MtoM #208: PM&R Resident Gets Back to Broke and Finance 101: Turning Your Home into a Rental Property
Feb 3, 2025
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A resident shares his journey of returning to a 'back to broke' status despite early financial support from his parents. He emphasizes the importance of financial education, living frugally, and smart spending. The discussion shifts to transforming a home into a rental property, weighing its pros and cons. Key strategies for managing finances during residency, like tackling student loans, budgeting for weddings, and smart investing, are highlighted, alongside insights on tax implications when selling or renting property.
The podcast emphasizes the importance of early financial education and strategic planning for residents to manage student debt effectively.
It discusses the complexities of turning a primary residence into a rental property, focusing on the implications for long-term financial goals.
Deep dives
Celebrating Financial Milestones
The podcast highlights the journey towards financial freedom, showcasing personal stories of financial achievements. Guests share their experiences of hitting significant financial milestones, such as becoming a millionaire or paying off large debts. These narratives serve as inspiration for others working toward their financial goals, emphasizing that even small milestones like managing student loans effectively can be impactful. Encouraging participation from listeners who have reached various financial milestones aims to foster a community of support and encouragement.
Student Financial Literacy Initiatives
The episode discusses a free student webinar aimed at enhancing financial literacy among medical students. This webinar covers essential topics such as managing student loans, budgeting, and understanding retirement accounts, which are crucial for building a solid financial foundation. It stresses the importance of learning to manage finances before entering the workforce, as early knowledge can lead to better financial decision-making later. Bringing in expert guest speakers, the webinar also offers attendees the opportunity to ask questions, making the learning experience more interactive.
A Resident's Journey Back to Broke
Greg, a third-year resident in physical medicine and rehabilitation, shares his journey of returning to a 'broke' status, which signifies a turning point towards financial stability and growth. He discusses his financial strategy, which includes merging finances with his fiancé and maintaining a balance between student debt and growing assets. Highlighting that he has $185,000 in total assets while managing $135,000 in student loans, he reveals how maximizing savings and investments during residency is feasible. His insights underline the impact of early financial education and strategic financial planning during training.
Real Estate Considerations for Residents
The discussion shifts to navigating the complexities of homeownership and rental properties for medical residents. It explores the decision-making process involved in converting a primary residence into a rental property, focusing on critical considerations such as mortgage implications and market conditions. It emphasizes the need for residents to evaluate whether maintaining their current home as a rental aligns with their long-term financial goals. Moreover, key financial concepts such as capital gains tax exclusions and the importance of understanding mortgage contracts are highlighted to guide future real estate decisions.
Today we are talking to a resident who is already back to broke. He had a leg up from fantastic parents who were able to help pay for his first few years of medical school. He is a great example of showing that you can get started on your financial journey before you even get your first attending paycheck. His secret to success is educating yourself early, living like a resident, and being extremely conscious of where you are spending you money. His next goal is aggressively paying off his student loans as soon as he is out of training. After the interview we are talking about flipping your home to a rental property for finance 101 and if that is a good idea or not.
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