Dear 20 Year Old Me (From a 31 Year Old Millionaire PA-C)

If you’re in your twenties and navigating the early years of your medical career, this letter is for you. I'm sharing the pivotal financial decisions I made in my twenties that allowed me to become a millionaire at 31. What I learned in my twenties shaped my approach to money, debt, and investing, and I hope it can guide you too.

Early Career Decisions and Managing Debt

When I graduated, I was saddled with $161,000 in student debt, a common scenario for many in our field. Like many, I initially followed Dave Ramsey and his advice to pay off debt aggressively. By committing to an intense work schedule, I cleared this debt in just 16 months. This decision, while providing immediate relief, came with its own set of long-term financial implications.

The Real Cost of Early Debt Repayment

Yes, I was debt-free quickly, but let's talk numbers. Had I opted for a less aggressive repayment plan and invested the surplus income, the long-term gains could have dwarfed the benefits of early debt clearance. Here’s a clearer picture:

• Monthly cashflow during debt repayment: Aimed to pay approximately $10,642 a month towards debt.
• Interest saved versus potential gains from investing: While I saved around $65,000 in interest, the opportunity cost of not investing that money was almost $3.2 million by the time I would retire, assuming 8% investing returns.

Opportunity Costs and What I Could Have Done Differently:

Looking back, I realize that if I had balanced paying off debt with investing even a portion of my income, the financial outcome would have been significantly better. Imagine investing $8,000 monthly for just two years during the same period—it could have grown to over $200,000 in investments by the end of those two years.

The Importance of Financial Education in Your 20s:

My journey taught me crucial lessons about money management. It highlighted the importance of understanding all facets of personal finance early in your career. Knowledge isn't just power—it's profit.

Do I Regret My Choices? Nope! No regrets. Every step, every decision taught me something valuable. However, for those of you at the start of your career, take this as a cautionary tale. 

So if you are ready to take control of your financial future, start by educating yourself on investing and create a plan that allows you to enjoy the benefits of financial freedom sooner rather than later. Remember, the decisions you make in your twenties can define your financial trajectory for decades to come.