The Struggle of Student Loan Debt and Building Wealth
As a physical therapist, especially in the cash-based model, your financial journey may feel like a balancing act. On one side, you’re dealing with the weight of significant student loan debt (often $150k or more), and on the other, you want to build wealth, invest, and secure your financial future. The problem? Most PTs have never been taught how to manage money effectively or how to leverage their financial situation for long-term success.
In this blog, we’ll dive into how you can start building wealth—even with overwhelming student loan debt—without sacrificing your financial peace of mind. Let’s break down actionable strategies for paying off debt while investing in yourself and your future.
1. Why Traditional Financial Advice Doesn't Work for Cash PTs
Most traditional financial advice centers around the idea that paying off debt immediately is the best way to secure your future. However, for cash PTs who are entrepreneurs at heart, the typical advice can fall short.
Why?
Cash PTs often operate differently than traditional employees. You’re not just earning a paycheck—you’re running a business. Traditional advice doesn’t take into account the power of leveraging your income and investing in your practice, which can create far more wealth than simply paying off student loans at the fastest rate possible.
2. The Biggest Financial Mistake I Made: Paying Off Loans Too Quickly
Ben’s Journey:
Ben shares his personal experience with student loan debt, highlighting how he paid off his $150k debt within two years of graduating. While this might sound impressive, the financial decision wasn’t ideal. The mistake? Paying off low-interest loans too quickly instead of investing that money into assets that would yield a higher return.
Why It Was a Mistake:
At a 4% interest rate on student loans, Ben could have invested that money into stocks or real estate, potentially earning higher returns (8% or more). Instead of allowing his money to work for him, he focused too much on getting rid of his debt. While the emotional relief of being debt-free is invaluable, Ben now realizes that he could have better utilized that cash to build wealth and pay off loans over time.
3. The Importance of Investing in Yourself
The most crucial investment you can make is in yourself. Ben and his team invested in business coaching, personal development, sales training, marketing education, and leadership skills to create a profitable practice. Here’s why:
Skill Acquisition: By acquiring new skills, especially in sales, marketing, and business management, you set yourself up for success in your practice. These skills create cash flow, which allows you to pay off debt and invest in other assets.
Building a Practice: When you invest in your business, it becomes the vehicle that generates income. This steady cash flow is what allows you to then invest in real estate, stocks, or other opportunities to build wealth.
4. Managing Debt and Investments: The Balance
When you start earning income, it’s tempting to spend money immediately, upgrading your lifestyle. However, to truly build wealth, it’s important to delay lifestyle upgrades and focus on investing the extra income into assets that grow over time.
Paying Off Debt vs. Investing: Ben and his team recommend not immediately paying off your student loans with every extra penny. Instead, consider putting that money into a high-yield savings account, stocks, or real estate where it can grow. When your investments start generating returns, you can then pay off your loans faster.
5. Understanding Your Financial Baseline
Before you can start building wealth, you need to understand your financial baseline. This baseline is the level of income you’ve been conditioned to expect based on your upbringing and environment. If you don’t increase this baseline, you’ll find yourself spending every extra dollar you make, without amassing real wealth.
How to Raise Your Financial Baseline:
Don’t Upgrade Your Lifestyle: When you start earning more money, don’t immediately upgrade your lifestyle. Instead, increase your baseline by living frugally and investing in your future.
Invest in Yourself: Education, coaching, and other self-improvement investments are essential. They pay the highest dividends and help increase your earning potential over time.
6. The Mindset Shift: From Broke to Bankroll
A key factor in wealth building is overcoming the mental block around money. Many people are conditioned to associate wealth with negativity or unethical behavior. However, to succeed financially, you need to rewire your mindset.
Here’s how:
Celebrate Others’ Success: Instead of demonizing those who are wealthy, celebrate their success. This shift will allow you to feel more comfortable with your own wealth-building journey.
Understand the Value of Money: Recognize that money itself isn’t bad. It’s simply a tool that allows you to create the life you want and help others.
7. The Real Secret to Wealth Building: Start Small, Invest Early
If you’re serious about building wealth, the secret is simple: invest early and consistently. Start small with investments, but prioritize them from day one. Whether it’s a Roth IRA, a high-yield savings account, or real estate, your goal should be to set aside a portion of every paycheck for future growth.
Avoid Lifestyle Inflation: As you earn more, avoid the temptation to increase your spending. Instead, invest in assets that will generate income for you in the future. Your goal should be to have your assets pay for your lifestyle, not the other way around.
8. Paying Off Student Loans vs. Investing: What’s Best for You?
If you’re juggling student loans with your desire to invest, the decision comes down to interest rates. If your student loan interest is higher than what you could earn through investments, then it might make sense to focus on paying off your loans. However, if your interest rate is low, you can invest your money in stocks or real estate and potentially earn a higher return.
Ultimately, your personal comfort level with debt will influence your decision. Some people prefer the peace of mind that comes with being debt-free, while others prefer to let their investments work for them.
9. How to Set Yourself Up for Financial Freedom
If you want to break free from the cycle of debt, the best approach is to focus on building a self-sustaining business. Whether it’s a cash PT practice or a side hustle, investing time and energy into creating assets that generate income will put you on the path to financial freedom.
Key Steps:
Invest in your education—this could be through coaching, courses, or mentorship.
Start small with investments, but commit to them consistently.
Focus on your business—this will be your primary vehicle for generating wealth.
Live frugally—avoid lifestyle inflation and make smart financial choices.
Conclusion: Taking Control of Your Financial Future
Building wealth as a cash PT isn’t about working harder or earning more—it’s about working smarter. By investing in yourself, understanding how to manage your money, and leveraging your income, you can start building wealth even if you have significant student loan debt.
Start small, be strategic, and most importantly, believe in your potential. With the right mindset and strategies, you can break free from the cycle of debt and start creating the life of financial freedom you deserve.
If you found value in this post, share it with fellow PTs who are struggling with student loan debt and wealth building. If you have any questions or need advice on your financial journey, feel free to reach out. Let’s build wealth together!
Watch and Listen to the Full Video
For a deeper dive into a cash physical therapists’ journeys, make sure to listen to the full video: Build Wealth As A Physical Therapist Even With $150K In Student Loans
About Author:
Although the company eventually failed, it provided Jordan with invaluable learning experiences. He became passionate about designing world-class patient experiences and building efficient marketing & sales funnels for cash physical therapists. Utilizing this expertise, Jordan became the CMO of a well-known physical therapy media company, and consulted for and built marketing funnels for some of the top physical therapy business coaches.
Eventually growing tired of the typical agency and consulting grind, Jordan, alongside Max Zirbel, founded Clinical Marketer. They infused it with the hands-on support and mentorship that they benefited from in their initial venture. The company was a success from the start, aiding clinics in scaling to 6 and 7 figures in revenue. During its first launch, Jordan and his team met Dr. Ben Bagge, whom they later partnered with after helping him grow his business from $200K/year to over $1M/year in three years.
