The College Investor’s Robert Farrington loved his job at Target. He was also well paid. But he loved his family more. So he made the tough decision to leave and focus full-time on the side hustle that was already throwing off even more income. 

In Robert’s money story you will learn:

-The value of time and how Robert made the decision to leave a job he loved in order to spend more time with him family

-How Robert grew his side hustle from no income into his full-time business

-Advice on how to leave a job on great terms

In Robert’s money lesson you will learn:

-His take on the benefits of growing a side hustle

-The specific obstacles Robert prepared for before taking the lead in his business

In Robert’s every day money tip you will learn:

-The truth behind retail shopping myths

-Quick tips on saving money while grocery shopping

-The number one Black Friday tip

Bobbi and Robert also talk about:

-Where the idea for his website started

-His regrets about leaving his job

-The College Investor and the resources offered online

-The College Investor 6 minute audio show on Apple Music

In My Take you will learn

-How to be honest with employers about having a side hustle - while not oversharing

-How spending time with family during the holidays can be more valuable than rushing out for Black Friday Deals

 

EPISODE LINKS:

Follow Robert!!

Instagram @thecollegeinvestor

Youtube @TheCollegeInvestor

Linkedin Robert Farrington

Listen to The College Investor Podcast https://apple.co/2CqMuC3 

Learn more on The College Investor website https://thecollegeinvestor.com/ 

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Transcription

Robert Farrington:
Am I really able to say that I value the time I spend with my family and stuff when I'm missing Thanksgiving and Christmas and holidays and weekends and not able to go to birthday parties?

Bobbi Rebell:
You're listening to Financial Grownup. With me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup. You know what? Being a grownup is really hard, especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey, Financial Grownup friends, get ready for an episode not really about money, but about living a rich life with your family. It's about the price of your time and the value of your time, and for many of us, not all time is created equal. Target store manager, Robert Farrington, had the money, but he wanted the time. Not just any time. Nights, weekends, and holidays, specifically, the times that most of us get to be with our families, but in retail, not so much. Fortunately, he had something else going on. More on that in a sec.

Bobbi Rebell:
First, a quick welcome to our new listeners and to our returning ones. If you like the show, take a screen grab, share it on social. Then subscribe so you don't miss any upcoming episodes, and make sure that you have it set in the settings for automatic download. With that, let us get to Robert Farrington's story. He now runs a little site. It's actually a really big deal website called The College Investor. And for you early stage entrepreneurs, it was a side hustle with literally zero income. Yes, zero income, no money coming in for the first two years, but that was a while back. He'll tell you more about it.

Bobbi Rebell:
Now, it is his full-time business and it is growing. You're going to love this story. Here is, the College Investor. It's Robert Farrington.

Bobbi Rebell:
Hey Robert Farrington. You're a financial grownup. Welcome to the podcast.

Robert Farrington:
Hey. Thank you so much for having me. I'm excited to be here.

Bobbi Rebell:
You are ... And this is trademarked, my friends. You are America's student loan debt expert. You're also the founder and editor of The College Investor, so you have a lot of knowledge to share with us.

Robert Farrington:
Whew. You kind of scare me when you say it all, but yeah. I'm excited to share with you.

Bobbi Rebell:
So give us a quick summary of what The College Investor is and then we're going to move into your money story.

Robert Farrington:
Sounds great. So, The College Investor was started by me as a side hustle in college, because I wanted to share my thoughts on how to invest. But everybody that I knew was like, "That's cool Robert, but I have student loans and other things and I just can't get there yet."

Robert Farrington:
So over the last few years, we've kind of incorporated more about getting out of student loan debt, getting out of debt in general, and how to build wealth so you can start investing even in your early 20s, or in college, so that you can build wealth and set those financial footprints in motion for your future.

Bobbi Rebell:
So, this is where it gets really cool and exciting, because you've been working on this for a very long time. You are married. You have two young children, the oldest one going into kindergarten. You were full time at Target until a year ago and this was your side hustle. And then you were able to make the decision to flip the switch and take your side hustle full time. And that's your money story. Tell us more Robert.

Robert Farrington:
Yeah. So about three years ago, I started earning more than my Target job. You know, we were just stashing the money away and didn't really have any plans to leave because you have to understand, I have loved working at Target. It was a great company to work for. I had been there a long time. I was comfortable there. I was probably one of the top performers in my area, so life was really good at Target. But there is one big drawback about working in retail and that is that you have to work nights and weekends, and holidays.

Bobbi Rebell:
Even if you were the manager by then. You were pretty senior.

Robert Farrington:
Right, but I also believe in being a leader, so I would still work my weekends with my team. I would work a night a week with my team and then as the leader, I definitely had to be there on Black Friday and throughout the holiday season. It meant having Thanksgiving lunch at like 12:00 and then going to work at 2:00 in the afternoon on Thanksgiving day, so that we're ready to go when the store opens.

Robert Farrington:
That really became hard as my kids were getting older.

Bobbi Rebell:
Okay, so tell me about the conversation that you had with your wife when this decision was made.

Robert Farrington:
It really was a series of decisions. First off, it was like, this is a cool side hustle. Let's not change anything. And then it was like, wow this is really becoming more of a thing and we can live off this business income on the side. And you don't need to work there. Finally, I really had to think about what we valued as a family. So my wife and I were talking and you hear these things like, "Show me your money and show me your time, and it will tell you what you value." So, am I really able to say that I value the time I spend with my family and stuff, when I'm missing Thanksgiving and Christmas and holidays and weekends, and not able to go to birthday parties.

Robert Farrington:
So, it was really really hard to leave something I was so comfortable with, but at the same time I also wasn't living my truth in that I wasn't necessarily doing exactly what I valued. And we could afford it. I could afford the life I wanted to, and said that I wanted to. And that really was a big part of our conversation with my wife.

Robert Farrington:
The second thing is, is contingency plans. We always had these conversations. I run an online business, so it's like, what happens if the internet goes out tomorrow? Right? Are we going to be financially okay if suddenly there is no income stream. So, it really was about planning and making sure we had enough saved and if the internet did stop tomorrow and I left my day job, would we be okay financially? And we kind of checked all these boxes and once those were all yeses, it was setting a timeline up for when does it make the most sense to leave?

Bobbi Rebell:
They knew about the side hustle right?

Robert Farrington:
It was one of those things. I never hid it, but I was never fully overt about it. It had been on my LinkedIn profile for a decade. My peers, every now and then, I'd get student loan questions from my peers. They'd be like, "I'm trying to pay off my student loans. Can you help me?"

Bobbi Rebell:
Yeah, but did the Target management know that this was producing more income than they were paying you?

Robert Farrington:
I never shared that, so I'm 99% sure that they had no idea. In fact, I know most of them didn't because when I left and afterwards, they had a little going away party for me and like, "We wish you the best of luck. We hope this all works well for you."

Bobbi Rebell:
So they had no idea?

Robert Farrington:
Yeah, and I never hid that. So that's the interesting thing. If no one asked, I was very candid. I've been candid even for the last seven, eight years online. On different podcasts and interviews and stuff, so it's out there.

Bobbi Rebell:
Did they ever think maybe we should pay him more? If he can make more from a blog, maybe we're underpaying him? Was there any kind of conversation like that, ever?

Robert Farrington:
It's hard, because I was extremely well paid. It was a nice six-figure ... I don't think people realize what you make at Target, but I was, with my bonuses and stuff, I was probably making about $180,000/year when I left.

Bobbi Rebell:
Wow. So, let's go back to quitting. So, how did you actually quit?

Robert Farrington:
So, I really did think about this and planned it out. Because I also, like I said, I wanted to leave on really good terms. I didn't want to burn any bridges, so I actually, my wife and I finalized our plans for leaving in February, or March of last year. We said we're going to leave in September. And I thought this was very respectful from the workload that was going on at Target, but it was also enough time that they could have enough leeway to have everything in place before the holiday season.

Robert Farrington:
I decided that we're going to give a month notice, so I actually told my boss in August. And I probably gave about five and a half, six weeks notice. But I was fully ... You hear these horror stories like, if they were going to walk me out that day or something crazy, I was fully prepared to leave that day. But I was going to be very respectful, and so when my boss came in August, I would say she comes like once or twice a month. When she came in, I just pulled her into my office and said, "I have something really important to share with you." She had no idea what was coming. I said, "Hey. So I have some big changes I want to tell you. I am going to be resigning and I'm going to be pursuing my own endeavors outside of Target. Spending more time with my family."

Robert Farrington:
And the look of shock, she actually texted me like four hours later. So I told her at probably 4:00 in the afternoon, so this was like 8:00 at night. She's like, "I cannot believe this. This is crazy. I'm totally shocked." I totally caught her off guard. But I gave them, like I said, almost six weeks notice. So, I felt like I left in the most respectful and terms possible. Which I also think is the best way to possibly leave if you are going to leave.

Bobbi Rebell:
What was the reaction around your store?

Robert Farrington:
Most of them were pretty excited for me. I think all my direct reports actually were much more aware of everything then anybody else above me. And so, it was less of a shock, but same thing. I'm also very diligent in how you let people know, so make sure you have a very strong hierarchy of letting my senior managers know. And then just announcing it downward. Clear communication before I even let them know. So, I don't think I let them know until about a week and a half after I let my boss know. So my boss already had some plans in place, and we were able to share some very specific plans, which I think is really important when you transition in any workplace.

Bobbi Rebell:
Are there things you would do differently, looking back?

Robert Farrington:
I honestly would probably do it sooner. It's one of those things, I was so worried about all these random variables. And I probably gave an extra year or two to Target. And like I said, it's a great company but at the same time, what could I have done in those extra year or two when I could have left longer. That's the only real regret I have.

Bobbi Rebell:
So what is the lesson for our listeners?

Robert Farrington:
I think the big lesson is, if you grow this side hustle with your time and energy outside of work instead of watching TV shows, or doing whatever non-productive things you're probably doing outside of work, you could turn this into a full-time job that you're passionate about, you love, and it works with your schedule. So, I think it's definitely a clear path that you can actually achieve if you want to put the time and effort into it.

Bobbi Rebell:
Alright, let's talk about your everyday money tip. We're going to tap into your knowledge as a retail expert, having seen it all, from the grassroots level. Tell us what people can do to save money and be better shoppers at stores, not necessarily just Target, but stores like Target. What can they know about pricing, about sales, and so on?

Robert Farrington:
Yeah. Let's debunk some of these myths first. So first off, I always love these Buzzfeed articles that come out. What digits are the last ones that you know what the markdowns are?

Robert Farrington:
Well, let's talk a little bit about math. So almost every price in retail ends in 99 cents, right? So, when you mark something down half off, it's always going to end in eight. Because that's just math. And so when you mark it down 75% off, for the third time, or the second markdown, it's going to end in a four. So, these math strategies that they say are secret hacks, is really just the math of the sales. It's true.

Bobbi Rebell:
Yeah.

Robert Farrington:
I think people just need to realize that. I think the best thing ... The other thing that people need to realize is that, almost every store Target included, puts the same things on sale every two weeks. So it just alternates, so if you're a regular grocery shopper, you'll notice this a lot. Especially in food, because one week it'll be Coke on sale, the next week it'll be Pepsi on sale. And then it goes back to Coke on sale. Then it goes back to Pepsi on sale. And it's the same sale. It's just goes alternating every other week. And you see this in almost every major retailer, so one, if you have really strong brand allegiance, align your shopping habits with your sale week and you'll probably find that you're going to get that same sale every time you go in because it will line up with your shopping habits.

Bobbi Rebell:
So you said you always have to work, you've always had to work the holidays and especially Black Friday. What's your number one Black Friday tip?

Robert Farrington:
The number one Black Friday tip is that all the ads come online about a month before Black Friday. So you can plan out all your shopping ahead of time. And you have to realize that the door busters at every store, there's only about 10 to maybe 50 of that item. And so, if there's one thing that you really really really really can't live without, if you're not the first 10 to 50 people in line, you're probably not going to get it. So don't waste your time going out there.

Robert Farrington:
The second thing though, that's really emerged over the last couple years is online shopping. So at the same time, a lot of these companies are trying to compete with each other and they're moving their Black Friday sales online and they're moving them on to the week before Black Friday. So you can get a lot of the same great deals online, but without even going to the store, about a week before you even shop.

Bobbi Rebell:
Let's talk more about what's going on with The College Investor. So this is your full-time passion project, slash income, slash growing company. You've got a whole staff there now. You're managing that now. What are you priorities? Where is your growth going to come from? What can people expect and look forward to there?

Robert Farrington:
So if you want to know anything about getting out of student loan debt, and starting to invest, The College Investor has it for you. We have pretty much every topic around student loan debt covered and you know, sadly as much as I don't want this to be the growing reason for our growth, student loan debt in America is growing and it's such a problem for most people. So we have your answers. We have tools and resources that can help you. If you don't like to read, you can also listen to The College Investor audio show. It's a podcast where we change our written articles into a short digestible audio show for you because I know-

Bobbi Rebell:
You love that. Love short.

Robert Farrington:
Yeah.

Bobbi Rebell:
Yes. I love that.

Robert Farrington:
Short. I mean, I think I beat you because my average show time is like six to eight minutes because we're just talking about the daily article of the day.

Bobbi Rebell:
But that's perfect. That's what people need because everyone's busy. Alright, where can people ... People can obviously reach you at The College Investor, but tell me your social channels et cetera.

Robert Farrington:
Yeah. You can go to thecollegeinvestor.com. You can go to The College Investor audio show. You can find us on YouTube at The College Investor and you can find us on Instagram at The College Investor.

Bobbi Rebell:
Love it. Thank you Robert.

Robert Farrington:
Thank you for having me.

Bobbi Rebell:
By the way, that pricing math that Robert thinks is so obvious to everyone, I had no clue. What about you?

Bobbi Rebell:
Here's my take on what he had to say. Financial Grownup tip number one. If you have a side hustle, follow Robert's path and be open about it at work. You don't have to be too open. When I went to write my book, How to be a Financial Grownup, the first thing I did was tell my managers and get their okay. Don't hide things. But then also, don't work on it during your work hours and you can be open about your plans, but you don't have to share the whole big picture and all your grand plans.

Bobbi Rebell:
Financial Grownup tip number two. I love that Robert chose family over spending time working on the holidays. The same can be said for shopping. Before you race out to get one of those amazing, say Black Friday deals, remember that Robert said, and a lot of you know this already, there are very few available. So, you'll have to get here really early and spend a lot of time, invest a lot of time, to get it. So is saving money really worth cutting into your family time on a holiday? Maybe look online, a different day, ahead of time and set a price alert. Then, if you get that alert, you can spend five minutes buying it online and get back to being with your family. Or, maybe what you have is fine and you don't buy it at all.

Bobbi Rebell:
Before we wrap up, tell me, I want to know, what's your best retail shopping tip? DM it to me. And please, take a minute to follow me on social media. I am @bobbirebell1 on Instagram. bobbirebell on Twitter, and Bobbi Rebell on Facebook. The website to get more information about the show, bobbirebell.com/financialgrownuppodcast and for the show notes and more about Robert and the The College Investor, go to bobbirebell.com/podcast/robertfarrington and thanks to The College Investor's Robert Farrington for bringing us all one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.

The Opposite of Spoiled author Ron Lieber dishes on the underground network he tapped into as a teen to ace the financial aid game- and gives a sneak peak into his next book “What to Pay for College".Plus Ron’s secret to getting hot tickets at below market prices- Including the Cubs.

In Ron’s money story you will learn:

-How Ron got the inside track on how to maximize financial aid for college

-How much Ron took out in loans for school and how long it took to pay it back

-Ron’s theory on how grownup’s can help cut through the information overload and  get to the important information

-Insight into how Ron researches his columns for the NYTimes

-The significance of Ron’s mom taking him to meet with "the guy”

In Ron’s money lesson you will learn:

-Ron’s advice on how to learn about the options to pay for college now

-The one thing you should not do that could hurt your ability to get the maximum financial aid

-Why financial aid applications have become so complicated over time

-Specific resources from Ron to learn more about how to pay for college, before his book comes out

In Ron’s money tip you will learn:

-About his love of experiences like concerts and baseball games

-How he is able to get discount tickets to events

-The specific strategy, including the timeline, that Ron uses to get the best prices on tickets

-The best ticket score Ron ever got, and why he was so excited about the show!

In My Take you will learn:

-How I went on a “Mentor Tour” a few years ago, before launching the Financial Grownup brand

-Why I agree with Ron, that consulting people who know more about something that you do, can be the best way to get an edge on a new venture, whether it is college, or launching a business. 

-The value add of an in-person conversation compared to doing internet research

-The importance of making children aware of the costs of higher education, whether or not they pay for part or all of it. 

EPISODE LINKS

Ron Lieber’s website: http://ronlieber.com

Ron’s NY Times Columns: NYTimes.com/Lieber

Get Ron’s book The Opposite of Spoiled

Learn more about Ron’s upcoming book “What to pay for college”

Resources recommended by Ron Lieber

Paying for College without going Broke by Kal Cheney

SavingforCollege.com

Follow Ron!!

Twitter @RonLieber

Instagram @ronlieber

Facebook.com/RonLieberAuthor

 

 StubHub is where Ron goes to get last minute discount tickets!

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Transcription

Ron Lieber:
Somebody slipped us a phone number for a guy, the guy to see in the Chicago land area if you did not have enough money for college. Turns out he was the assistant director of financial aid at Northwestern University and he had this side hustle going on where every day at 5:00 p.m. after his colleagues had gone home for the night he would sort of usher you in at the side door of the financial aid office at Northwestern. You'd give him 50 bucks in cash and he would tell you all of the secrets of the financial aid system.

Bobbi Rebell:
You're listening to financial grown up with me, certified financial planner Bobbi Rebell, author of How to be a Financial Grownup and you know what being a grownup is really hard especially when it comes to money but it's OK. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson and then my take on how you can make it your own. We've got this.

Bobbi Rebell:
Hey friends. So Ron Lieber, famous, very famous New York Time's money columnist, super nice guy, also the author of the upcoming book What to Pay for College, the best seller The Opposite of Spoiled. He knew a guy. As he describes it it was basically an underground financial aid information network. This really happened. Before we get to Ron's unbelievable story, can't believe this really happened, I do want to welcome new listeners. And of course welcome back those who are returning. The show's been growing and I'm so happy you guys are spreading the word. So thank you in advance for any more spreading the word that you do. Please tell friends about Financial Grownup if you're enjoying it. I'm also happy that you guys are enjoying the video promos that we do for each episode. A reminder if you want one for you or your business we are having a little competition. Whenever you see the video in social media, share it. Whoever shares it the most between now and July 1st I will make a customized video just for you. So a little experimental competition we're having here.

Bobbi Rebell:
And if you have a great money story, you want to be on the show, we want to hear from you. E-mail us at info at financialgrownup.com, tell us what your money story would be and what your everyday money tip would be and maybe you'll be selected to be featured on the program. We have our first listener episode coming up soon. Now to Ron Lieber. My first exposure to his writing came when I read his bestselling book The Opposite of Spoiled, Raising Kids Who Are Grounded, Generous and Smart About Money. And yes I have used his strategies in my own home. I am also now an avid fan of his New York Times column, Your Money. In it Ron sheds light on issues that touch so many of us and with real solid reporting behind it. So that's something as a journalist I really value and appreciate. He's really good at what he does and as a parent I can't wait to read his upcoming book What to Pay for College. An entirely new guide to the biggest financial decision your family will ever make. But first you get to hear this story about a guy. Here is Ron lever.

Bobbi Rebell:
Hey Ron Lieber, you're a financial grownup. Welcome to the podcast.

Ron Lieber:
Thank you for having me.

Bobbi Rebell:
We're so excited to have you. You are the author of one of my favorite books, The Opposite of Spoiled which has set the standard for so many families including my own. We have our three save/spend/give jars in our house for my 10 year old. So thank you for that. And I know you have a new project.

Ron Lieber:
Yes I'm working on a book right now called What To Pay For College which is all about when if ever it is worth paying more than whatever your flagship state university costs for a private college or an out of state public university or something else entirely.

Bobbi Rebell:
Something we all need to be thinking about. What I want to hear for your money story though is about your experience when you were younger visiting the financial aid consultant with your mom when you were a senior in high school. Tell us what happened.

Ron Lieber:
So there I was. 1988. Chicago, Illinois. Already a scholarship kid at the K to 12 private school I attended back then. We didn't know very much about financial aid, somebody slipped us a phone number for a guy, the guy to see it in the Chicago land area if you did not have enough money for college. Turns out he was the assistant director of financial aid at Northwestern University and he had this side hustle going on where every day at 5:00 p.m. after his colleagues had gone home for the night he would sort of usher you in at the side door of the financial aid office at Northwestern. You'd give him 50 bucks in cash and he would tell you all of the secrets of the financial aid system.

Bobbi Rebell:
No.

Ron Lieber:
[crosstalk 00:04:26] God forsaken FAFSA form. Yeah, he knew exactly what he was talking about. I got into college at Amherst early decision, got a fantastic financial aid package and graduated with under $10,000 in student loan debt which wasn't all that much at the time and got it paid off in 10 years.

Bobbi Rebell:
Wait, but we got to go back Ron. So what are some of the secrets that he told you?

Ron Lieber:
It was a reminder that there is always some financial grownup out there in the world who has the information that you seek and quite often if you just had the guts to pick up the phone or show up in their office maybe with a little bit of cash on the barrel that person will tell you the secrets of whatever code you're trying to crack, whatever system you're trying to beat. There is a grownup out there somewhere who can help you. And you know every time I go out and write a column for The Times I'm looking for that one financial grownup who has the answer and they're always out there somewhere.

Ron Lieber:
But the second thing and maybe the most important thing here came from the fact that my mother took me there in the first place. She could have left me at home. She might have felt anxiety about the situation we were in or ashamed that we were going to have to go hat in hand to all these schools you know asking for money. But she felt like I at the age of 17 ought to have a front row seat for that process because it was going to be my education and my debt. And I tried to remember that when I'm tempted to shield my older daughter who's now 12 from whatever financial dilemma that my family is facing. She's old enough to hear a fair bit of this and I want her to understand.

Bobbi Rebell:
Have you ever circled back to your mom and asked her why she took you in and what was going on in her mind at that time?

Ron Lieber:
You know I did a couple of years ago as I started thinking about this guy again. I actually tracked him down on the plains of Colorado where he's gone to retire from financial aid. And he remembered me and we chatted about it and he said the thing that always surprised him was when the parents came without the kid. So you know he gave my mom great credit. And you know my mom to her credit to this day you know doesn't shield me from you know any financial dilemma she's facing.

Bobbi Rebell:
How did she find this guy?

Ron Lieber:
The people at my private high school in Chicago just did not know a ton about financial aid and how it worked. But they said there's this guy. And you know it was literally a slip of paper with the guy's phone number on it, I'm not even sure there was a name and you know I just dialed the suburban Chicago area code and he picks up and he said yeah you know come to this address next Tuesday and bring me my money and we'll talk. And it was like a financial aid underground.

Bobbi Rebell:
For our listeners now in 2018, what is the lesson from that? What's the takeaway?

Ron Lieber:
I think you always have to turn over every rock and talk to every person who might have information that can help you. Don't be ashamed of the fact that you don't understand. Every single last one of these financial systems that we encounter in our daily life is complex. Often they are complex by design. Sometimes they're complex by accident right. In the case of the financial aid industry loan systems, you know layers of people over the decades have layered you know different levels of complexity onto this. All in the hope that they can help some or another student who might be disadvantaged by the last layer that was laid on right. What we end up with is you know eight student loan programs and nine different income driven repayment plans and you know two different ways the financial aid is calculated at most colleges and it's really confusing so ask for help, you know express your ignorance and demand information. Right. I mean if you're approaching a system that has a sticker price of over $300,000 now at the most expensive selective colleges. You have a right to demand more information and to get some answers so don't be sheepish about it.

Bobbi Rebell:
Are there specific resources that you would recommend?

Ron Lieber:
Well here's the problem right and the reason I'm working on What to Pay for College is that I don't actually believe that the perfect resource exists. But if you're looking for like nuts and bolts of financial aid I really like Cal Cheney's book Paying for College Without Going Broke. It's about the best book that I've seen about the financial aid system. And if you're thinking about saving for college and how to do that the book that the folks at savingforcollege.com published is quite good if you want to know about the ins and outs of 529 plans and all of the various complexities there and there are a fair number.

Bobbi Rebell:
All right well this is why we need your book. I'm going to hear more about your book in a second but I want to just get to your money tip because we talked before we started recording and you apparently have a concert ticket problem. And I think a lot of people can relate to this, especially coming into the summer, it's time we all like to go see our favorite artist. Tell us Ron.

Ron Lieber:
I'm constantly wrestling with you know how much should I spend for the possibility of you know close up literally experience that's going to make me happy. I do often snipe my way through StubHub. So instead of buying tickets you know weeks or even months ahead of time if it's something where I'm pretty sure there's still going to be a lot of tickets at the end I will wait and I will wait and I will wait until sometimes less than an hour before showtime or before play ball. You know and buy my tickets as I watch the prices fall in ten minute increments, you know every five minutes. You know that was how I saw Phish on New Year's Eve a couple of years ago for not very much at all. Of course there's always some risk involved that all the tickets will disappear. But you can watch and see. You know are there dozens left, hundreds or thousands. Right. Are the tickets disappearing quickly or not. You know you can keep track, make a little spreadsheet for yourself as you watch as the date or the hour approaches. You know but what I often see with concerts is that you know the price will start falling relatively quickly you know within a couple hours of showtime. You know then you just grab the point at which you feel comfortable paying the price. And at that point you can generally download the tickets instantly.

Bobbi Rebell:
So what's been your best score?

Ron Lieber:
I think the best score was probably those Phish tickets on New Year's Eve. Although whenever the Cubs come to town to play the Mets as they are doing in a week or so here in New York City I'll often use this method as well.

Bobbi Rebell:
Alright. So you are actually on a break from your full time job at the New York Times because you're working on your new project. Tell us more about that.

Ron Lieber:
Sure. So the book is called What To Pay For College, it will be out sometime in 2020. No pre-orders yet. You know for anybody who's interested in kind of where I'm heading with it you know you can find hints of it in the columns that I've written for The Times about higher education. You know I read a handful each year and my archive is at nytimes.com/lieber and the book questions I'm asking are born of really a half decade of observation where without anyone really noticing the rack rate at the most expensive private schools top $300,000 for four years, flagship state universities now regularly cost $100,000 dollars or more for four years. You've got a $200,000 difference between those two things. That's per child after taxes. Almost nobody can save that much money. This is insane.

Bobbi Rebell:
Wow. It is insane.

Ron Lieber:
Yeah so the question then becomes what if anything are you actually getting for that $200? And if you go asking those questions at the more expensive colleges they will look at you cross-eyed and if you ask for data to prove that the extra $200,000 is worth it and there are a lot of different ways to potentially define worth, which I'm exploring in my reporting, if you just ask that right, well why do you think it's worth it and show me some numbers right. Here we are in the era of big data where you can get a ton of information about your social plan or about your car or about the house you want to buy, you can just round in data on all that stuff. There is almost no data about what happens to you when you're at college and what happens to you afterwards. And it is my suspicion that the colleges actually like it that way because in the absence of data we make decisions on the basis of snobbery. Private is better than public.

Bobbi Rebell:
So true.

Ron Lieber:
Right, you know ivy covered walls are better than you know concrete 1970s Britos architecture. Right. So I'm going down all these rows and asking all of the impertinent questions and I'm going to have a lot to say about it very soon.

Bobbi Rebell:
All right well I'm hoping you can hook me up with a preview sometime soon because I will need to read that. I've got kids in college so I am very excited about this new project. Where can people find you and learn more about what you're writing in the meantime?

Ron Lieber:
Sure. Www.ronlieber.com, there's a big fat contact button for anybody who has a story to share about how they and their family decided what they should pay for college.

Bobbi Rebell:
And on social media?

Ron Lieber:
@RonLieber all over the place, you know on Twitter, on Instagram and the Facebook community that I run on parenting and money is at Facebook.com, Ron Lieber author.

Bobbi Rebell:
Awesome, thank you so much Ron. This has been amazing.

Ron Lieber:
It was a pleasure.

Bobbi Rebell:
So Ron's sincerity is contagious and his book is definitely needed. As he mentioned he wants to hear from all of you about your experiences. So share yours with him, as he said all the info is at his Web site, ronlieber.com. Here's my take on what Ron shared with us. Financial grownup tip number one. As Ron said, there is a grownup there who can help you. Don't be afraid to reach out to older and/or more experienced people for help. Yes, the internet does have a lot of information but not always context. Sometimes just getting the scoop from a person, someone, who's got the dirt on whatever you need to know can be really meaningful, they can cut through a lot of the junk out there. Ask someone, call someone you know, ask someone who they would recommend that you talk to, set a meeting.

Bobbi Rebell:
When I was figuring out what I wanted to do after years of being a television anchor I went on what I jokingly called a mentor tour, setting up face to face meetings with anyone I admired who would generously give me their time and asking them who else I should talk to. And trust me mo internet research can take the place of the kind of information download that you can get from sitting face to face with somebody and asking them what they think, what their experience has been and what they think you should do. People are generous so take advantage of that. That will be good.

Bobbi Rebell:
All right. Financial grownup tip number two. Ron points out the significance of the fact that his mom took him with her to meet the guy. Ron learned that financial aid wasn't going to just appear. He knew that he was a stakeholder in the process and he appreciated the money that much more. We all want to shield our kids from the reality of our financial fragility but if we can get past our egos we do them a service by keeping them in the loop and making them aware of what it really takes to pay for college.

Bobbi Rebell:
Thanks to all of you for spending part of your day with us. We make these podcasts relatively short to fit into your busy schedule but also so you can listen to a few in a row when it makes sense like during your commute, if you're watching your kids do an activity or just chilling out and you want to listen to a little bit more. You can listen to three or four at a time, make 45 minutes, listen to four, it could be an hour. Whatever works for you. The goal is to make it fit in with what you're doing and fit your life. If you enjoy the show please help us grow. We need you. Tell a friend, write a review on Apple Podcasts and follow us on social media. I am @BobbiRebell on Twitter, BobbiRebell1 on Instagram and Bobbi Rebell on Facebook. Ron's new book can't come soon enough but I'm glad he gave us a sneak peek. And by the way also a great strategy for discount tickets so thanks Ron for getting us all one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK media production.

Geometry of Wealth author Brian Portnoy invested time and money in an academic career, but made a career change that got a lot of backlash. But looking back that judgement only makes him more sure he made the right move. 

In Brian’s money story you will learn:

-How and why he made a major career change after investing years of time and money

-His candid thoughts about the field he left, and why it did not live up to his admittedly unrealistic expectations

-The financial and social reality of academic life

-How he was able to detach from external expectations of him by colleagues, family and friends

-The role long-term relationships and staying connected played in his ability to shift his career

-Why he had not been more informed before choosing his initial career

-How his life, and his happiness changed once he moved to the new and higher paying job

In Brian’s money lesson you will learn:

-If a situation doesn’t feel right, it’s better to make the change

-Trust your gut if it doesn’t feel right

-Have the courage of your convictions to move forward

In Brian’s everyday money tip you will learn:

-How giving money can create contentment

-Research shows that people who demonstrate generosity tend to be happier

-What Brian calls constructively selfish- when you tip more to someone that needs the money more than you. 

In My Take you will learn:

-My candid thoughts about not fully understanding the financial limitations of the career I chose

-Understanding not just the potential financial pay of an industry but also the culture and how that aligns with your values

Brian and Bobbi also talk about:

-Brian’s latest book “The Geometry of Wealth"

-What he means when he talks about a life of funded contentment

-How his book cuts through jargon

-The importance of defining what makes us happy before we start diving into investing

Episode Links

Learn ore about Brian at shapingwealth.com

Pick up a copy of Brian’s book: The Geometry of Wealth

Follow Brian!

Twitter @brianportnoy

LinkedIn Brian Portnoy

 

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Transcription

Brian Portnoy:
Most other people don't care. Your family cares, a few friends care, but for the most part, recognize that even if they say something negative or they put you down, they're not thinking about you before or after that conversation. They're just going on in their own life, and so you really don't owe them really any of your emotional energy.

Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup. You know what? Being a grownup is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a Financial Grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey, Financial Grownup friends. That was Geometry of Wealth author Brian Portnoy talking about a controversial career change he made, leaving an academic path that he had invested in both time and money, for a job in finance, and the judgment he faced by colleagues. He gets into some very candid comments that may surprise you to hear them actually said out loud. I'm curious to hear your reaction here, so please DM me after you listen and let me know what you think. On Instagram I'm @BobbiRebell1 and on Twitter @BobbiRebell.

Bobbi Rebell:
With that, let's get going. Here is Brian Portnoy. Hey Brian Portnoy, you are a financial grownup, welcome to the podcast.

Brian Portnoy:
Hi, nice to be here.

Bobbi Rebell:
Congratulations on the success of your most recent book, The Geometry of Wealth.

Brian Portnoy:
Thank you. I appreciate it.

Bobbi Rebell:
And this follows by the way, your other book, Investor's Paradox. So, we're so happy to have you here, and you brought with you some great information, but before we talk more about your book and all that that offers our listeners, as you say, to live a life of funded contentment, and that has a lot to do with a big career decision that you made that was in part financially motivated, but there were other things going on as well. Tell us your story.

Brian Portnoy:
For the first roughly ten years of my career I was in academia. I earned a doctorate at the University of Chicago in political science, and I was having some success in terms of my writing, in terms of job offers from prestigious universities for tenure track positions, and on paper, everything was going really well. But I'll say that when I was honest with myself and with my fiancee at the time, I simply wasn't happy. It was a tough career.

Brian Portnoy:
Frankly from a monetary perspective, it was not lucrative. Being a graduate student, you're basically broke and then you go from being a graduate student to a professor when you're not broke per se, but you're really not making a lot of money. And the academic lifestyle involved moving around a lot, finding it hard to set roots in one place because you're looking for the right job at the right university.

Brian Portnoy:
The harder part was the expectations that others had of me that, hey, you're a smart guy and you've been working on and thinking about this for a long period of time, so to be able to go to those people, family, friends, my professors, my dissertation committee and say, "You know what, I want something different. I need something better for me," was not easy. I ended up just sort of putting a bunch of feelers out there.

Brian Portnoy:
One of them was to an old friend that I grew up with, who was working at a company called Morningstar, that some of your listeners might be familiar with. He was telling me about some of the investment research that they were doing, and even though my PhD was in political science, I was researching markets and economics as well and I found this job pretty intriguing, and I applied and I got it.

Bobbi Rebell:
Did you know the kind of salaries that ... first of all, the years of investment, both in lost income and in paying tuition and then making very little money, and did you know what the end game was in terms of earning potential when you made those decisions at 21?

Brian Portnoy:
I really didn't, and I guess it's a little embarrassing to say that I didn't. But I was following my passion at the time, and so I figured, "Hey, I'm friendly with and I see the lifestyle of some of these professors, and it looks great to me." So I didn't ask any hard questions about the monetary element of it. I was on a day-to-day basis, pretty broke, and that didn't help my mood. I just hadn't given much thought to the career element. Not just the money, but the lifestyle, which was sort of moving around a lot, and frankly, the people. I'm not going to be critical of those who go into academia, many of my good friends are now senior professors all over the world. But I really wasn't enjoying sort of the social network that I found myself in.

Bobbi Rebell:
What do you mean by that?

Brian Portnoy:
I mean when I was hanging out with folks in the business world, and broadly speaking, I was having a good time, enjoying socializing. When I was hanging out with those in academia, I just didn't like the people very much. Despite the level of brilliance that you would find with folks, it was relatively narrow-minded. I just wasn't entirely comfortable.

Bobbi Rebell:
So what were the changes? You get the job at Morningstar. What were the changes in your overall life, but specifically financially, in terms of your potential and the path that you were now on? How did that change?

Brian Portnoy:
It changed significantly. Well, first of all, at that point I was married to somebody who had a very good six-figure salary. My starting salary at Morningstar I think was $41,000. This was in the year 2000. I was not pleased with that, but that's what the job offered and I wanted the job. But it was certainly about double or more, actually triple what I had been living on in graduate school. So, from that point of view, it was a step up in lifestyle. Plus I was married to somebody who had a very good job.

Brian Portnoy:
The more important thing is that I got into sort of a normal work routine in mainstream society. The lifestyle I had in academia, you set your own schedule, which sounds great. You work on whatever you want, which sounds great. But it was unstructured and frankly untethered from most everything going on in the world. It's remarkable how ignorant others can be. Something I've really taken to heart is that most other people don't care.

Brian Portnoy:
Your family cares, a few friends care, but for the most part, recognize that even if they say something negative or they put you down, they're not thinking about you before or after that conversation. They're just going on in their own life, and so you really don't owe them really any of your emotional energy.

Bobbi Rebell:
So what is the takeaway for our listeners from that story?

Brian Portnoy:
If you're in a situation where it just doesn't feel right, even if you're getting good reviews, even if you're making decent money, you owe it to yourself to step back and say, "Do I owe myself more than this?" And then have the courage of your convictions to push forward.

Bobbi Rebell:
Let's talk a little bit about your everyday money tip, because it ties into the philosophy of your book, The Geometry of Wealth in that you have something you're going to suggest to people that at the moment will not make them wealthier, but it will help them lead a richer life.

Brian Portnoy:
I think we all think in different ways about the relationship between money and happiness, and whether money buys happiness. And I'll say somewhat controversially that money in some cases can buy happiness. As part of that, deeper forms of contentment in our lives are in part driven by our deliberate decisions to express gratitude to others, and to be generous. There is now a lot of research in psychology and neuroscience that shows that people who express gratitude, and people who demonstrate generosity tend to be happier.

Brian Portnoy:
I call it being constructively selfish, because when you can tip a little bit more at the restaurant where the waiter or waitress was really helpful, if you can every time you stay at a hotel, don't leave $1 or $2, leave $5 for somebody who probably needs the money more than you do, and even in a non-monetary sense, you have an Uber ride where the driver was really fantastic, make it a point to write them a review. Or if there's somebody at work or in your personal life who's really done you a solid, send them a text or call them and say, "Hey, thanks for doing that," without the expectation of reciprocity.

Bobbi Rebell:
Love that. All right, let's talk a little bit quickly about your book The Geometry of Wealth. As I mentioned, it's your second book, and it's a lot about the emotional side of investing and how to grow and stay wealthy, and get past the jargon. I mean, you talk about the fact that a lot of people in the investing industry make it more complicated than it needs to be.

Brian Portnoy:
That's right. The industry is filled with jargon and sometimes that is used deliberately to confuse people so that they can buy products or services that might not be appropriate for them. I think the biggest mistake all of us, including me, off and on for decades now, the biggest mistake that we make when it comes to our money is that we equate money with investing, and we immediately dive into the weeds, into the markets and stocks and all that kind of stuff. Which can be interesting, but very distracting.

Brian Portnoy:
The Geometry of Wealth makes the point that what we need to do is start at the beginning. And starting at the beginning is to define what really makes us happy in life. And there's a number of different nuances to that, but we should be looking to underwrite a contented life. We shouldn't be looking to just get rich, meaning just have more money.

Bobbi Rebell:
Where can people find out more about you and The Geometry of Wealth: How to Shape a Life of Money and Meaning?

Brian Portnoy:
My personal website is shapingwealth.com. There you can learn more about my background. There's a link to both The Geometry of Wealth and The Investor's Paradox. That's the best place to start, and also my Twitter handle is @brianportnoy, and I'm quite active on Twitter writing about day-to-day financial decision-making.

Bobbi Rebell:
Thank you, Brian.

Brian Portnoy:
You're welcome.

Bobbi Rebell:
Hey, friends. I kind of have to take a deep breath after that, but I really admire Brian's fortitude in making a career change even after he had put so much into his academic career. Financial Grownup tip number one, when choosing a career path, find out the general cost to get there. Money and time. And the general payback. What can you expect? Sounds simple but most of us don't do it.

Bobbi Rebell:
I didn't do it, guys. I was a communications major at the University of Pennsylvania. That's not a cheap education. And while I did have what was called a concentration in the business school there, I never really mapped out and thought through what journalism paid. And you know what guys? Business news pays better than general news, in general. But journalism, not the most lucrative career.

Bobbi Rebell:
Financial Grownup tip number two, Brian talked about more than money in why he wanted to leave. Industries have cultures, and sometimes those cultures are part of what makes a career attractive or not. So take that into consideration. You spend a lot of time in your career and with colleagues, so it has to be a match.

Bobbi Rebell:
Thanks to all of you for listening. We hope you are finding that investing the time is delivering value to you, and if it is, tell a friend, tell your relatives, tell your colleagues. Also, tell us. DM us on the social channels and learn more about the show at bobbirebell.com.

Bobbi Rebell:
Show notes can be found at bobbirebell.com/podcast/brianportnoy. In every show, it's always the same pattern, just switch out brianportnoy for the guest name, and you can find the show notes and links to everything that we talk about. And thanks to Brian for bringing us all one step closer to being Financial Grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.

 

Indiana-based radiologist Dr. Scott Steenburg joins the Financial Grownup podcast as our first listener to share a money story. Scott shares the story of how a push to have students take out more money than needed to pay for tuition, created devastating debt situations for classmates.

 

In Scott’s money story you will learn:

-Why Scott was offered more money than needed when taking out student loans

-What Scott used his extra student loan cash to buy, and whether it was a smart financial decision

-The things his fellow students spent their extra student loan money on, and how  that impacted their financial wellbeing.

-How the tech stock bubble impacted many of his peers who were leveraging student loan debt

-How much student loan debt Dr. Streenburg had, and how it compared to his peers

-The strategy he and his peers used when they could not pay the debt, along with the consequences

-Whether or not he believes taking on all the debt was worth it

In Scott’s money lesson you will learn:

-His big regret regarding the debt he incurred while in medical school

-The long-term consequences and impact to his peers that spent student loans for things other than tuition. 

-The risks that medical students take on when assuming large student debt, that is unique to the medical profession.

In Scott’s money tip you will learn:

-How you can get medical school debt forgiven

In My Take you will learn:

-how to find programs that allow you have loans reduced or forgiven

-The requirements needed for student loan forgiveness

-Resources to manage, lower, and get rid of student debt

 

EPISODE LINKS

• Government website links:

  • www.studentloans.gov

  • https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation

  • https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/questions

• Here is the article from Robert Farrington’s The College Investor: 

  • https://thecollegeinvestor.com/578/ways-to-get-student-loan-forgiveness/

• This is the article by Melanie Lockert. 

  • https://studentloanhero.com/featured/the-complete-list-of-student-loan-forgiveness-programs/

• You can also check out Melanie’s episode of Financial Grownup here!

• You can consolidate your student debt, and get  more information by visiting websites, including two that I mention, SoFi.com and StudentLoanHero.com

 

Follow Scott!

Twitter @radiology911

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Transcription

Scott Steenburg:
Some of my classmates used their excess money to invest in tech stocks. It did not turn out well for them. Some of my classmates lost all of their student loan money in the dot-com bubble.

Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner Bobbi Rebell, author of How to Be a Financial Grownup, but you know what? Being a grownup is really hard, especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey, friends. This is a big episode here at Financial Grownup. We tried an experiment. We asked you guys to send in your money stories and your everyday money saving tips to potentially be a guest here on the show, and you know what? It worked out really well. We have our first listener episode. I am so excited for how it turned out. Our guest is fantastic. He is a radiologist in Indiana, Dr. Scott Steenburg, so let's get to Dr. Scott's story. It is about the loans that he and his medical school classmates racked up years ago.

Bobbi Rebell:
Student debt to pay tuition is one thing, but taking up more than you need to actually pay the tuition, your real school costs, is a whole other thing, and the reality is that in some cases people are talked into taking out more than they need, just in case. But remember, that money is there and sometimes it doesn't get paid back right away. Sometimes it gets invested in, oh, technology stocks that can crash and burn in the dot-com bubble. It could also go to a new car. You'll hear all about it. Here is Dr. Scott Steenburg.

Bobbi Rebell:
Hey, Scott Steenburg. You're a Financial Grownup. Welcome to the podcast.

Scott Steenburg:
Thanks a lot, Bobbi.

Bobbi Rebell:
And congratulations, you are our very first listener that we are having as a guest. You're the winner, so I'm so excited to have you.

Scott Steenburg:
I'm glad to be here.

Bobbi Rebell:
Just quickly, tell us about you, what you do.

Scott Steenburg:
Sure. My name is Scott Steinberg. I am a radiologist in Indiana. A radiologist is a physician who specializes in interpretation of medical images such as X-ray, CAT scan, and MRI, and my subspecialty is in the emergency and trauma radiology world.

Bobbi Rebell:
Wow. What made you decide to write in?

Scott Steenburg:
Well, I've been listening to your podcast since the very beginning. A lot of your stories that you have on your podcast are very compelling, and when I heard that you wanted to have a listener on with a compelling story, I thought, "You know, there are some really weird things about the student loan industry," particularly with respect to medical school that I thought maybe this might be something that you haven't heard of before, so I reached out to you and told you some interesting nuggets about that.

Bobbi Rebell:
Which brings us to your story, which is very interesting, especially because it has to do with your student loans, but also money that you didn't necessarily use for tuition, so tell us exactly what happened.

Scott Steenburg:
Sure. As you probably know, medical school is not cheap, so most medical students need to finance their education with student loans. At that time when I started medical in 1999, it was really easy to get a lot of loans for all four years of medical school.

Bobbi Rebell:
And how much did four years of medical school cost at the time?

Scott Steenburg:
At the time tuition, I went to an instate school, it was maybe 9,000 per semester, so 18 to 20,000 per year, which is not a whole lot by today's standards.

Bobbi Rebell:
Okay, so go on. You were able to get financing, though, to go to school?

Scott Steenburg:
Yes, so during the interview process, you interview for getting into the medical school, and then in the afternoon you meet with a financial aid counselor to figure out how you're going to pay for medical school. At that time, I'm not sure if it's commonplace now, but at that time we were kind of nudged towards taking out the maximum allowable student loans because in future years, if you lower the amount that you requested, there was no guarantee that you'd be able to increase that number in the future, so we were kind of nudged towards just take up the maximum, and if you have access leftover you can do whatever you want with it.

Bobbi Rebell:
Okay, so how much did you take out relative to what the tuition was? You took out more than the tuition.

Scott Steenburg:
Yeah, so as a medical student it's hard to have a job to help pay for living expenses, so a lot of medical students will finance not only their tuition, but also living expenses such as food and rent and whatnot.

Bobbi Rebell:
What did you use the money for, besides living expenses? You bought a car.

Scott Steenburg:
Yeah, yeah. That's one thing that I told you about. If you have excess student loans, you can do whatever you want with it. You can either pay back immediately, which is the financially responsible thing to do. What I did one semester is I knew I had enough living expenses saved up, I already looked at my budget, I knew I wasn't going to need the student loan check, so I literally, it arrived in the mail and I walked across the street to the bank and put it in a one-year CD. At that time, the interest rate was somewhere just higher than the interest rate for the loan, so I did make a little bit on that, but it would have been smarter just to pay back right away to lower the overall balance. One thing I did in the subsequent years, I needed a new car, my car was falling apart, I needed to be able to commute from my apartment to school, so I used my excess student loan money to buy a new car.

Bobbi Rebell:
Did you need a car? I mean, was that a legit expense, or did you buy a lot more than you really needed?

Scott Steenburg:
We bought what we needed. The good thing about this, if there is a silver lining, is I put 50% down, so there's a small balance, but then I financed the rest at 7%, which was not a great idea, so I'm using the student loan money that has an interest rate at that time of 3.5% to pay off another loan that has 7%, so that was a terrible, terrible choice.

Bobbi Rebell:
Well, but you told me some people did even other things like buying tech stocks.

Scott Steenburg:
Yeah, so this was in 1999 to 2003 when I was in medical school, and some of my classmates used their excess money to invest in tech stocks, and it did not turn out well for them. Some of my classmates lost all of their student loan money in the dot-com bubble.

Bobbi Rebell:
Wow. That's really scary. Let's talk more about you. So, we get to the end of school. Describe to me how much you had in debt and then what was happening at that point.

Scott Steenburg:
Sure, so I graduated in 2003 and immediately started residency, entered a five-year residency in radiology. At that time, the student loan balance was about 130,000 which by today's standards is a fraction of what students are graduating with. I threw out an informal poll to a closed physician Facebook group that I'm a part of, and the numbers I was getting back for current graduates was between 200 and 400,000. So by today's standards my balance was not all that big, and even the minimum payments at that time were somewhat draconian. I was making a resident salary which at that time was about $35,000 per year, and out of that, of course, I needed living expenses, had to pay for a car, had to commute every day, so even the minimum payment was tight.

Scott Steenburg:
So what a lot of students do in this instance is they first defer, and at that point you could defer up to 36 months. I think it might still be that. Then after that, if you still can't make your payments, then you can go into forbearance, which is even worse, so then throughout the entire time the interest is accruing. From the time I started medical school to the time I started paying down my loan, it was nine years, so that was a long time of compounding.

Bobbi Rebell:
So then where did it stand? How did this end up?

Scott Steenburg:
Sure. The balance tipped the scales at about 165,000. I started making very aggressive payments in 2009, and this story turns out okay. I was able to finish paying off those loans last year. Everything turned out okay, and I really don't have any complaints. Taking all these loans helped enable me to realize my dream of becoming a physician and being a radiologist and doing what I love to do, but I live in a world of chaos in the emergency and trauma world, and I see people's lives destroyed every day.

Scott Steenburg:
Nine years of deferral of putting off student loan payments is a long time. That's a long time, and anything could have happened. If I developed an illness, or if I were in a car accident like a lot of the patients I see every day, or if I developed a disability or for some reason couldn't finish residency, that would have been really, really bad. And fortunately everything turned out okay for me, but for a lot of people it doesn't.

Bobbi Rebell:
How did you feel when you would see $165,000 as your balance?

Scott Steenburg:
Honestly, I buried my head in the sand. I didn't want to think about it. When I saw the number going up every month, and each month the amount that it would increase would increase because of compounding, I put it out of sight, out of mind. I kept my eye on the prize of finishing residency, and when I got an attending job, an attending salary, I had to be able to quickly pay it off, but in retrospect, I was entering the danger zone. You know, if something bad happened that negatively impacted my ability to earn income, it may not have turned out so well, and as you know and many of your listeners know, dismissing student loans and bankruptcy is very challenging.

Bobbi Rebell:
Is that something you ever thought about?

Scott Steenburg:
No, no.

Bobbi Rebell:
Okay.

Scott Steenburg:
I knew that once I finished residency and got a job I was going to be able to pay it down. I mean, the number is big and it was moderately terrifying, but once I started seeing that number come down, I started to feel better about it. I regretted having that balanced because I knew I could be taking that money and putting it to good use elsewhere. I did some math. You know, if I didn't have student loans and I used all that money to invest, it was a much bigger return than just taking out the student loans.

Bobbi Rebell:
So what is the takeaway then, for our listeners? When you look back at who you were when you were first entering medical school and having these meetings with the financial aid advisors, what would you have done differently, if anything?

Scott Steenburg:
I probably would have taken the excess money that I didn't need. I would have just paid back the balance and be able to give it back. You can use debt as a tool to accomplish your goals. However, if you're going to use debt to finance an education, you have to be very mindful of that. You need to be conservative, only take out what you need and then pay back as quickly as possible. If you use debt, especially for education, incorrectly and something bad happens that negatively impacts your ability to pay back the loan, that could be financially devastating.

Bobbi Rebell:
What about these people that were ... I mean, was it a popular thing at the time to take your student loan money, and instead of using it for tuition, use it to buy stocks?

Scott Steenburg:
That was one popular thing that students did. Other students would, if they had time off, they would go on a nice vacation. Like, me, I helped buy a car. That's what a lot of the students did, and like me, a lot of them were putting it out of sight, out of mind. All we need to do is finish medical school, go to residency, get an attending job with a higher salary, and pay back the loans quickly. But as I said before, it's a long time from the time you start to the time you end and start making a physician salary to be able to pay that down aggressively, and anything could happen in that time.

Bobbi Rebell:
So what is your money tip now? You have something really innovative that maybe some people don't know about, but could really be helpful.

Scott Steenburg:
One thing that exists in the medical world is a student loan forgiveness program where if you start paying off your loans even during training and you go to work for a non-profit, over a shorter period of time you'll have those loans forgiven. I'm sure there are other programs for non-medical professionals where there's a similar type track where if you go to, for example, an underserved area in your field, that you may be able to have some of your student loans forgiven or paid off.

Bobbi Rebell:
Great. Well, thank you so much, Scott. Is there anything else that you want to add? Anything you want people to know about you? How to reach you?

Scott Steenburg:
Sure. If you'd like to follow me on Twitter, I'm @Radiology911.

Bobbi Rebell:
I love that.

Scott Steenburg:
So that's a nod to my ... that's a nod to my-

Bobbi Rebell:
How did you get that? That's pretty cool that you got that handle.

Scott Steenburg:
I don't know. It just came to me, so I picked it. So that's a nod to what I do. I don't do a whole lot of personal finance there. Most of what I do is medical education, physician wellness, and policy, but if you like to see interesting images, that's where to go.

Bobbi Rebell:
All right. Thank you, Scott. You were wonderful, and really thank you so much for supporting the program.

Scott Steenburg:
Thanks for having me, Bobbi.

Bobbi Rebell:
Hey, friends. So first, student loan debt, as Scott mentioned, is pretty hard to get rid of unless you actually pay it. It stays with you even in bankruptcy, but there are some programs that you can at least look into and some options that are emerging, some new things in just the past few years. I'm going to send you guys to government website called studentloans.gov, and from there you can look for how to repay your loans and go to repayment forms. I'm going to now walk you through some of what you'll see there just to give you a high level sense of your options.

Bobbi Rebell:
So financial grownup tip number one, some loans, like Federal Family Education Loans and Perkins Loans can be eligible for something called Public Service Loan Forgiveness. The key thing for eligibility is that you have made 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer. That's a lot, I know.

Bobbi Rebell:
The key thing, though, qualifying employment is generally things like government organizations, federal, state, local. They even say tribal on that government site. You guys are going to follow up and look for yourselves. Also non-profits, like those with the 501(c)(3) designation. Also some other non-profit organizations, if they provide certain public services, things like AmeriCorps or Peace Corps volunteer. So if you are interested in those things anyway, it could be something to look into that could pay off in more ways than one.

Bobbi Rebell:
Financial grownup tip number second. Now, this is more for the for-profit schools, some of which were not living up to what they promised students, so you can also apply for something called borrower defense to repayment if you took out loans to attend a school that misled you about the educational services that you paid for with the loans. There's a lot of fine print to all of this. You have to follow up by really combing through the website. It even covers the extremely rare times that student debt can be forgiven in bankruptcy, but again, that's very rare. And also, of course, what happens to student debt if the student or the parents, who in some cases are the borrowers, pass away.

Bobbi Rebell:
A few other resources regarding student debt. Check out one of my favorite websites on this topic, The College Investor. It is run by Robert Farrington. He knows a lot about student debt. He even has a great article I'm going to leave. Well, there's many great articles, but I'm going to leave a link to an article that's one of my favorite in the show notes for more ideas to get your debt forgiven, and also answering questions about things you might have heard of that were options in the past but have now merged into other forms, so it's important to keep up with it. It's kind of a moving target, the way that the laws change. Also, SoFi and Student Loan Hero both run blogs that have a lot of useful information. I'm going to leave a link to a great article by my friend and former financial grownup podcast guest, Melanie Lockert, in the show notes as well that has some great resources.

Bobbi Rebell:
Thank you to radiologist Scott Steenburg for being our very first listener to share their money story and advice. It was great. If you want to be considered for an upcoming episode, email us at info@financialgrownup.com. Tell us what money story and what everyday money tip you would share if you were chosen.

Bobbi Rebell:
Thanks to everyone for your support. If you listen on Apple Podcasts, please take a moment to rate and review the podcast. If you are enjoying the podcast, please tell someone that you think would also like it. Spread the word. Post it in one of your Facebook groups and tell people to check it out. If you spot one of our video promos on Twitter or Instagram, share that, and you could win a custom one just for yourself. We're running a little competition.

Bobbi Rebell:
I'm on Twitter, @bobbirebell, on Instagram, at bobbirebell1, on Facebook, at Bobbi Rebell. I can't thank Scott enough for reaching out and being our first listener to share a story. It was a good one, and something unfortunately way too many people can relate to, but I do think his story and his great advice got us all one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.