I graduated with a massive $107,500 in student loan debt. I was initially planning to pursue the Public Service Loan Forgiveness (PSLF) program. However, my plan backfired and I decided to aggressively pay off my loans as soon as possible.
Within 2 years into the start of my repayment, the total amount paid back was over $115,000 in principal and accrued interest. I worked 56 – 64 hour weeks and managed to allocate 75-90% of my monthly income towards these loans, but it could not have been done without a personal loan from my wife and my mom.
As I was no longer paying hundreds of dollars in interest per month, my high savings rate allowed me to not only pay my wife back relatively quickly. I only have one remaining debt left and that is a $30,000 personal loan from Mama Flexcents.
For the complete breakdown of how I paid off over $100K within 2 years, click here.
Strategy to Paying Back Mama Flexcents
I quickly found out that my mom had a difficult time accepting any cash or check. I eventually concluded the most effective method for me to pay her back was to fund her retirement. I opened a Traditional IRA for her which I am maxing out at $6,500 per year.
She is very conservative, so this strategy provides her the opportunity to build a larger nest egg without taking risk as I will continue to fund her account until its value and associated tax refunds reach $30,000.
My Progress To Becoming Debt Free Updated 9/23/2018
Personal Loan Debt: $30,000
Current Progress: IRA Value + Tax Refunds = $15,851.34
December 2020 Goal: IRA Value + Tax Refunds = $30,000
Major Money Moments:
May 2011: Graduated with my bachelors of science in kinesiology with $9,500 of debt. Saved $10,000 working throughout high school and college. Decided not to pay off my subsidized loans and use the money I saved to survive in grad school.
May 2014: Graduated with my Doctorate in Physical Therapy with $107,500 in student loans when totaling principal and interest.
July 2014: Enrolled in the Public Service Student Loan Forgiveness (PSLF) program.
September 2014: Obtained my first PT gig, which was the best and worst thing that has happened to me.
December 2014: Entered Student Loan Repayment Under the PSLF program
July 2015: I finally proposed to my wife after being together for 10 years!
November 2015: Needed to leave my first job and decided to forget about student loan forgiveness.
December 2015: Transitioned from outpatient PT to working in a SNF. Began paying off my student loans as aggressively as possible.
October 2016: Paid off my $115,000 student loan balance with help of very generous personal loans from family and no longer owe the federal government money. I also got married!
February 2017: Began learning about investing leading me to contribute to my 401K and IRA. Experimented with robo-advisors and began using the free trading platform, Robinhood.
June 2017: Started a new job in home care PT. Paid my wife back $10,000, effectively reducing my personal debt from $40,000 to $30,000.
July 2017: Finally achieved a positive net worth in cash and investments! I highly recommend personal capital as a money management tool to track your net worth and much more!
November 2017: My mom had difficulty accepting any money to pay her back, so I opened an IRA with her approval to fund the account until it reaches $30,000.
January 2018: Learned about the concept of financial independence and developed a plan to FI/RE by 40.
April 2018: The birth of Flexcents!