Six-figure student debt doesn't disqualify most physicians from practice ownership. Here's how lenders weigh cash flow after overhead, debt service coverage and your own production, and how to calculate each before you negotiate price.
|Articles|September 18, 2009
Q&A: When to save, when to pay off debt
Author(s)Joshua Barnard, ChFC
A general rule when deciding between paying down debt or savings is to estimate the difference between the interest rate of the debt and potential return on investment.
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Q: I am starting to make more money and don't know whether I should save or pay down student debt. Any suggestions?
However, debt reduction is an important part of any financial plan, and the emotional rewards of paying down debt can sometimes outweigh the financial advantages. Before deciding on the best place for that extra income, ask yourself: Which action would feel best-paying off debt or saving? A good strategy is often the one that creates confidence and security.
Answers to our readers' questions were provided by Joshua Barnard, ChFC (left), of North Star Resource Group in Miami, and Medical Economics Consultant Todd D. Bramson, CFP, of North Star Resource Group in Madison, Wisconsin. Barnard and Bramson are registered representatives and investment adviser representatives with CRI Securities LLC and Securian Financial Services Inc., Members FINRA/SIPC, Registered Investment Advisers. CRI Securities is affiliated with Securian Financial Services. 86061/DOFU:09.09
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