The Doctor’s Guide to Eliminating Debt

eliminating debt

Eliminating Debt: synopsis

In The Doctor’s Guide to Eliminating Debt, Dr. Cory Fawcett tackles the difficult task of helping doctors become and remain debt-free.  He asserts (and I agree with him) that doctors are too comfortable with debt. 

He refers to this as “malignant credit carcinoma.”  I love that analogy!

Dr. Fawcett is a surgeon who has written a series of books called “The Doctor’s Guide” series.  Like the mission of The Scope of Practice, he’s dedicated to helping physicians find ways to master their personal finances.

In this book, he challenges philosophical assumptions that physicians commonly misunderstand.  He also gets very detailed and practical as he helps physicians achieve debt freedom.

Eliminating Debt Chapter 1: My Debt-Free Journey

Dr. Fawcett went to medical school on a Navy scholarship.  Unfortunately, he ended up deeply in debt early in his career.  It happens to most physicians, and he admits he was no exception.

He attacked his debt using a “snowball effect.”  In this model, he paid off one debt aggressively while paying minimal amounts on the others.  Each time he eliminated one debt, he attacked the next one, then the next.  

He set out to become debt free in 3.5 years.  But, life threw some curves so it actually took him just under 6 years, but he made it.

I love this quote he shares,

“Whatever the financial goal, it’s much easier to accomplish when we place ourselves on the receiving side of interest.”

Eliminating Debt Chapter 2: Balance

He hits on an important concept here. The emphasis in this chapter is proper balance of our attitude toward debt.  

Dr. Fawcett shows two sides of the “debt coin.”  If we overemphasize the importance of debt repayment, we leave too little room to focus on the present and future.  Underemphasis of debt, on the other hand, leads to runaway interest payments.

He goes on to argue that you need a plan.  99% of millionaires agree with this statement.  I’m not a millionaire, but I agree too.  You need to budget and set longterm financial goals.

Eliminating Debt Chapter 3: Symptoms and Causes of Debt Accumulation

Here we examine reasons why people accumulate and maintain debt.  He explores several important concepts.

  • Physicians are numb to debt.
  • Physicians don’t remember life before debt.
  • The “perpetual-debt” lifestyle becomes normal.
  • We buy bigger houses than we can afford.
  • Physicians don’t get aggressive about paying off loans.

Eliminating Debt Chapter 4: How to Recognize Bad Advice

As I cover in my article on having a personal board of directors, you need to know enough about money to know when you’re getting good or bad advice.

Strategies that involve paying more in interest than you get in tax breaks are losing strategies.  The biggest example is borrowing excessively on your house and not paying it off aggressively.

Recognize potential conflicts of interest.  Bankers, financial planners, and insurance agents aren’t all scammers.  Many of them are though.  Take their advice for what it is: advice.  Know enough about money to recognize bad advice.

Eliminating Debt Chapter 5: New Perspectives on Debt and Housing

He opens the chapter by admonishing people not to buy “too much house.”  If you buy the house and have to work a lot of overtime to pay for it, it’s not worth it.

He then goes through a series of home-buying tips that are outstanding.  You’ll have to get the book to read them all.  Suffice it to say that they are incredibly wise and prudent suggestions.

His attitude toward debt is the same as mine: debt limits choices.  I wholeheartedly agree with this sentiment, and not enough people acknowledge this simple truth.  

Debt always equals risk.  He states rather eloquently, “When you borrow, you are presuming on tomorrow.”  His suggestion is to plan for next year to be bad, and your plan will work out whether next year is bad or good.

He closes the chapter by exhorting people to STOP BORROWING MONEY.  When you’re in a hole, quit digging!!

Eliminating Debt Chapter 6: From Decision to Debt-free in Four Easy Steps

  • Step 1: Assess the problem.  Determine your net worth and use that as your baseline for your future financial plan.
  • Step 2: Establish your goals.  Figure out what you want your next 50 years to look like financially.  
  • Step 3: Establish a spending plan.  I harp on the importance of budgeting all the time, and too many people still believe they don’t need this.  You can’t find your way through the forest without a map to guide you.  You need a budget!
  • Step 4: Apply the snowball method.  Rank order your debts from smallest to largest, regardless of interest rate.  Pay minimum payments on all of them.  Pay as aggressively as you can on the smallest one first.  Once that’s gone, move on to the next one.  Focus on one debt at a time and you’ll have a greater chance of success.

Eliminating Debt Chapter 7: Staying Out of Debt

Once you get debt-free, celebrate!  That’s a huge accomplishment!!  Now, how do you keep from going back in debt?

Revisit your spending plan (budget).  You don’t have debt payments, so you need to do something with that money that’s no longer going towards debts.

He goes through a series of ideas for keeping out of debt.  These include maintaining low expenses and clipping coupons.

I particularly like his “opportunity fund” concept.  He keeps $50,000 in an savings account that he can use if a great investing opportunity arises.  I think that’s a great way to be ready for investing that doesn’t involve going into debt.

Eliminating Debt Chapter 8: Begin Investing

This is a short chapter on investing, but he hits on a few key concepts.  He recommends taking full advantage of tax-advantaged options (IRA, 401(k), etc.).  

He also advises developing streams of passive income.  That could include investing in rental real estate or starting an online business, for example. 

Eliminating Debt Chapter 9: The Finish Line

What’s your finish line?  Have you decided on an end-point for your investing plans?  What will you do when you cross that threshold?  

Earning money for money’s sake is a great way to have a lot of money and no happiness.  You need a goal, to be sure, but decide what you’ll do once you reach that point.  Will you cut back on work hours?  Travel more?  Give to charity?  

Whatever you do, be intentional about it.

Recommendation/endorsement 

Dr. Fawcett takes on a prevalent issue plaguing physicians and simplifies it in this book.  His style is very readable, and his recommendations are both wise and easy to implement. 

All physicians should be required to read at least five books on personal finance.  I think this is a great book to include in any top five list for physicians.  

This book is a short read but jam-packed with great information.  I highly recommend it!

Buy the book on Amazon by clicking here.

eliminating debt

If you like that book, you’ll love these books as well:

If you want to learn more about Dr. Fawcett’s amazing course, “The Doctor’s Guide to Thriving in Locum Tenens,” you definitely need to check out this link!  This course will save you so much time and money by getting you on the right path to your locum tenens work.  

Full disclosure: if you buy the book using any of the links on this page, I’ll earn a small commission from Amazon Associates at no additional cost to you.  Your support helps defray the cost of maintaining the site, and I really appreciate it!

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