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Finances 80/20 - How I Paid Off My Med School Loans & Investing Strategy - YouTube
Channel: Kevin Jubbal, M.D.
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All right, all right.
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Grandpa Jubbal has a
lot of thoughts on this.
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Wednesday at one a.m.
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Why the hell am I up at
one a.m. making a video?
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So I have sleep-onset insomnia.
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Had it ever since I was a kid.
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And I remember, even at sleepovers,
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I'd be like, "How come everyone's asleep,
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"and I'm the only one who's awake?"
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Just kind of the way it is.
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I always get this... Not always,
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but I often get this burst of energy
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in the middle of the
night, very convenient.
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Actually, during COVID,
I was able to sleep.
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I had this routine down.
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I was sleeping by 10, 11 latest,
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every day for two months straight,
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and I was waking up five, six a.m.
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It was awesome.
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Then I went to Monterey,
definitely was not sleeping early.
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Came back here to Vegas.
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And now last night, rather,
this morning, had a bike ride.
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And last night, I couldn't
sleep until four a.m.
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I had to wake up at six
a.m. for the bike ride.
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So then I go on this bike ride,
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then I nap during the day.
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So now, because I napped
for several hours,
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now I can't sleep.
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So, make a YouTube video.
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I have a bright light
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'cause that's gonna make things better.
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Sometimes, these late nights,
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they help me reflect.
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I was listening to some Blink-182.
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Brings me back to elementary school days.
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It made me think about why I do what I do.
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And I think a lot of us
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kind of have it in the back of our minds.
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We don't reflect on it
explicitly that frequently.
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It just got me thinking
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that I feel so lucky, and
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I feel so grateful to you guys
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because I'm able to do what I do,
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whether that's Med School
Insiders or starting Memm
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or just doing these YouTube videos, right?
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This is fun.
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The coolest thing is when I
get comments from you guys.
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There's this one comment
from a few days ago.
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And this person's like,
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"Hey, I don't know if you're
gonna read this message,
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"but I'm a student who's not even pre-med.
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"And I watched these videos,
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"and I implemented these tactics,
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"and now my grades are way better,
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"and I'm a lot happier."
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And I'm like, that's why
I do this stuff, man.
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It feels awesome.
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So thank you.
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And the trolls too.
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Sometimes the troll comments are...
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They're so creative and so hilarious.
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Anyways, just feeling the appreciation,
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feeling the love, wanted
to share that with you guys
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before I dive into this
video on finances, on money.
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(light music)
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So on the Med School Insiders channel
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on this upcoming Saturday...
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Or I guess when you watch this,
it'll be this past Saturday,
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I made this video
summarizing Ramit Sethi's
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"I Will Teach You How
To Be Rich", the book.
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I really like Ramit Sethi's content.
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I think it's hilarious,
his no-nonsense attitude.
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At the same time,
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finances, they're super simple.
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I got into personal finance and investing
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essentially when I was towards
the end of med school, 2016.
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I read "The White Coat Investor",
the book, not the blog.
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There's a blog that has
a lot of information,
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but the book is very
condensed, high-yield stuff.
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And I read the book.
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Probably told me 80% of what I
needed to know, to be honest.
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But then from there, I was
like, "Well, this is awesome.
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"This is really important,"
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because finances are very important
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to living a life on your own terms.
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From there, I probably read another
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eight or 10 additional finance books.
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"Bogleheads' Guide to Investing"
was a really good one.
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I read the Tony Robbins book.
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It was okay, kind of verbose.
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Anyways, I'll have a link
below in the description
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for my favorite finance books.
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The thing is, this is really simple stuff.
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And while we should be
covering this in high school,
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we should have courses on basic finance,
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things like that, we don't.
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But that shouldn't be an excuse.
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We can all learn these things on our own.
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And Ramit's book is really good.
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But if I'm being honest, I
don't think I learned anything.
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It is a great book.
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Again, nothing against Ramit or his book.
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But just that this subject area,
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if you read a couple books
and if you spend some time
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on the personal finance
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or financial independence sub-Reddits,
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that's most of what you need to know.
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All right, my approach to finances
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in college and in medical school.
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So in college, very frugal.
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Finances were very tight.
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I did pay for college and
medical school on my own
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without any financial help from my folks.
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Now, in college, I did have a job.
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I was doing research on
inflammatory bowel disease,
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and it was actually paying $15 an hour.
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I was gonna do it for free,
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but I was able to get paid
for research, which is great
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because it's great for my
medical school application,
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and I was making money,
which could help pay for,
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you know, decrease my loan
burden, pay some tuition.
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In terms of actually tracking
my expenses, I used an app.
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I've used a few different budgeting apps.
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None of them are really great.
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They're pretty simple.
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I've used Spendbook in the past.
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I don't think you can even download it
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on the App Store anymore.
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The exact app isn't that important.
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Essentially what these apps do is,
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you categorize the expense,
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you say the dollar amount,
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and you put a note, and
then you have a date.
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So then you can reflect back.
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You can look at either this month
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or reflect back on previous months
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and say, "Okay, how much did I spend
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"in this category versus that category?"
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And then you can adjust your spending.
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I've never actually had
a strict budget, per se.
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But what I've done is track
every expense, every expense,
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like laundry, two dollars of quarters,
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I will track that in my app.
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That's what I did for years,
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for all of college and
all of medical school.
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I no longer do that, but we'll
talk about that in a second.
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It's pretty quick to do this, by the way.
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So if you just pull up your app,
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it should take no more
than 10 or 15 seconds.
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So if you're at a restaurant or whatever,
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you just quickly do it, done.
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And then that data, I think,
is very, very valuable.
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The important thing in college
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was me getting my fundamentals down.
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So living below your means.
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I mean, can you say
living below your means
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when you don't even have an income
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and you're taking out student loans?
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Anyways, I was being very frugal.
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I was being very careful not
to spend more money than I had.
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I didn't need the new iPhone
or whatever every single year.
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I didn't need to go on
some expensive trip.
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I could still have fun and spend money.
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Simpler times, actually,
now that I think about it.
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So when establishing foundations,
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I was learning about credit.
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I was opening up... I only had
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one or two credit cards at the time,
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but always paying them on time.
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What I used to do is, actually,
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I was afraid to do automatic payments
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from my bank account to my credit card,
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which was kind of silly,
and I would manually do it.
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But then one time, I miscalculated,
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and I ended up paying
like 40 cents in interest.
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I've never paid interest
except for that one time.
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But I paid 40 cents in interest
because I miscalculated
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how much to pay from my
bank to the credit card.
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And then after that, I
was like, "You know what?
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"This is stupid."
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And I just set up automatic payments
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from my checking account
to my credit card.
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And then medical school, more of the same,
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living below your means.
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But I got really into
credit card churning.
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That, I think, was the
third year of med school,
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second or third year of med school.
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I was doing it for several months,
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actually for a couple years
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leading up to residency
interviews so that,
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when it was time to go
into residency interviews,
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and I went to like 20 cities,
20 different interviews,
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some of them were in the same city,
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but these plastics programs,
they don't coordinate.
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So I went to Cleveland Clinic,
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and then flew back to San Diego,
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and then a couple weeks later
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flew back to Case Western, same city,
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and then flew back.
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Having these points with airlines
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for free flights was so clutch.
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I saved tens of thousands
of dollars, seriously,
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from credit card churning.
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So that's why I'm really passionate
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about sharing that with you guys
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because I know that you're
probably strapped too
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if you're a student.
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And if you have medical
school interviews coming up
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or you have residency
interviews coming up,
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then that's very valuable.
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So I actually have a playlist
on credit card churning.
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All right, next, let's
talk about how I recommend
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that you approach finances.
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Let's start with black-and-white thinking.
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Black-and-white thinking is
very common because it's,
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in all areas of life,
especially in finance,
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because it simplifies things.
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And it's good when
you're first starting out
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to kind of understand the basics.
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But it's not the truth.
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The truth is in the nuance.
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The truth is in the gray area.
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For example, debt.
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You have some financial experts who say,
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"All debt is bad.
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"Pay car cash.
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"Pay for your home in cash.
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"Pay everything in cash."
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I understand why, right?
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The black-and-white is
that, okay, people can't...
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They have poor impulse control.
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They're gonna spend money
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if they save it up in their bank account,
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and that's why you should just buy cash
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and not take it out, not have any debt,
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because otherwise you're gonna get
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into a whole load of trouble.
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Yeah, that makes sense
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if you don't have financial discipline.
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But if you are disciplined
and you're able to save money
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and not just spend everything you have,
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or you're able to live below your means,
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it's actually not the best way.
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It's not the most financially sound way.
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For example, if a car...
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Let's say you buy a used car for $10,000.
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And you can buy it either cash up front,
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or you can get a loan on it
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and pay, let's say, two percent per year,
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which is a great rate, right?
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That $10,000, you could actually
invest in the stock market
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or in other asset classes
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and get greater than two percent.
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So then you would actually
end up coming out ahead
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if you invested that 10K
versus buying it in cash.
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So that's, again, the gray area,
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the nuance there that I think a lot
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of oversimplifications
will just completely miss.
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Now this is just one example,
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but use that same approach
for anything in finance.
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I mean, anything in life, really.
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But in finances, understand why.
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Why is this way of doing
things recommended?
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What is the actual reasoning behind it?
[519]
So for example, in credit card churning,
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I actually disagree with a lot
of what the community says.
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They talk about valuations,
in my most recent video.
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I don't care what the market value
[528]
of a Southwest upgraded
boarding pass is, that it's $50.
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I would never pay $50,
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so I can't actually say
it's worth $50 for myself.
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It would be worth like $10
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'cause that's how much I
would actually pay for it.
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If you get in the habit of
questioning these blind truths,
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then I think you will come out ahead
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and you'll actually achieve a state
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that is more in line
with what you prioritize
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and what is most important to you.
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All right, so now, finally,
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let's talk about my current approach.
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I used to be all about being super frugal
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and saving a dollar here, a
dollar there, because I had to,
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because I was in debt,
I was taking out loans,
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and I didn't have financial help.
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But nowadays, now that I'm out
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and I'm starting my own business,
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the important thing to realize is that
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you can always make more money
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but you can't save past a certain point.
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Otherwise, your actual
quality of life will suffer.
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For example, if you're already
pinching pennies on food,
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and then you wanna save
another $100 every month
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on your groceries or
restaurant or whatever,
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then your quality of
life is gonna take a hit.
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But if you just make an extra
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$100, $500, $1,000 per month,
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which you definitely
can in this day and age.
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It's an amazing time to be alive
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with social media and all
these online businesses
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that are so easy to start.
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Then that's just a better
way of approaching things.
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So a lot of my optimization
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has kind of shifted over the years
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to the current state.
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So the current state, I
don't actually track anything
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anymore in an app.
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I haven't done that in a few years.
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But I do use Mint.com for
all of my personal expenses.
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And it will automatically track
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every credit card transaction,
and then categorize it.
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I review it once a week.
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Sometimes the categories are wrong.
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But this is useful because I
can track fraudulent charges,
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and then, again, I can categorize
and reflect on my spending
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and see if I can spend
more in a certain area
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or if I wanna cut back.
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The other tool I use is Personal Capital.
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This is my favorite tool
because, every morning,
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it sends me an email with all
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of my credit card transactions.
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I have like 35 credit
cards because of churning.
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So I can't actually check the website
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of all these cards every month.
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So by having a single
email, I can track, again,
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for fraudulent charges
and just kind of see
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what's going on with my
credit cards every single day.
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And then the other thing
with Personal Capital is,
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it tracks your net worth.
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When I first started
using Personal Capital,
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I had started residency.
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I had a negative net worth
'cause I still had loans.
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And it's just so satisfying
to see that number hit zero
[653]
and then slowly start to become positive.
[655]
And it tracks your loans,
[657]
your bank accounts, your investments.
[659]
It's like my favorite financial tool.
[661]
And if you wanna sign up,
[662]
there's actually a $20 referral link
[664]
down in the description.
[665]
And then the third tool is Quickbooks,
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which is for my business expenses.
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That's not really that important here.
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Now in terms of the
actual institutions I use,
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I use Vanguard for most of my assets,
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for my IRA, for my taxable accounts.
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I use E-Trade because they
have a good solo 401(k) option.
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If you're self-employed,
you want a solo 401(k),
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E-Trade, in my opinion,
is the best option.
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Not gonna be applicable to most people.
[686]
And the third thing I Use is Schwab.
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Schwab has this checking account
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where you can use any ATM,
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and they will reimburse
you the actual fee.
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So that's super clutch,
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especially when you're
traveling internationally.
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And Schwab also have a
very small allocation
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for fun trading, fun stocks.
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Most of my investing is
actually indexed funds.
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So I go with Vanguard.
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I do VTSAX, which is the
total domestic stock market,
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and the VTIAX, which is the total
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international stock market.
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Because I'm young, I'm currently 29,
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I do not have really anything in bonds.
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I'm 70% VTSAX, that's 70%
domestic, and 30% international.
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Now this is a point I've
done a lot of research on.
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And the short answer is,
there's no right answer.
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A lot of people, including Jack Bogle,
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the founder of Vanguard,
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said, "You know what, you
don't need international.
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"These U.S. companies are
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"so well diversified internationally
[733]
"that it's not necessary."
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And diversification is very
important because you want to...
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If you have all your eggs in one basket,
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and then those companies
don't perform well,
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then you're gonna be in a world of hurt.
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So diversification, essentially,
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is hedging your downside risk
[748]
so that you're not gonna be caught
[750]
with your pants down sort of thing.
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So one school of thought says
[753]
you don't need international exposure.
[755]
And then the other school of thought says
[757]
you should actually just weigh
[758]
the entire world stock market,
[760]
which is about 55% U.S.
and 45% international,
[764]
because you don't know what's going
[765]
to perform better long-term.
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So recently, yeah, the U.S.
has performed a lot better
[769]
than the international markets.
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But we don't know what's gonna happen
[771]
in the next 10, 20, 30, 40 years.
[773]
Again, there's no perfect answer here.
[774]
But I said, "Okay, I
understand both sides.
[777]
"I'm gonna choose
something in the middle."
[778]
So I did 70/30 rather than 55/45 or 100/0.
[782]
70/30 is what I'm happy with.
[783]
Now, in terms of picking individual stocks
[785]
versus doing broad market indexed funds,
[787]
again, I do the latter.
[789]
The individual stocks, I'll do one or two
[790]
here or there in my Schwab account.
[792]
But 99% of my portfolio is in
broad market indexed funds.
[796]
During this whole COVID situation,
[798]
this has made me even more
confident in this approach
[801]
because I have some very smart friends
[802]
who are very savvy investors
[804]
who are able to put a lot of
time, energy, and they have
[807]
a lot of knowledge and
background with investing.
[811]
And even then, they
haven't beat the S&P 500,
[813]
despite the dip, despite
doing all the market research
[815]
and looking at the balance
sheets and all the stuff.
[818]
And they're stressing out
[819]
because it's a lot of money on the line,
[820]
and they're not doing
as well as they should.
[823]
And they're down, now
they're breaking even.
[825]
It's just not worth it.
[826]
You're very, very unlikely
to beat the market long-term.
[829]
In the short-term, sure.
[831]
I made a couple plays recently.
[832]
I made a few thousand dollars.
[833]
It was fun.
[834]
But I pulled out because
I know that, long term,
[836]
I am not going to be able
to beat the market reliably.
[840]
The other thing here is,
okay, maybe you think you can.
[843]
However, is it worth the
actual time right now?
[846]
The way I see it is, at
this stage in my life,
[849]
my net worth is gonna be lower than it is,
[851]
let's say, in five or 10 years.
[852]
At that point, sure, one or two percent
[854]
is gonna be a huge difference.
[856]
But right now, one or two
percent isn't that big of a deal.
[858]
So at this point in my life,
[859]
I should actually spend less time worrying
[861]
about investing and
optimizing and all that stuff
[863]
and focus on building my business.
[865]
That's actually a much better ROI,
[866]
whether that's Med School Insiders or Memm
[869]
or the next company after that.
[870]
So for that reason, I focus
on just auto-investing.
[873]
Every single week,
money automatically goes
[875]
into these VTSAX and VTIAX.
[878]
I don't have to do anything.
[879]
It's automatically scheduled.
[880]
And that means I'm getting
80% of the performance
[883]
with zero percent of the work,
[885]
and I can focus more of my time
and energy on my businesses.
[888]
All right, guys, that is it.
[890]
Thank you for watching.
[891]
It's now 1:30.
[893]
I'm gonna try to get some rest.
[894]
See you guys in the next one.
[897]
(light music)
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