Home > Article about me in national magazine

Article about me in national magazine

May 28th, 2007 at 12:55 pm

I've referred to this article in a couple of posts and several people asked if they could read it. I was hesitant to post a direct link because of the personal info, full name, town, etc. So instead, I've copied it here and edited out my last name and exact location. I've also removed the source, but it was a national financial magazine geared toward those in the medical field.

Keep in mind that this article was published over 3 years ago and was written about 6 months before that, so it is nearly 4 years old. Our numbers are even better now as my student loans are gone, DD's 529 is over 21K, we are still driving the same 2 cars mentioned, our investments have nearly doubled to 390K and we now save 18-20% of income, not 13% like in the article.

How this young doctor keeps debt at bay

Mar 5, 2004

This 39-year-old physician has school debt, a house, and a family—yet he's squirreled away more than $200,000.

Family physician Steven G. is a happy camper.
He's 39, he's paid off most of his medical school debt, and his savings are growing. He's on track to have college funds and retirement savings ready when he needs them—and that's on a salary of about $105,000.
No, you won't find the G.s shopping at Neiman Marcus. "Some doctors drive fancier cars or live in bigger houses," says G.. "We live below our means. But we don't feel deprived. We enjoy today, but we prepare for tomorrow."
G. has come a long way. He graduated medical school in 1990 with about $102,000 in medical school debt. When he married two years later, the newlyweds' joint assets totaled about $6,000. Now they're up to about $200,000, not including their house, cars, or collectibles.
G., who started practicing in 1993, is an employee in a two-doctor urban office. He and wife, Marci, 40, a homemaker, and daughter, Jennifer, 8, live in a three-bedroom colonial in New Jersey.
Other than a $10,000 gift from G.'s mother toward their down payment, Steve and Marci have built their own stash. And G. predicts he'll be set for a comfortable retirement around age 62, after paying his daughter's college education.
Determined to wipe out med school debt
G. vowed to wipe out his debts early on. In 1994, after he'd been in practice for a year, his Health Education Assistance Loans totaled about $62,000. That year, he started making extra principal payments (an additional $450 a month on top of the $225 due). Then, in 1999, he took out a home equity loan of $28,000 to pay off his car and part of his student loans. Those HEAL loans are down to about $11,000 now. The home equity loan has a $25,700 balance and 15 years left. "Once the HEAL loans are paid off, I'll have a chunk of money to put toward the home equity loan," he says. "I'll pay off all my debt way ahead of schedule."
G. also began saving early. "We started putting $50 a month via automatic deposit into our first mutual fund in 1992, and increased that amount as my income rose," he says. The account is now worth about $22,000. The G.s have since added other funds and investment accounts, IRAs, and a 529 plan. Currently, 13 percent of G.'s gross pay goes toward savings and investments. Some large financial goals are looming, and the G.s aim to be prepared. "Our daughter will have a Bat Mitzvah in about five years, which we expect will cost about $20,000," says G.. "Five years later, she'll head for college."
Rather than take a loan or charge the expenses, G. plans to save for both the Bat Mitzvah and college. "The 529 plan we started last July now has about $3,000," he says. "Once my HEAL loans are paid off, I'll redirect some of that money into the 529. I expect to have about $75,000 by the time Jennifer starts college."
The G.s do use charge cards, but refuse to carry a balance. That keeps them from spending beyond their means, and from throwing away money on interest charges. "Credit cards can be the bane of existence for many people," he says. "We can't see spending first and then paying off; we save first, and then pay for what we want."
Despite their frugality, the G.s don't neglect charitable giving. "We donate money and volunteer our time and services to our synagogue, and support our local public television station and my undergraduate college," he says. They also donate old clothes, toys, books, and household items to Purple Heart Veterans, Goodwill, and other causes.
Taking frugality as a way of life
What's G.'s secret? Attitude.
"We are not into status items, and we're not upgrade happy; once we buy something we stay with it," he says. "But we don't feel like we're sacrificing. Marci and I enjoy our lifestyle."
The G.s will buy top quality items that are important to them. "We both love to cook, so we have Calphalon pots and pans, and KitchenAid appliances," he says. "We also have an extensive collection of Walt Disney memorabilia, and have spent thousands of dollars on it over the years. They're obviously not necessities. For things we don't consider a big deal, we buy something functional," he adds.
Take cars, for instance. The G.s own two that they bought used: a 1998 Toyota Camry LE and a 2000 Toyota Sienna LE minivan. "The Camry was a dealer demo, and had 11,000 miles on it when we bought it," he said. "I plan to keep it for another five to seven years." The minivan was two years old when they bought it last year.
"Our living room has had the same old furniture and IKEA bookshelves for the past 10 years, interspersed with some new pieces," he says. "Our house is nice, but it's not a mansion." The G.s intend to stay in their current home, although they may remodel or add on to create more space.
Finding bargains and getting the best prices also help the G.s' saving campaign. "We shop carefully," he says. "We buy some food items at Target because they're cheaper than at the supermarket. We'll pick up things at yard sales or thrift shops. Especially when my daughter was young. Why pay full price for overalls that she'll wear for three months, when you can get them for $1 at a thrift shop?"
The G.s take out novels from the library rather than buy them at bookstores, although they purchase reference books new. The family usually eats at home. "We prepare most meals from scratch. It's healthier and cheaper than dining out." And the G.s don't pay for any household help.
Vacations also reflect the G.s' stretch-your-dollar philosophy. They spend at least one week a year in Disney World, "but we stay at a $39-a-night motel two miles from the park, rather than on-site, where it could cost several times as much," he says. This year, they spent another week in Massachusetts. "We stayed at a Marriott using Rewards Points earned on our charge card."
But they also splurged. "One weekend last year, for our anniversary, we stayed at a luxury hotel in New York, ate at fancy restaurants, and went to a Broadway show," says G..
Steve and Marci have a crucial advantage: They have similar attitudes toward saving. "There's no way we could have accomplished what we did if one of us was a spender and the other a saver," he says. "We can't think of a single instance where either one of us wanted to blow money on something ridiculous and had to be talked out of it."
No financial advisers need apply
The G.s don't use a financial adviser. "We got a financial analysis done twice—in 1996 and in 2001—by our insurance broker," says G.. "The most recent one showed a very small projected shortfall for our anticipated retirement needs. But we identified the factors that will correct that gap in the near future. It mainly involved repaying my student loans and having that money for additional investing.
"I'm proud to say that our broker was quite impressed," adds G.. "In fact, he ended up telling me that I was overinsured, and he actually reduced my life insurance coverage by $250,000. It's not often you hear an insurance salesman telling you to buy less insurance!"
While the market slump of the past few years zapped G., he's not sweating. "The market correction had a big impact on paper, since we keep about 80 percent of our portfolio in equities," says G.. "But that decline came after a huge run-up, so we're still way ahead of where we started, and the recent recovery has erased much of the paper losses."
Thanks to the G.s' philosophy, they're certain they'll be comfortable later in life. "We figure that it will be much easier to live a modest lifestyle after retirement because we're not living extravagantly today," says Steve. "We hope to live at least as well, if not better—more travel, theater, fine dining. We want to enjoy retirement, not spend it struggling to get by on a tiny nest egg."

Where their money goes

2002 Total income $105,000
Income taxes $27,100
Property taxes 4,600
Pre-tax contributions to savings and investments 0

Total adjustments $31,700

Total spendable income: $73,300
Housing (including mortgage payments utilities, and maintenance) $16,000
Loan and debt repayment 7,000
After-tax contributions to savings and investments 14,400
Food and dining out 5,000
Insurance (Life and disability) 5,900
Autos (gas, repairs, insurance) 5,500
Vacations 6,000
Hobbies and entertainment 2,000
Medical and dental expenses 3,500
Clothing 1,800
Charitable contributions and gifts 3,500
Miscellaneous 2,700

Total expenditures $73,300

13 Responses to “Article about me in national magazine”

  1. homebody Says:

    Thanks Steve, good way to start my day! So your daughter's Bat Mitzvah is coming up in the next year right? Better send us all "save a day" cards so we can start saving now to make the trip! Ha Ha! Only kidding...

    Happy Memorial Day!

  2. moneycents Says:

    Great article Steve. My husband and I are also healthcare professionals and we have almost the same philosophy. We are both savers and have the same mindset as to what we should or should not spend on. I just can't believe how similiar our stories are.
    Thanks Steve!

  3. disneysteve Says:

    homebody - Yes, her Bat Mitzvah is September 2008. Sorry, but our guest list is already way too big. We're trying to figure out where to cut. If I tell DW I want to invite my internet buddies she'll ban me from the computer for the next 2 years.

  4. homebody Says:

    It's your only daughter and only Bat Mitzvah right? Just save more, you have over a year. Then when you have enough saved for that, you can finish up the college savings and get started on the wedding savings! Tell DW she's probably safe, most of us cyber friends are too frugal anyway, Ha Ha! My brother (who is a physician's assistant) seems to think all us siblings and families should go to Mexico for Thanksgiving 2008. I have consented to think about it and have notified the girls to start saving just in case.

  5. Amber Says:

    I really enjoyed this article, and you're right the secret to an healhier financial life is ones attitude

    thanks again, now I do not feel bad about driving my '89 camry

  6. disneysteve Says:

    homebody - Actually, the problem is space more than money. We know where we are having the affair and there is a finite capacity of guests we can squeeze in there and still have room to move around, dance, etc.

    Amber - How many miles do you have on that '89 Camry? I had a '91 that I traded in in '98 with 127,000 miles. If I still had that car, it would have well over 225,000 miles by now.

  7. LuckyRobin Says:

    Thanks for posting the article. It was a fun and interesting read.

  8. boomeyers Says:

    We love our '89 Camry and will drive it till the wheels fall off! We are just over 120,000. Plenty more to go! We thought we were doing good, but our neighbor has an '87 Honday with 225,000. We are amazed at the work he does on it himself!
    Congrats on the article and the great job you have done planning for your future!
    I wish we only had to pay for one college education and one wedding, but we have three girls! AHHHH!

  9. homebody Says:

    We did the same thing with a Toyota Tercel 4-wheel drive. Bought in December 1985, an 86 model brand new, six months later I am pregnant again. We kept it about 8 years because I remember OD driving it to school after she got her driver's license.... and she got a car in 1996 so....Honda Civic that she drove for almost 10 years until it got totaled, now she has another one she found has about 130,000 miles on it. MD's 2000 Honda Accord (that was in the wreck when it was about a year old) has about 150,000 miles on it and to me drives like it's brand new.

    Anyway we sold it (the silver Tercel) to my father-in-law for $1500.00 and he is still driving it, has well over 200,000 miles on it and I don't think they have done much of anything to it maintenance wise.

    My very first car, a Datsun B210 hatchback 1977 model, oh goodness.... two carseats in the back.... I sold that to my father when it had about 100,000 miles on it and he drove it until the body rusted away.

    So I learned my lesson, current 1994 Plymouth Voyager is starting to look sort of bad, but it has almost 180,000 miles on it. I'm driving it until it drops dead or starts leaking (which may be a possibility since it is really starting to get rusty on the hood).

  10. Amber Says:

    I have about 150,000 and the meter wasn't working for a while

  11. rob62521 Says:

    Bravo, Disney Steve!
    Thanks for sharing the article. This means others besides the savingadvice family can read how you can be frugal and still enjoy life!

  12. katwoman Says:

    Great article and I'm glad to see you haven't really changed your attitude over the years. It's one thing to be cheap on a day to day basis and quite another to have clear cut, long term goals in mind with a solid plan to back it all up.

    Keep up the good work!

  13. disneysteve Says:

    Thanks katwoman. We do spend more freely than we used to, but also save more than we used to, so it isn't a problem. As I said, when that article was written, we were saving 13% of income. It is now 18-20%, so if we spend more with what's left, I don't have a problem with that.

    Yes, our attitude remains the same. Enjoy today but prepare for tomorrow. I want to be able to retire while I'm still young enough to enjoy it.

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
Will not be published.

* Please spell out the number 4.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]