OTS 172: From OT Debt to Financial Freedom
- Jayson Davies
- Mar 10
- 40 min read
Updated: Jun 17
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Welcome to the show notes for Episode 172 of the OT Schoolhouse Podcast.
In this episode, Doug Vestal, author, and financial guru, uncovers the path to financial freedom for occupational therapists. He will dive into the heart of money management and share how he and his wife tackled $150,000 of student loan debt in three years and offer invaluable strategies to help you do the same.
From budgeting tips to investing insights, Doug equips OTs with the tools to boost their financial health and leverage financial stability to become more effective practitioners. Whether you’re an OT seeking to start your own practice or simply aiming to get out of debt and plan for the future, this episode is your roadmap to financial empowerment. At the end of this episode, we had a giveaway for Doug's new book. Unfortunately, the giveaway is now over. However, you can get your copy of Doug's book here. (Amazon Affiliate Link)
Listen now to learn the following objectives:
Learners will identify the importance of financial literacy
Learners will identify strategies to help pay down debt
Learners will identify budgeting strategies and how to allocate funds effectively
Guests Bio
Doug Vestal, Ph.D. helps OTs achieve occupational choice and freedom through private pay practice. He co-founded The Functional Pelvis with his OT wife, Lindsey, and has over a decade of experience managing an OT private practice. Before working with OTs, he spent 15 years in senior management on Wall Street, including as Global Head of Counterparty Credit Risk at a major investment bank.
Drawing on his business acumen and passion for entrepreneurship, he has helped hundreds of OTs build successful private pay practices. Doug holds a Master’s in Financial Mathematics and a Ph.D. in Applied Probability.
He is dedicated to helping OTs gain treatment, time, and financial freedom on their terms. He is the author of the only personal finance book for occupational therapy practitioners called "Financial Freedom for OTs: A Guide to Building Wealth Without Burnout"
Quotes
“Number one limiting belief, I think, is people are thinking that money is the root of all evil. And in fact, money is just a tool. Right? In and of itself, it's just paper. Right?.”
-Doug Vestal, Ph.D.
“So I know money in and of itself is not an activity…managing your money, budgeting your money, saving your money, investing your money… Money is an essential ADL .”
-Doug Vestal, Ph.D.
“If I'm able to accumulate more money in my life, it allows me to give back to the causes and to the people that are important to my life, and I have a lot more agency and choice. And that's a really beautiful shift to see a lot of my students go through.”
-Doug Vestal, Ph.D.
“A lot of our thoughts around money are very subconsciously driven by our experiences as when we were children. And so I always ask people to sit in a quiet place and recall, like, keystone memories from your childhood.”
-Doug Vestal, Ph.D.
“Focusing and knowing that it's up to you to decide how you direct and use the money that you have is really empowering.”
-Doug Vestal, Ph.D.
“The only way to beat inflation is to start investing”
-Doug Vestal, Ph.D.
Resources
👉 Financial Freedom for OT's Book (Amazon affiliate link)
Episode Transcript
Expand to view the full episode transcript.
Jayson Davies
$120,000 that's the debt I incurred to earn my masters in occupational therapy degree back in 2012 compare that now to an estimated $213,000 needed to complete a top ranked ot program today, and my debt just looks like chump change. And yet this is happening every single year. The unfortunate reality is that every year, ot practitioners are entering the workforce with over $100,000 in debt, if not more, and this leads to way too many practitioners having to work multiple jobs, leave their hometowns for higher paying travel opportunities, or potentially even leaving the field altogether in order to pay off their loans. And while this problem isn't exclusive to school based ot practitioners or OT practitioners in general, this is one that I have heard about from many school based ot practitioners in my community, on social media and in replies to my email newsletter. That's why today I've invited Doug Vestel, author of financial freedom for OTs, a guide to building wealth without burnout, onto the show to share how ot practitioners can move from overwhelming debt to financial freedom. While Doug isn't an OT himself, his partner is, and together, they've navigated the journey from major debt to financial stability and in New York City of all places. So if you're in the process of paying off your student loans while trying to build an emergency fund, or if you are in the post loan stage and are working toward building your wealth, this episode is for you. We'll explore why money is often neglected as an ADL Practical Strategies for Managing debt and growing wealth for retirement, all from an occupational therapy practitioner standpoint. Oh, last thing, be sure to stay tuned until the very end of the episode, because I have a very special surprise for a few of you that do now. Let's dive in with Doug Vestal.
Amazing Narrator
hello and welcome to the OT schoolhouse podcast, your source for school based occupational therapy tips, interviews and professional development now to get the conversation started, here is your host, Jayson Davies class is officially in session.
Jayson Davies
Doug, welcome to the OT school house podcast, and congratulations on getting your first copy of your new book. That's awesome.
Doug Vestal
Yeah. Thank you so much. Jayson, I'm really excited to be here and talking with you absolutely
Jayson Davies
How does it feel to actually have this book in your hand?
Doug Vestal
I actually have it right here. I mean, it feels absolutely amazing. We were talking before you hit record. This is like the first time that I physically held a copy of it. And, you know, I've only seen the PDF before, and it just is an enormous sense of relief that I've actually gotten it to print and that it's going to be out in the world.
Jayson Davies
Yeah, financial freedom for OTs, it's a great I haven't gotten my hands on it yet, but I will, and I'm excited to share this with everyone, both here today in podcast form and then the book on its own. I know it's gonna be a great help to everybody. One of the most common topics within school based occupational therapy. In fact, all of occupational therapy, you know, we almost like, I don't want to say we judge one another on it, but we often will have the conversation like, hey, how much did your degree cost, right? Like, how much in debt are you right now? And so this is absolutely needed, and I can't wait to learn more about it with you today. So yeah, thanks for being here.
Doug Vestal
Absolutely I'm so excited to be talking with you.
Jayson Davies
Yeah, as we jump on, let's start with the monkey in the room, if you want to call it, you're not an occupational therapist, you are. You are not an OT No, I'm not, yeah. So let's dive into that. How are you connected to the world of occupational therapy?
Doug Vestal
Yeah. So my wife is an occupational therapist, and we've been together 23 years, married 20 years, and her and I together founded the first private pay ot practice in New York City focused on pelvic floor therapy for pre and post naval people. And the sort of deal that we struck was my wife, Lindsay, really loves the client aspect of private practice, and she was not that interested in all of the business stuff behind the scenes. And so we made this deal where I would work on all of the business activities, so things like the marketing and the sales and the strategy, so that she could really focus on all the client facing stuff, and through that, and through working with her. And then now I support a lot of OTs that are going into private pay practice. I get to have a lot of insight into the mindset of a lot of OTs, while still being able to look at it from a bit of distance, which I think has some some value to it. And so that's that's my story with, with working with my wife, and then the hundreds of OTs that I've supported. And through this, I found that. That financial challenges and financial mindset and limiting beliefs, without and within ot hold a lot of people back who really we should be supporting, because the work OTs do is absolutely incredible.
Jayson Davies
Yeah, absolutely. And I, like you said, I know you're working with people who are trying to start their own business, and from my experience, right? Like one of the things that accelerated my ability to focus on my business the OT school house was paying off my student loans. Like we made it a mission to pay off our student loans. We did it in about eight years. Got a little creative with it, but I didn't feel like I could really focus on my business or focus on buying a house, or focus on, you know, any life big things, until those student loans were paid off, because it was like $1,200 a month or something like that. So I'm assuming that's kind of something that led to the creation of this book, to student loans. Yeah,
Doug Vestal
so for us, we paid off. My wife graduated from NYU, so she had about 150,000 of student loan debt, and a big turning point for us was really getting serious about paying that off. And so, and I talk about in the book, we actually paid it off in three years through a lot of creative living situations that we did in New York City. And looking back, she graduated in 2011 so 14 years ago, a lot of her classmates still have over six figures of student loan debt, and they don't have a lot of occupational choice in their life, because the decisions they have to make are based upon what they can afford each individual month, not necessarily based upon their values, and so what I'm hoping with the book is that OTs learn strategies to pay off their student loans much faster than they thought was was possible, find ways to increase their income, start saving for retirement, because at the end of the day, we're all hopefully live long enough that we're going to retire and we have to replace that regular, steady paycheck if we want to have a fulfilling retirement.
Jayson Davies
Yeah, yeah. So obviously, student loans is one of the big ones, but, and you mentioned kind of the paycheck to paycheck, but as you were talking to OT practitioners looking to start their business, or even ot practitioners that weren't looking to start a business. What were some of those key things that just kind of stood out to you that were like, oh my goodness, like, if only you knew this, I could help you, or if only you knew this, you'd be be able to get along. So what were some of those things? Well,
Doug Vestal
I think one of is really just not even acknowledging the role that money plays in our life, you know. And I really think I talk about it that money is an essential ADL. So I know money in itself, is not an activity, but I use it as an umbrella term, because managing your money, budgeting your money, saving your money, investing your money. So I use the just catch all phrase, like money is an essential ADL, and it's important to recognize the role that it plays, because those things that you talked about, Jayson, of wanting to start your business, really focus on that. That requires, of course, being resourceful, but it also requires resources, you know, and money gets a really bad rap in the popular media, because everyone focuses on the greedy, you know, CEOs and everybody else, but the end of the day, money is a tool, and you can use it to advance your calls and do good things, or you could use it for, you know, nefarious purposes. And every ot that I've met wants to make an impact, where they want to contribute to the community. And at the end of the day that takes resources to be able to do it, because it either takes your time, so you're foregoing other opportunities, or you are, or it requires your financial resources. And so a lot of the OTs that I mentor, that go into private pay practice, really have this mindset shift, especially around charging, that we could do a whole podcast around, you know, charging cash pay fees. But they really have the shift of going, if I'm able to accumulate more money in my life, it allows me to give back to the causes and to the people that are important to my life, and I have a lot more agency and choice. And that's a really beautiful shift to see a lot of my students go throug.
Jayson Davies
Yeah, yeah. And I really like that. You mentioned ADL or money as an ADL. You kind of teased a few different areas of that. Let's dive into that a little bit. What are a few of those? If you want to call them sub ADLs or IADLs, maybe a money, yeah.
Doug Vestal
So I think it comes down to a few basic ones. So it's budgeting your money, right? So even, and we can talk about this, because a lot of people, I find they have a lot of stress when it comes to their financial situation, there's a lot of guilt and a lot of shame, and so what I see a lot is a lot of avoidance behavior. People have, you know, it's they won't even look at their bank accounts because they're scared of what they're going to find. And so the first step is really thinking about budgeting as an ADL. You know, where are your dollars going? And are you aligned from a values perspective, if you look at your spending on a monthly basis or over a six month basis, are are you really contributing to the things that light you up in life, that you find value in? And a lot of times, we find that we're spending money in places that aren't actually contributing to our overall satisfaction. And so it's a great exercise to start to shift and go, Well, maybe I can cancel this subscription, or maybe the type of house I live in is not as important to me as it is for other people. So I can downsize, so I can save some extra money to throw off, throw to my student loans. Maybe it's not important to me to drive the nicest car, and I'm fine with driving a 10 year old beater car, because that enables me to have a little bit of extra money to put towards my student loans and go on adventures with my kids, right? It's really getting on a conscious and intentional spending plan to direct that money, and then the next is really starting to invest. A lot of people are really scared to invest their money. They think it's really super complicated. They think that it's something that only rich people can do. But in fact, in this day and age, you know, it takes five minutes to set up a brokerage account with Vanguard or fidelity, and you can start investing $10 a month, let's say. And so those, those are the two big ones that I see the most, the budgeting aspect and then the investing aspect.
Jayson Davies
Okay? And you mentioned, you know, some people think of investing for those who already have a lot of money, and when it comes to budgeting, there's obviously some barriers there as well. What are some of those financial maybe tidbits that we picked up over the years that maybe aren't the best ones, and maybe they're even setting us back as opposed to pushing us forward.
Doug Vestal
Yeah. So I call those like limiting beliefs around money, and it really happens, I think, coming from childhood. So if we think about and I have this exercise in the book, but I think a lot of our thoughts around money are very subconsciously driven by our experiences, as when we were children. And so I always ask people to sit in a quiet place and recall like Keystone memories from your childhood, right? We all have these Keystone memories that we replay over and over again. We likely don't even share it with our spouse or our closest friends, right? But they made a big impact on us, and oftentimes there is a through line of money in those Keystone memories. And so I always ask people to sit down in a quiet, quiet room and really sort of meditate on those memories and see what role money played, because those scripts that we were fed from a very young age influence how we are as as adults. And that's where I think a lot of the money trauma comes from. That we experience is that we had parents who told us that money was the root of of all evil, or thinking about money makes you greedy, or, you know, rich people are bad, all of these sorts of things that get in our way of having a healthy relationship with with money. So number one limiting belief, I think, is people thinking that money is the root of all evil. And in fact, money is just a tool, right? It's in of itself. It's just paper, right? It's not or zeros and ones on a computer screen. It, in of itself, does not have a bias or an agenda. It's the people that have money who have a bias or agenda. So it's really like, what you do with it, right? It's up to you. It's, it's like having a knife. You know, like you could do that. You could perform surgery with that knife and cook a great meal for your family, or you could go out and choose something more nefarious. And I think just focusing and knowing that it's up to you to decide how you direct and use the money that you have is really empowering. It doesn't make you a bad person. In fact, it enables you to do a lot more good in the world. And that's the second limiting belief, I think, is that a lot of OTs will avoid thinking about money, because they feel like if they do good in the world, they don't need to focus on money. But the fact is, is that financial freedom allows you to do more good. It allows you to contribute to causes that you really want to support. It allows you to have occupational choice and get out of toxic work situations so that you can become the therapist that you always dreamed of. It allows you to drop down to four days a week so you can spend an extra day volunteering at your your kids. School, right? It allows you to put more emphasis on the values that you you actually have.
Jayson Davies
Yeah, absolutely, I, I agree, and it's hard from the OT perspective. I mean, even early on in my career, I had to make some choices right around money, around picking a job and fun story, actually, I haven't told this one in a long time. After about a year of being an OT in a school based realm as a contracted school based OT, I think my I was being paid hourly, but my salary would have been probably around 55 to 60,000 if I had added it all up, that was my first job out of out of school. A year later, I took an interview at a school district that was about an hour away from home when I was only working like maybe 15 minutes from home before, but the pay was starting around $105,000 a year. Yeah, an extra 50,000 Right? Like easily. Not to mention the benefits were improved, because it was a district job versus a contract job, and there are so many benefits. But the downside is it was an hour away from work. My wife actually thought that if I took that job, my now wife thought that if I took that job, we were basically over like, she's like, Oh, you're never gonna see me. You're never going to have time for me. You're always going to be driving. And that was a very tough decision, right? Like trying to figure that out, and me reassuring her, like, look, I can still have time to come to your house and you'll be over here, and all that fun stuff, right? That we that we have in relationships, but money was definitely a key aspect in that, because, like you said, I had a plan. A lot of that extra $50,000 that I was making every year went straight to my student loans to pay off those student loans so that I could get to a point where I didn't have to worry about paying an extra $1,500 or $1,200 or whatever it was, every single month for the degree that I held. And so this really does impact us really early on in our careers, obviously, money, and yeah, it's definitely something that I'm glad we're having a conversation with. And kind of also leads to the idea that OTs don't talk about money and not just because of the reasons that you talked about like there's that taboo of not talking about money at work with your colleagues. There's taboo about not we're talking about money with your significant others. Me and my wife, we're very open about money. Our accounts are connected, but I know friends of mine that like they've been married for longer than my wife and I, and they're still very separate. With their money, everything is completely separated. And I'm not saying that to say one way is right, one way is wrong. I'm just saying that it's different, and a lot of us aren't talking about it. And so I think that's why it's so important to have this conversation. So I don't know if anything I said prompted anything for you to think of.
Doug Vestal
Well, yeah, and just to add on to that. So, you know, money, arguments around money are the leading cause of divorce in the United States, so more so than arguments on any other other topic. And so it's really something that we can try to avoid it for a long time. But, you know, it's kind of like your mental health and physical health, like with your financial health, if you avoid it, it's eventually going to catch up with you. And so having the ability to talk to your spouse about it, your significant other, you know, even when you start a relationship, making sure that you're on the same page financially, because literally, like most of the big Keystone decisions you make in your life, are going to have some element of money. Always say, like, look at Maslow Hierarchy of Needs. You know, every single line of that pyramid has money as a requirement. As you go up that Maslow hierarchies of needs, like, it's there from from day one, and we've just been sort of conditioned over time to downplay its importance. But we're all walking around incredibly stressed about money, so why don't we just start talking about it and have strategies to deal with the stress and get out of that state?
Jayson Davies
Yeah, yeah, absolutely. All right, let's take a step back earlier. You mentioned the two main areas that that people should probably be focusing on is budgeting and investing. So let's kind of break down those two really quickly here. When it comes to budgeting, I have over the period of my money making life have gone back and forth with over budgeting versus under budgeting. And when I say over versus under budgeting, I'm not talking about like the amount in dollars. I'm talking about like how detailed I get, you know, like, I've got 23 categories one year, and then the next year I've got like, five, and I just go back and forth. I'm like, How much do I really need to kind of break this down? How much time do I really want to invest in this? Right? What are some tips that you kind of have for those who either a don't have a budget or, like. Me kind of struggle with figuring out which way to just kind of how to actually make it consistently in my life. What are some tips?
Doug Vestal
Yeah, yeah. So the what I recommend is 5030, 20 budget, just round numbers. So 50, no more than 50% of your income should be an in fixed expenses, so things like your car payment, your mortgage payment, or your rent payment, student loan, things like that. Then 30% for variable stuff like gyms, you know, the food that you're buying, any subscriptions that you have, and then 20% for investing. And if you just can invest 20% over a decade, you will become financially free. The math is on your side. It's just pretty much guaranteed that's going to happen. It's not going to happen within two years, but it will happen within like 20 to 25 years. And so for me, personally, I don't even really look at it at a super granular level, I look at, are we with the 5030, 20, and so we will just put all of our fixed expenses in that category. Are we at 50% we at 60% 70% and then the thing that's really important, because it's so hard to the reason why budgeting gets such a bad name. And I actually hate budgeting, like I wrote a book on personal finance, but I hate budgeting, which may come as a surprise to some people, but it's because I don't want to, like, sit there and count receipts and look at how much I spent on gum and mints and everything, like, there's just more pressing things to tackle. But my biggest tip is look at the big expense categories of your life. That's where you're really going to move the needle the most. And for most people, that is going to be their housing expenses, their their student loans and their their cars. If you can tackle those three categories, that is going to be the most impactful, versus switching out to the brand name cereal, and so that's where I always recommend everyone start and see if you can make big shifts in those big categories. Does that make sense?
Jayson Davies
Yeah, yeah, absolutely. I mean, I think about my life, and we have definitely kind of done that. And the other thing that I'll add is that it changes over time. Your values change over time. You know, for three, four or 510, years of your life, maybe you really value travel, and then for the next 10 years, you really value having a house or whatever it might be, right? Your values change. It could be cars. You talked about that earlier, all right, so that's the budgeting side, and I want to talk about the investing side in a moment. But first, something that always comes up, and I dealt with it for many years myself, especially when you have loans, is trying to figure out paying off loans versus investing, doing both at the same time. You talked about 5030, 20. Well, can I still put 20% away if I've got 30% of my entire budget as loans, right? What's your thought on that?
Doug Vestal
Yeah, it's a great question. So I think a lot of OTs feel financially trapped because of a really bad combination of two things. So you have really high student loan debt and relatively low salaries, and low salary increases relative to that student loan debt. And so we really have to approach it in two ways. And one is finding ways to pay off your student loan debt even faster, to free up extra money each month. And then the second is any ways that we can increase your money because you want to decrease your expenses at the same time you increase your income, so you have a lot of extra stuff to throw at your debt. What I would say is, especially with interest rates being where they are, you are much better off financially paying off your student loans as fast as possible. You know, like there's a lot of repayment periods that are 10 years, 15 years, 20 plus years, and it's kind of conditioned into us that, well, that's just the term. So it must be okay to take 20 years to pay off our debt, or 15 years to pay off our debt. But I would ask the more radical question, which is, how can you become debt free in the next five years? Like, how can you do it really, really fast? Because every dollar that you send to paying off your student loan debt is a guaranteed rate of return given the interest rate on your student loan. So if you have a 7% interest rate on your loan, every extra dollar you're sending to that you're basically saving 7% alternative if you you went and invested in the stock market, the long term average returns are around 10% so it's not that huge of a of a difference. And so sending as much extra money to your student loans and paying those off in a few years and living like a student. It right after you get out of OT school, you'll never I've never met anyone who regrets paying off their ot student loan that faster. I know you did it fast. We did it fast. I've interviewed OTs on my on my YouTube channel that paid it off in a couple of years. They've never regretted it. And so to circle back to your question, I would prioritize paying off your student loans before investing with one caveat, and that is, if you have some sort of employer match for your retirement account, I know for a lot of school based OTs there, they're not going to have that. So it might not be super, super relevant, but for others that are listening that either have a 401 K or 403 B in the 403 B comes with a match that is just free money that your employer has given you. It's baked into the cost of your employment contract and the cost of hiring you. And so if they match 5% of you know your salary, if you also contribute 5% I would set your investments up so that you are contributing that 5% and then all extra money gets sent to your student loans. And then once you are out of student loan debt, then take all that extra money that you've been saving and start investing that each and every month.
Jayson Davies
Yeah, and that's basically what I did, aside from, you know, a few months here and there, where I convinced myself that I really needed to invest and so I would, you know, dump a little bit of savings into an investment. But, yeah, I kind of am on the same board with you with that one. That's kind of the approach I took for the most part in I feel better about it because I knew that, yes, I could average in the stock market about 7% potentially, I kind of try to go the conservative route. I'm conservative when it comes to me making money. I'm very loose when it comes to saying how much I'm losing, right? So I would average up my loans and say they were 10% in reality, they were six or 7% but yeah, and I really wanted to knock out those loans. For me, I tackled the highest percentage loan first, even though it was the highest amount. I know there's different names like snowballing and whatnot. Do you recommend one versus the other? Or is it just kind of whatever works for you? What do you think?
Doug Vestal
Yeah, I talk about both strategies than the book. So the snowball method and at the Avalanche method. And so just to recap, so you can have you could go and attack the highest balance first, or you could attack the highest interest rate. So sorry, the lowest balance for us, what we did was we wrote down in Excel all of our loans. They were with no net at the time, and sort of just like, listed it down, and we didn't attack the highest interest rate, even though, long term, it would have saved money, we attacked the lowest balance. So for us, we wanted to be able to just eliminate that loan as a category. We had, like an $800 loan, and it felt so good to eventually just pay that off and not have to pay that anymore. Then we went to like the $1,200 loan, then we went to the $6,000 loan, then we went to like the $15,000 loan. And for us, that was really motivating, because we could see the progress happen very early in the beginning. And so we just felt like we were making so much momentum that that gave us the motivation to keep going forward, because it is tough to do right? You have to have a lot of discipline, and if you're not seeing that progress, it can kind of be demotivating. So I'm so glad to hear that that the alternative worked for for you.
Jayson Davies
Yeah, and I'll be again Frank, you know, it's when you're sitting down at the time I focused on mint. I'm so sad that mint doesn't exist anymore, but that's what I use to track everything. And while I focus on the highest percentage, there was definitely a few times where it's, like, this lower loan, it cost you $1,000 I've got $1,000 in the bank. I'm just getting rid of that one. Like, once it got to a certain point. I didn't want to have to deal with that one, because I knew that the following month, that's an extra 100, $200 for that payment that I can now snowball. That's where it comes from, right? Um, Snowball. That money now to one of the larger loans. So it was kind of a combination of the two, but I definitely prioritized those higher interest rate rate loans. So kind of going back to the numbers that you shared earlier, 5030, 20, 50% being your your fixed numbers, or your fixed expenses, 30% being some variable, and then 20% for for savings, if you have loans, it sounds like more that 20% is going toward the loans, right?
Doug Vestal
Yeah, exactly. I would be putting that 20% towards the loan and seeing if you can even increase it. So for us, the way that we were able to pay off 150,003 years was we downsized our living environment. We had we had just started our private pay practice and. Our kids are two years apart. I think they were four and two at the time, and we moved into a one bedroom apartment in New York City with two young kids, you know, and we put up a temporary wall in the living room so they could have space. And we just threw every extra dollar that we had so much more than the 20% like, probably 50% of our income we were just sending to the student loans to get rid of it as quick as possible. And what was amazing Jayson was it did a number of things for us, like immediately downsizing. We just felt so much more like expansiveness, you know, because we finally had a little bit of wiggle room, because we had been living paycheck to paycheck, essentially. And so we did start prioritizing, like going on date nights, which was fantastic, like with a four year old and a two year old. It was tough to find a babysitter that we trusted leaving them with. But once that happened like that, was amazing for our marriage and living in a smaller space. I mean, apartments in New York City are already small, but living in a smaller space with our young kids brought us really, really close as as a family, and we ended up staying there for close to four years, in fact, and even now, like, we live in a much smaller house than we could afford, because for us, it that's just our values, you know, like, we don't want to buy a lot of furniture And we don't want to spend time cleaning it and dealing with all the things that go wrong. We would rather spend that time and energy putting the kids in activities and doing hobbies with them and traveling with them. And so I would say, if you're looking at like that six figure loan or multiple six figure loan, you know, back into like, what do you need to be paying on a monthly basis to be able to pay it off in the three to five years. And where, in that 50% fixed expense category, can you make some of those big moves so that you now have more than 20% to throw at your student loans?
Jayson Davies
Yeah, one other thing that's really helped me, or at least with my mindset, is just hopping on Google and finding one of those calculators that will tell you how much you'll save just by paying an extra 10, 2050, bucks a month. Like, it's amazing how much you can actually save just by paying a little bit extra every month.
Doug Vestal
Oh yeah, yeah, the cost of the long term cost of debt is, is astronomical, you know. Like, you can especially true on credit cards, because the the interest rate is so incredibly high there. But with student loans like it's not uncommon to have 100,000 of student loan debt. And if you took the entire repayment period, that $100,000 would actually end up costing you about 280,000 just from interest payments, you know. And so it's like doing that calculation is very, very eye opening.
Jayson Davies
Yeah, yeah. It really helped me. Whenever I'm like, Oh, I don't need to make an extra payment this month, I use that calculator. I'm like, All right, just an extra 50 bucks a month can save me like four grand over the course of the loan. Absolutely. Let's do it exactly. Yeah, okay, for someone who hasn't looked at their student loan documents in a little while. Is there anything that they should really be able to know? Like, I don't know. I think of student loans, you mentioned, different ways to pay it off, different time lanes and percentages, obviously. Like, if there's something on that loan that someone needs to know, or do they just need to pay it off extra every month.
Doug Vestal
They I think they just need to pay it off extra each each month. Because, look, there is a difference between secured and unsecured loans and all of that stuff that people will talk about. But once you graduate, all of those loans terms are pretty much the same, right? The length of repayment might be different as well as the interest rate might be different, but the behavior of the loan itself is really the same. The purpose of the secured versus unsecured is really what's happening to the accumulated interest payments while you're still in school. So once you graduate, they're really kind of all the same. And I would just tack it in either that snowball or that that Avalanche Method, okay?
Jayson Davies
And one last question I'll ask you about about the loans. And then we'll move on to the investing side of things. Is as school based ot practitioners, there's an option for some of us, not even everyone, that we might be able to have our loans forgivens, whatever term we want to use, and you might have the right terms. But is that something we should rely on? Is this something that we should plan for? Is it something that we should not worry about and still try to pay off early? Do you have any guidance on that?
Doug Vestal
I think so there are like the repayee program. Is you so to think about the income driven repayments. Are you asking about income driven repayments? Or I
Jayson Davies
know there's income driven repayments, and then I also know that there's also, like, it's not specific to teachers, but people that work in public sector, after 10 years, sometimes they can be forgiven. I don't know how it works, totally, and I. Um, yeah, any thoughts you have on that? Yeah, so
Doug Vestal
that's the that's the repay program, and that's actually a decent program, because when the loan gets forgiven, you don't pay taxes on it. So other income driven repayment plans actually come with a big tax bill when the loan gets forgiven, so it's treated like that amount that you're forgiven at the end is treated like income to you, and so you can end up with a hefty IRS bill at the at the end of it, versus the public service loan repayment plans that sort of gets forgiven, and you don't have to pay taxes on that. So that's a good that's a good way. However, what I would say is it really depends on the individual in their work environment, because I don't think it's great for people's health and mental health to stay in a toxic work environment just to have some loans forgiven. So I would rather them switch to a higher paying place, somewhere where the benefits are greater, somewhere where they are enjoying the clients, their co workers, their their boss, because this is your this is your life at the end of the day, right? And so making sure that you are that the work environment is really great, I think, is the number one thing, and then making sure that you're not underpaid, because sometimes these positions come with underpayment from a salary perspective and long term, financially similar to what you said, you're better off finding the job that makes you $105,000 a year versus the $50,000 A year throwing that extra at the student loans, and now you have a salary of 105 and your salary increases based upon that, so now you have extra money to start giving to your retirement. Does that make sense? Yeah,
Jayson Davies
yeah, absolutely. And yeah, I again, I think every person's cases is different, right? For me, I definitely, I knew that that was an option the 10 year repayment plan. And so I think for me, I focused on the ones that weren't part of that first. But as soon as you know, it made sense to start focusing on that. I absolutely did. And yeah, it really worked out. So, yeah, I think that's it for the student debt. Anything else you want to add? I know we've focused on student debt, any other debt that you want to discuss really briefly?
Doug Vestal
No, I would just say for the others that are in the income driven repayment plans, that's not part of the public service work is, if you're eligible for that, I would enroll in it, but I would make extra payments. So it's great to decrease your monthly payments, because it gives you a little bit of financial flexibility. I just wouldn't treat that as like a 15 or 20 year endeavor. I would start looking at ways to throw extra money to the student loans, because even though you're in that program, you can send extra and you can repay it faster than the terms of the loan.
Jayson Davies
Awesome, perfect. All right, let's move on to the savings side of things. Instead of the spending all the money we have in our account types of things, let's talk about that investing side of things, and I don't know, let's just kind of assume that someone you know finally paid off their student loans, or maybe they've got their student loans low enough to the point where they're feeling confident and saying, Hey, I'm ready to start saving. You mentioned Vanguard and fidelity. Where should someone start?
Doug Vestal
Yeah, so I think someone should start with understanding, like, kind of how investing works and why you want to invest. And so for that, I always talk about compound interest. So I know Jayson, you're very familiar with compound interest, and you probably know this example, but I like to use it, which is, would you rather have $1 million today or a penny that doubles every day after 30 days. So you can have a million dollars a day, or a penny that doubles every day after 30 days. So that Penny tomorrow is going to be worth two cents, the next day is going to be worth four cents, then eight cents, and so on. What I
Jayson Davies
will say this the side of me that has a lot of things that need to be done around the house. Really want that million dollars right now, but I again, let's go with it. The penny. What does that lead to?
Doug Vestal
So after 30 days, that Penny, doubling every day, will be worth 5.4 million. And after 30 days, after 30 days is worth 5.4 million. And so the purpose of that is that, and I have the chart and the graph in the book is it really doesn't start to accumulate until, like day 26 and then you start doubling a big number, right? So it starts off really, really small. It doesn't look like anything's happening. But. But it's like building a snowball, right? Like the way to build a snowball is you start with a little rock, and you find a big hill, and you roll it down the hill, and slowly it's accumulating, accumulating, accumulating, and then now suddenly you have this humongous thing. And that's what compound interest is. Obviously, the time, like nobody's going to find this magical Penny. You know, it doesn't, it doesn't exist, but it illustrates like the power of compound interest, and that's really what you want from investing, is to take advantage of compound interest, and the main way to do that is investing in the stock market, right? So you basically go out and you buy shares of a company. So you are now part owner of Apple, or you are part owner of, you know, your favorite company that you go to, and when that company does well, if they make more and more products that other people want to buy, they earn more money, and their share price goes up. And over time your investments go up. Of course they can go down, right? But speaking broadly over the long run, and investing is something that investing is not gambling, right? Gambling is you're hoping to double your money you know immediately, or you might lose it. Investing is something that you takes decades, right? And so you're really putting a lot of your confidence in the strength of all of the companies in the US, all the companies in the world, to keep generating this economic activity. And so that's the that's the number one thing is, is knowing that it's not like gambling. Yes, it is risky. You could lose money, which is why I say don't invest any money that you need in the next five to 10 years. Is really a long term sort of thing. But that's the thing that's going to allow you to outpace inflation, right? We've seen in the last five years enormous inflation, right? Look at the cost of all your grocery bills, right? Costs are going up, and if you're not in a position where you have investments that track the cost of that and exceed it, then your purchasing power is diminishing substantially over time. And so the only way to beat inflation is to start investing. And the only way to really build financial freedom is to start investing. That's the only thing that's going to allow your money to compound and work harder than you working. And so the best place to start is really looking at any retirement plans that your employer offers. So you know, for schools, obviously there's, there's pension plans. Some will also offer 403 B's or 457 B's. If you're not in that, maybe you have a 401 K so looking at these retirement plans that your your company offers, making sure that you're maximizing your contributions to that because typically they're, they're pre tax, so it's better for it for you from a tax situation, and then making sure that you're actually going in and picking the investment choices. It's not enough just to have the account. You also have to direct where the money is going inside of the account. And the easiest thing by far to do, because I don't want people sitting there picking stocks or individual things. You want to purchase a broad, diversified, low cost index fund. It's something that is passively managed and just buys a basket of 5000 companies, and you sit back and you don't have to worry about it. But great way to do that is to do something called a target date fund. So this is a fund that will automatically purchase stocks and bonds in a certain combination, and they will readjust it according to how close you're getting to retirement. So if you're far away from retirement, it will be really super aggressive and more heavily invested in stocks. If you are really close to retirement, it's going to decrease your investment in stocks and increase your investment in bonds. And so if you had it's 2025 now if you desire to retire in 30 years, you would purchase a target date fund of 2055, let's say, and that will take care of it automatically. You don't have to do any rebalancing on your own. That is the easiest and fastest way to get started. Outside of that, you could just choose your own sort of broad, broadly diversified index funds,
Jayson Davies
yeah, it's, it's so interesting. The target date funds, those are relatively new, and I never heard about them until recently. And I was like, Oh, that's a very unique concept, and it makes sense. And the only other thing that I'll add to it is someone told me that if you want to, if you are more conservative, you could choose a target date fund that's a little bit earlier than your retirement date. And if you're you know, a little bit more of a go getter, and you're not worried as much about the stock market, you could pick a target date that's a little bit further out than your target retirement date, and it'll stay a little bit more stock heavy for a little bit longer time. So yeah, very I like how it auto adjusts everything for you, though you don't even have to worry about it. What you just. Put it in there, and it really is gonna make the changes you need to make for you.
Doug Vestal
Exactly. Yeah, it's great.
Jayson Davies
Very cool. All right, let's get to something that, yes, it's related to money, but it's actually more tied into our ability to feel good about work, hopefully and also be more successful at work. And I want to ask you, just in general, as you've worked with so many different clients, ot practitioners, how has financial stability impacted the OT practitioners that you've worked with, their ability to actually support their clients?
Doug Vestal
Yeah, it's a great question, so I would say it comes from having less stress, and when you are less stressed, you can be a better therapist, right? Like we know the impact that stress has on the body, right? We know the impact that it has on your sleep routines. We know the impact that it has on your relationships. We know the impact that it has on your digestion, right? Like stress is real and money, stress is real. It's the primary source of stress in most people's life. And so how can you be really fully present and giving in a session? If you are worried about your rent check clearing, right, or you are having to go to a second job to be able to make ends meet, it's going to be very tough. I'm not saying it's not possible, but what I've seen is that you can become a better occupational therapist by having less financial stress in in your life, because it's going to allow you to show up more fully as the OT that you want to be in your sessions, because you're not going to have this through line of financial stress, coloring everything and all of the interactions that you're having.
Jayson Davies
Yeah, and I think that that is true whether or not you want to start your own private practice or you're a school based occupational therapy practitioner and simply want to best support the students that you serve. I mean the financial stress, even if you're not under financial stress because of your living paycheck to paycheck, even just the financial stress of opening a credit card or having to move from one rental to a new rental because prices are increasing a little bit like, yeah, it kind of comes back to the money, right? Like, if, if we had the money in the right situation, maybe we wouldn't have to move homes, which then causes the stress of moving, which then causes the stress of getting new internet and utility bills set up and all that other stuff that goes along with it. So totally agree with that. I think that it is something that's essential, and I think you've framed it in the great way by saying it's an ADL, and it's an ADL that we often don't think about as an ADL. In fact, I don't think it's an official ADL. Is it? Is it an ADL?
Doug Vestal
I don't think it, I don't think it is, yeah, but it's, I know everyone knows that managing money and budgeting and everything is an ADL, but what I'm hoping to accomplish is, okay, well, we need to go deeper than that and go like, what do we actually do now? Right? It's not enough to say it. I think a lot of people will know it, but they don't have, necessarily, the tools and the techniques in their own life, and if they're not applying it in their own life, then how can you help your clients with it?
Jayson Davies
Yeah, yeah. And I did look it up. It is under according to OT it is an iadl, which I thought so, but I agree with you. I think it's more of an actual ADL, not just an instrumental activity of daily living, but a full on, like in your face, activity of daily living, it really does make a big difference in everything you do. We all have to deal with money every single day of our lives. It really is an essential. ADL, so kudos to you for bringing that up. I really appreciate it. All right, given the fact that I had to look up the money management was an iadl, obviously this is not something that is well taught in occupational therapy school. I think it's no surprise that money business, it's starting to be taught more in educational programs, but it definitely is not at the forefront of it. So from your perspective, if you were consulting with the NYU Boston universities and USC is, what would you want them to implement into ot education? About money for OTs.
Doug Vestal
Yeah, it's a great question. I would break it down to two different aspects. So one would be like basic financial literacy, and the other would be career path planning. So I think within the financial literacy, spending a lot of time talking about the budgeting, the investing, the student loan management that we've been been talking about so that new grads coming out can start attacking their student loan debt and their financial life with a plan, you know, like we're not really giving new OTs a plan to. Help them in this arena of their life. And I'm pleased so far, like a couple of OT programs have reached out, and they're actually going to require this book to be required reading in their leadership management class, which I think is, is great, you know. And I hope other universities will do the same as as well, because this is something that every single ot OTA needs to become very fluent in, and then the other is career path planning. So I would love to see there are more discussions around private pay entrepreneurship, salary negotiation, as well as how the insurance business model works, because I think a lot of OTs come out of school. They don't understand reimbursement and how it works, you know. And so then that ham that hinders their ability to negotiate salary raises, because there's been so focused on the delivery of the care, but not necessarily the financial implications of the delivery of the care. And then they get into a situations where they're working for a business, and the business is making financial decisions that maybe they don't exactly understand or appreciate or even agree with, right? And so just setting it up for like, actually, this is how the business of healthcare works in America, and you can have a very different life if you work in a school versus sniff versus home, health versus a private pay practice and understanding those different environments at a more granular level, I think would allow more OTs to go into that with a little bit more choice and agency.
Jayson Davies
Yeah, yeah. I couldn't agree more with that. I still, to this day, am baffled by Medicare, Medicaid, all the insurance pain. I think it would also be really important for us to understand, because not knowing all that, in a profession that is very heavy on advocacy limits our ability to advocate for ourselves, both in our job, but also outside within the profession. And you know, talking to senators like it's hard to talk to senators about asking them why they're cutting Medicaid, when we don't know where the money is going and all that fun stuff. So, yeah, I think that's really important, and something I wish I knew more about, because to this day, I still get confused all the time about it, and I definitely could not lead a webinar on Medicaid, medi, Cal, all the fun stuff. So great. Well, Doug, I want to say thank you, but before I let you go, your question about your book financial freedoms for OTs, what is the most surprising or impactful lesson that you hope readers will take away from reading your book?
Doug Vestal
Yeah, it's a good question. So I, in advance of publishing the book, I got about 25 different advanced readers who were all professors at different ot programs, or OT a programs, and most of their quotes are in the in the beginning of of the book, and the feedback that I got from them is exactly what I wanted to be, which is, wow. I didn't realize that I had been avoiding this topic for so long and just how important it was. So one of the persons who is the head of an OT program, she sent me a personal email, and she was like, you'll be glad to know that we just paid off our 11% credit card. And in the last two weeks of reading this book, I shared all of the strategies with my husband, and I came to realize that, like I was the person you were talking about in the book, who's been avoiding this, and avoiding coming up with a plan, because I thought it was too insurmountable. But now I'm using the tools and techniques, and I feel a lot more confident about the future, and so that really encapsulates what I want OTs and OTs to get out of this book, which is the feel empowered, to feel that this is an important topic, but equally, have the right tips and techniques that they can start to implement immediately in their life to find financial freedom over time.
Jayson Davies
That's perfect. That's perfect. Yeah, we got to stop avoiding stuff, and money is definitely something we cannot avoid, because we got to pay our bills. We got to get gas in the cars. We got to pay for those tolls and and before I let you go Doug, for everyone who has really appreciated everything that you shared today, and want to have everything kind of put for them in the book, and they really want to learn more about this. Where can they go to grab the book and learn more about you?
Doug Vestal
Yeah, so they can buy the book on Amazon. Just search for financial freedom, for OTs, a guide for a building and wealth without burnout. It's available there in paperwork version as well as Kindle version, depending on what your preference is. And then my website is freedom of practice.com where I have a lot of free resources on starting a private pay practice. And then I post regularly on Instagram at vestibular Doug, and then on YouTube, at. Doug vestiblo.
Jayson Davies
Awesome. Got the YouTube channel excited for that. Oh, right. One more time, Doug, thank you so much for being here. We really appreciate you sharing everything from budgeting to wiping down those student loans and then investing for the future. I think that everyone who reads your book is going to have kind of that, that moment where they realize, yeah, you know what, I can't I can't keep avoiding money, and that is a great way to see this out, like it's not about making you a millionaire. It's not about making you a billionaire, although a lot of teachers are millionaires, as you pointed out to me once upon a time. But yeah, it's about being in control of your own personal financial situation. And we really appreciate having you here.
Doug Vestal
Yeah. Thank you so much, Jayson, and thanks for helping me spread the word.
Jayson Davies
All right. And that is going to wrap up this episode of the OT school house podcast. But before you go, as I mentioned at the top of the episode, I have a special surprise for you, and that is that I have purchased 10 copies of Doug's financial freedom for OTs book, and I want to send it your way along with a little ot school house swag. Why? Well, because I want to help you reach financial freedom. More importantly, I don't want you to have to take your next job that you potentially loathe due to a financial hardship reason. I want you to be able to have the freedom to say no to a bad job and good to a great job, even if it pays a little less. So if you want to take me up on this offer, shoot me an email at podcast@otschoolhouse.com and let me know one takeaway from this episode that struck a chord with you. That's it pretty simple, right? I will then send a copy of financial freedom for OTs to the first 10 ot practitioners who do, and if you're not one of the first 10, don't worry, I will still reply to your email and give you some quick encouragement. So I hope you will take me up on this. I know many of you won't, but the ones who do will be in for a great read again. The email is podcast@otschoolhouse.com and before we sign off, I want to give one last big thank you to Doug for coming on the show. You can learn more about his book on Amazon and learn about him and how he supports ot practitioners over at Freedom of practice.com thanks again for tuning in, and I'll catch you next time.
Amazing Narrator
Thank you for listening to the OT schoolhouse podcast for more ways to help you and your students succeed right now, head on over to otschoolhouse.com Until next time class is dismissed.
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