will pay down the debt faster, but you have to pay yourself first And so there has to be an offensive strategy and it defends the strategy as well, too So and you could look at Wall Street you could say that look at saving money in our banking system But just as you guys talk about all the time on your show whenever you structure a mutual life insurance policy

[06:17] For your benefit now and use those savings and those tax features for yourself You can utilize the loan provision to pay down public debt and transition that into private debt with an insurance company and so and I could certainly go more into that but you have to really put a plan together with your cash flow and Just start attacking that debt But after you start a system of savings first and that’s where you’re in control Not the banks not the government not the institution that you’re paying the debt down to and so it’s all about What do I need to do to put myself in control? Number one and have my dollars work for me and more than one place which is definitely number two on the left Wow, that makes up so much sense. I love the way you divide it into offensive and

[07:09] Defensive and I’m thinking of boy after you’ve put in all of that education and you go to work You know ensuring your human life value for the potential that you have to make with all of that knowledge is not a bad thing either Yes a hundred percent and you know as I’m sure the listeners know me we have so much debt in our economy the student loan Debt will continue to increase the mortgage that will continue to increase I’m not a prophet, but my guess is that the government will have tax payers Be paying down that debt or indirect cost of inflation. It will affect us in some kind of way So saving money in a vehicle that has guarantees There’s tax efficiencies and you have a liquidity to your money that can grow tax-free

[07:53] They’re just going to have tremendous benefits not only now but later down the road and also when we’re borrowing from a source like either a bank or Now the government has 45% of their assets in student loan debt Which is mind-boggling because they get over 50 billion dollars in revenue per year But when we’re borrowing from them, that’s an inflationary source to borrow money And so that just increases the cost of capital the cost of goods and services to go up over time And so whenever we borrow from an a non inflationary source to Reconsolidate or pay down their debt with a mutual life insurance company number one It’s just better for our economy number one So we’re staying green and number two it allows us to utilize those loan provisions

[08:41] Which is a non recourse loan its simple interest it allows us to pay it back Obviously, we want to be a quote-unquote good Banker or pay it back down as quickly as we can to take advantage of opportunity costs But it doesn’t report to credit bureaus which really inflates our economy with young doctors getting out of residency school and you know if they miss a payment it affects their credit score which can hinder their purchases and Buying a home a car you name it So really getting out of the umbrella of our credit system and going over to a different system of finance and mutual life insurance company you use so many unique terms it just fascinates me Why don’t you give us just a little bit more of an explanation of inflationary versus non inflationary?

[09:28] Well, yeah, exactly I mean, you know whenever we’re borrowing money from a bank or I mean even a lot of these loans are now backed by the federal government, I mean when they Instituted the Affordable Care Act part of the 17,000 pages in there was saying hey that the private student loan market of commercial banks and lenders We’re really not going to be players anymore and so the federal government is taking over that whenever they Utilize that money whether it’s from grants or from getting money from you know certain bonds or the Federal Reserve Bank They’re borrowing money which causes them and and other banking institutions just to increase the supply of money Which in turns it it’ll just cause the cost of of eggs of gas of milk of homes of everything to go up

[10:19] I mean, that’s what had happened since our dollar has been off the gold standard since 1971 and so it all goes back unfortunately to the Federal Reserve Bank It just causes them to print more money whenever Governments and banks borrow more money to finance with this topic finance college education for medical students and so whenever we’re borrowing from an insurance company They’re not choosing to I mean they don’t have printers that in Boston, Massachusetts or nearby to Inflate the cost of goods, you know now we are interrupting and insurances Investment portfolio, but they make money off of the loan provisions They’re not going to and they’re not an inflationary source to where they can increase the cost of good services

[11:08] across the country insurance companies don’t act that way banks and governments cause inflation to rise because they’re They’re printing money and which in turn shortly just increases the value of our standard of living Got it. I think it’s so many times. It’s easy It’s easy to say well the government is paying for that or the federal government or whatever you want to say But really intrusively they have no money in and of themselves It’s the taxpayer who ultimately pays and then the point you bring up is not only do we pay through taxes? But we pay through inflation because our dollars don’t buy as much as they did yesterday Right a hundred percent yet, you know taxes Really right now are some of the lowest in our history that they’ve been lower before

[11:57] But right now they’re very low Even though it seems like we’re paying 40 to 50 cents on every dollar to uncle Sam But I can only imagine with your massive debt that we have the student loan bubble, you know will cause tremendous impact on How taxes will be relayed down to the individual consumer down the road and inflation as you know As y’all talk about on your show is just it’s just hit in taxation where things just continue to go up and go up and go Up and you know, it forces people either You know make more money Spend more money in order to try and offset the inflation that’s really impacting our financial portfolio So far listeners out there would you are you mainly looking for doctors who are out there making money?

[12:45] Practicing now or do you have any tips for people who are maybe still in school or Where what where’s your primary focus? Yeah, so I mean, I’m I’m working with you know Physicians assistants all the way to doctors making a large amount of money and having a large amount of student loan debt And so, you know if you’re focusing on people in residency, you know I would certainly try to encourage people to get seek education out right now and get a strategy in place while you’re in residency because when you’re in residency you’re losing opportunity costs because even if you’re Your loans only increase by 10% margin along with the little capital That they’re getting paid during residency compared to an average college graduate or they graduate four years

[13:33] And then they find a job where doctors they go to residency and have a number of years of schooling And so they don’t have time to save or pay off the debt at the same time. So get educated now And there are certain private institutions Online or student loan debt for doctors different pay down structures and things of that nature But it mainly when doctors come into play you have to figure out just kind of like how a business does What are your assets and liabilities and what are your cash flow? And so putting a large percentage of your cash flow into this type of insurance plan has a lot of value because Obviously getting a savings that guarantees the tax efficiency is going on and also student loan student loan debt

[14:18] Can be re casted or re amortized whenever you put a lump-sum balance towards it every single year So I’m teaching people to borrow against that cash value put a lump sum towards the student loan debt so obviously the debt balance goes down by whatever lump sum we put there and then you can call the financial institution and have Them to re amortize and recast the debt meaning that the payment will go down the next month You know as well too. And so it’s a it’s a dual strategy there as well. That makes sense super Well, I’m sure there’s just tons and tons of information That’s available out there. What what’s a good resource that you would recommend somebody to go to next to learn more about this

[15:03] Well, I mean there’s plenty of Websites available. I mean one of those is the student debt loan hero really talks about how medical professionals either can You know pay down the debt as fast they can take advantage of some income based repayment programs Even some military options out there. I have some things on my website And then more strategies about from flash debt reduction And and also just looking at the American Association of medical professionals As some good information down there that will break down opportunity costs, which I haven’t seen in any websites But they’re breaking down opportunity cost that is lost compared to an average graduate that’s going to school for four or five years and getting a job so

[15:48] Just those couple sites that can really Bring a lot of value to medical professionals right now when they started their practice or even in residency right now Super well Sam we certainly appreciate you and we appreciate debt and wealth strategies We appreciate our medical professionals out there who have done so much to make our lives better This is no BS money guy for the prosperity podcast saying take care everybody. We’ll see you again soon Thank you for listening to the prosperity podcast to take control of your money and have it work for you Visit us at partners for prosperity calm if you liked this episode make sure you subscribe and leave a review