Doctors Free of Student Loans: Dr. Karl Slazinski
It’s time for another edition of Doctors Free of Student Loans! Not going to lie, these are some of my favorite posts on this blog. I love hearing from all of these successful doctors that are kicking student debt out of their lives and taking charge of their finances! This week, I’d like to feature Dr. Karl Slazinski. Karl was kind enough to write in and share his story. Karl is a hospitalist and has achieved the major feat of paying off over $200k in loans in a little over 2 years! So without further adieu, welcome Karl!
Mount Ranier Waterfall
Please tell us a little about yourself.
I’m Karl Slazinski, a nocturnist (hospitalist who only works overnights), and I work in the non-profit private health care system where I did my residency. I immediately went full time upon completion of residency in 6/2016.
My partner has no student loans because of going to school in an ultra-low-cost school (Universidad de Puerto Rico) for undergrad while living with family, and he works full-time as a medical interpreter. That person you call on the phone or tablet when you need to talk with someone who speaks Spanish? That’s him!
Great! Welcome! Please tell us about your family. Do you have kids? Do they have any educational expenses?
I always make the joke, “I don’t have kids, I have disposable income!”
But I’m an insanely proud uncle!
What are your hobbies and your passions other than medicine?
I play the double bass, although I have not been in an orchestra since my Master’s at the University of Florida.
I’m a big nerd, love watching documentaries (I’m the master of useless knowledge!), and I enjoy gaming.
I am a massive foodie, and love learning about all types of cuisines and foods.
My best friend and her husband are our travel partners, and as she is also a hospitalist, we can make two international trips a year, as well as several smaller ones. When I see people I know, they always want to know “where I’m off to next!”
I also work on my side hustle (hopefully becoming a real estate mogul).
Family at Halloween
You’e a Gator! I’m a Bulldog but that’s ok, we can still be friends! That’s an adorable picture of your family.
Dr. Slazinski's Student Loan Story
Please tell us about your student loans: How much student debt you have? How long did it take you to pay it off?
When I graduated from my relatively-low-priced medical school in 2013, I had taken a total of $208,693.54 in loans. I had a small amount of support from my parents during medical school, but it was essentially food and electric/water. I actually had to beg my mother for a short-term $2,000 loan to move back to Florida and pay rent until I got my first check as a physician.
$26,903 was subsidized, so I did not have to pay interest during medical school or residency, but that started accumulating the minute I finished residency. All of the loans had a 6.5% interest rate, which was the normal federal rate at the time. I then used the “Pay As You Earn” (PAYE) income-based repayment plan as soon as I could enroll. I paid about $300 a month during residency.
I paid a grand total of $41,214.59 in interest, making the full amount I paid back $249,908.13. I received my “paid in full” letter on 11/30/2018, taking me 2 years and 4 months.
I did not refinance, although I should have the minute I got out of residency. I paid it off early because gone are the days of low interest rates. Now it’s second only to credit card debt!
Yes, I totally agree student loan debt is not good debt and should be paid off! That’s amazing you were able to pay off so much debt in a little over 2 years!
How did you do it?
I recognize that I live in Florida, which has no state income tax, and the cost of housing is generally much cheaper than most places in the US. I chose to complete residency in Clearwater, FL, which had reasonable rents. I also do not have children. That being said, I have not received one penny from either of my parents since I graduated from medical school. I have had no inheritance of any kind. I did have what was not covered by scholarships for my undergrad and masters paid for by my parents, for which I will be forever grateful.
I embraced living within my means many years ago, watching a physician squander his money over and over on failed business deals and get-rich-quick schemes. I never again wanted to feel stressed about money in that way.
I rented a room in a home for $400 a month including utilities for the first 2 years of residency, and then moved to a $800 a month 2 bedroom apartment alone. I endeavored to save money, and started moonlighting the instant that I got my unrestricted license. By the end of residency, I had saved an entire year’s net salary, even while I went to Italy and Germany, took several domestic vacations, and bought myself a gaming desktop and laptop.
I found out about the backdoor Roth IRA at this point, and started funding it in my 2nd year of residency. I learned about taxes, and soon learned how to write off appropriate expenses. I started reading a lot more about financial freedom and found the White Coat Investor, and started to formulate my plan for financial independence despite having already been living in a similar way. I used PAYE during residency and did not put my loans into forbearance (although I couldn’t pay anywhere near the $2,100 a month they wanted).
Then I rented a nice but small 2 bedroom home when I got out of residency, and stayed there for 2 years until I could transfer to my ideal site. By then I had saved a down payment, and purchased basically my dream home in January of 2018 at 3.25% on a 15-year fixed mortgage. (I am saving $90,000 in interest over a 30 year!)
I had a plan to live on half or less of my net income. I just did not let my standard of living increase by much, and again, low housing costs and taxes. Also, our pay is structured so we get a base salary each month and then RVU production is paid quarterly, meaning that I live on half of my base salary and the production is the big “moving and shaking” money.
Since buying my home in January, 2018 and paying off my loans in November, 2018, I bought a small investment property in December, 2018 that cost me $125,000. I just had a quadplex fall through because of inspection problems that was about $300,000. Obviously, the low cost of real estate relative to most locales has played a huge part in my ability to achieve these goals so quickly.
Wow, that’s amazing! You have paid off your student loans, bought a house, AND an investment property barely 3 years after finishing residency! What a feat.
Many people grapple with whether to pay off debt or invest with their saved income. Did you invest for retirement during debt payoff? If yes, what percent of your salary and why?
Absolutely! I do not max every format available to me, but I do 6% with 3% match to the 401k, and every year I max my backdoor Roth. I also have been in good health, so I have chosen a high-deductible health plan with a health savings account (HSA) which has accumulated $15,000 and will be growing for the future!
Excellent. What are you investing in now?
I did the math, and decided that if I could own 15 paid-off rental properties, I would make at least $150,000 a year just from the rentals. This is in contrast to putting the same amount of money into stocks, which are volatile and have differing tax benefits and would not provide such a rate of return. However, it will be more hands-on and not necessarily ideal for everyone.
I also decided that I want to make this happen within 15 years.
Words of Wisdom
What advice would you give yourself during medical school?
Honestly, not a lot immediately comes to mind. I didn’t live extravagantly, but I didn’t live quite as frugally as I could have. I think that a Spartan lifestyle isn’t really ‘worth it’ when already putting yourself through the intensity of med school.
I would say, “Start learning about taxes and real estate now.”
I agree, finding a balance and not depriving yourself is the key to making it out of medical school! What advice would you give yourself during residency?
Fund a Roth IRA your 1st year into residency.
Make sure to get the sign-on bonus for your first job!
What advice would you give yourself during your first few years as attending?
I’m still there (almost 3.5 years out)! I obtained disability insurance as I was completing residency, so the rate is as low as it could possibly get.
REFINANCE THOSE LOANS ASAP!!!
Keep your eye on the prize. Right now, I keep coming back to buying a convertible. I know it’s silly. I know I shouldn’t do it. I know that the convertible I best fit in is north of $70,000 even 3 years old and used (I’m 6’ 4”), and it’s ludicrous to spend a down payment on two rental properties for a car… Karl, DON’T DO IT!!!
Life After Paying Off Student Loans
How does it feel?
I really love where I am financially. Living on half of your net base salary means that you can basically do what you want, when you want.
As I move forward, I am hoping to keep up the momentum. I do not want to succumb to my innate fear of the unknown/having too many possibilities, and end up sitting on the money instead of trusting myself to recognize the right deal and just pulling the trigger.
What are your plans for the extra money in your budget now that your loans are paid off?
I keep it and let it balloon, and the minute I see the right property, I buy it! The luxury of time is magical, and keeps you from making obvious missteps — though no one has a crystal ball!
Any parting words?
Everyone should really consider moving to a place that they would like to live in that has a low cost of living and will not make you hit the SALT tax deductions under the new tax laws (in other words, a low state income tax and low property tax). You can literally take a month-long vacation with the savings on most physician’s income/house deductions that you are losing by not living in those areas.
At some point, you have to decide what you really care about, and use that to guide your financial goals. For me, it’s to be ABLE to retire at 50 (though I don’t think I will), but also to live fabulously throughout the whole journey.
Congratulations on your many accomplishments Dr. Slazinski and thank you for sharing here!
Are you feeling super motivated to pay off your student loans? Don’t forget to subscribe below to get your free copy of the Ebook 10 Simple Steps to Annihilate Your Student Loan Debt!
Till next week, TFP tribe!
Stay Frugal, ya’ll,
P.S. Are you a physician who has paid off their student loans and would like to share your story. Please reach out to us through the ‘Contact Me’ page so we can share in your financial accomplishments.
Standard Discliamer: Not meant as individualized financial or medical advice.