The Physician Philosopher Podcast

Paying Off Debt or Investing for Physicians

I can’t tell you how often other physicians ask me, “Hey, I understand the math, but I just don’t know: should I be paying off my student loans? Should I be investing and maxing out my 401k, or should I be paying off a car?”

Physician Disability Insurance

Before Lisha and I dig into this very popular topic, we want to drop this reminder about net worth. Your net worth is calculated by subtracting your debts from your assets. So if your goal is to build your net worth, then guess what? 

I’m proud of you for even asking the question of investing versus paying off debt, because taking either one of those actions in personal finance is winning.

How should you manage your physician debt? It depends

Maybe that’s not the most satisfactory answer, but it is the truth. 

There’s advice out there that says you should invest at all costs, that anyone who doesn’t put all their money towards investments is crazy or not good at math. Then, at the other end of the spectrum is the school of thought that says you shouldn’t do anything else until you pay off all your physician debt.

As with most nuanced subjects, it’s not black and white. 

The right path – for YOU – depends on a lot of different factors, like your age, how much you’re already investing, why you want to invest, what you’d want to invest in, how much debt you have, the type of debt you have, the likelihood of your debt being forgiven, and more.

When figuring out whether to pay off debt versus investing, it requires more than just math, because humans aren’t robots. 

You’ll learn:

  • Important questions to ask yourself to help you gain clarity around your financial goals
  • How to use your own background and risk tolerance to create a solid financial strategy
  • Our individual opinions on debt interest rates and how that plays into debt vs. investing
  • The difference between investing your money and just putting money in a brokerage account
  • Why you should take advantage of retirement match options and double check your existing 401k and backdoor Roth accounts

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