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VIDEO - DUwHF #700 - Travis Hornsby
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AUDIO - DUwHF #700 - Travis Hornsby
Travis Hornsby is the founder of Student Loan Planner. He has personally advised hundreds of clients with over $60 million in student loans, of which $26 million is dentists. He’s saved his average dentist client over $100,000 by optimizing student loan repayment through in depth analysis of all their available options. Before starting Student Loan Planner, he was a bond trader for one of the world’s largest investment companies and brings that analytical ability to addressing the greatest financial obstacle facing young dentists today.
Howard Farran: It is just a huge honor for me today to be podcast interviewing Travis Hornsby. He is the founder of Student Loan Planner. He has personally advised hundreds of clients with over $60 million in student loans of which $26 million is dentist. He saved his average dentist client over a hundred grand by optimizing student loan repayment through in depth analysis of all their available options. Before starting Student Loan Planner he was a bond trader for one of the worlds largest investment companies and brings that analytical ability to addressing the greatest financial obstacle facing your dentist today. Of course, I love you the most because you're from St. Louis, right?
Travis Hornsby: Yeah, I am.
Howard Farran: You were the city that gave Phoenix your Cardinals football team. So we have the Arizona Cardinals football team because St. Louis didn't love them.
Travis Hornsby: Yeah, I know. I'm here because of love actually. My fiancee want to work here as a professor at Barnes Jewish Hospital. I know we just lost the Rams too, so we love exporting sports teams to other cities.
Howard Farran: Where did the Rams go? Los Angeles?
Travis Hornsby: I think so. Just a small town in southern California, I heard.
Howard Farran: So are they gonna get another football team?
Travis Hornsby: No, I don't think so. We don't have any money, we're broke.
Howard Farran: Okay, well I called you, you didn't call me because I'm a big fan. You got about 250 posts on Dental Town and this is a hot topic. I already know my homies and they're thinking, "What could you do for me? I have my student loans with a certain bank, a certain company. How can I change that." Just start from A. She's driving to work right now, she's 25 years old, and she has $350,000 in student loans. What do you usually do for people like that?
Travis Hornsby: Sure, most people when they come out of dental school, they're average interest rate is 6% to 7%, right? That's not reflective of the actual credit risk of the dentist. The actual credit risk of a dentist is typically a lot lower than that. What we're gonna do is we're gonna look at their debt and we're gonna ask, "What's the debt to income ratio? How much do you owe, relative to your income?" If that's a low debt to income ratio, if that's below 2 then we'll look at getting you refinanced to a lower interest rate. I've got the best bonuses for clients anywhere online to help people get cash bonuses and the lowest interest rates. I shop seven of the largest lenders that exist to try to make sure that you're getting the best rate out there. That's one way that I help folks.
The other way that I help folks is, if you're a brand new NYU dentist, you're probably coming out of school with over $500,000 in student loans. You're coming out with an associate income of maybe $120,000. So, even though you're a dentist, even though you got a nice high stable income a banks not gonna touch you to refinance your student loans. That person has to be able to earn probably more than $350,000 to be able to get a good deal refinancing their loans. Which means that I've gotta set them up for the government income driven repayment programs to make sure they're saving the optimal amount every month to pay a tax penalty to save every dollar they can paying it back. It's really two different strategies. Either you're refinancing cause you make a really high income and you're trying to pay down the loans as fast as possible with a good interest rate or you're going for student loan forgiveness and trying to maximize all the government benefits if you owe a lot of money. I help people do either one depending on which is appropriate.
Howard Farran: So, where did you used to work?
Travis Hornsby: I used to work at Vanguard, the big $4 trillion dollar asset manager now. I used to be on the team that managed the municipal bond funds. I traded about $10 million in municipal debt for all the different cities. Got to see Detroit's bankruptcy, Puerto Rico's, it's real crazy. So I thought I'd get into another bubbling crisis, student loans instead.
Howard Farran: There's a lot of guys that just think that you should just only invest in tax free muni. What is the average tax free muni paying these days? Like in Arizona, what would you guess.
Travis Hornsby: It depends on what year, maybe two and a half percent. Depending [inaudible 00:04:12] AA. It's been a couple years since I was actively trading, so something maybe two and a half percent depending on the credit quality.
Howard Farran: How safe do you think those tax free munis are for a guy like me, living in Arizona? If I bought them only from Arizona.
Travis Hornsby: They're fine. The default rate on municipal bonds for A and above is a fraction of what it is for corporates. You're taking interest rate risk, you could definitely loose principle with interest rates rising but I wouldn't worry about it too much.
Howard Farran: Okay, so I want you to go through your average client for these two scenarios. The first one was refinance and you say you've got to have a debt to income of 2:1. You said the NYU people are $500,000, what is the average dentist? For the whole country, how much for that year that's calling you?
Travis Hornsby: Sure. The average that calls me is about $360,000 in dental school loans. The average overall according to the ASDA is about $261,000 for the class of 2016. I think that number is actually too low and I'll give you a couple reasons why. There's a lot of folks out there, whether they're on the three year HPSP scholarship, so they only had to take out one year worth of loans. Maybe they're getting family financial support for part of dental school. Maybe their spouse is covering living expenses. I actually think the $260,000 figure that they are giving is a little bit on the low end. The average person that talks to me is about $360,000 to $400,000 in student loans. I've seen a range up to $1,000,000 actually for an individual.
Howard Farran: How the hell do you get a million dollars in debt?
Travis Hornsby: You go to an expensive private under grad and then you go to an expensive dental school like Tufts or NYU or Pacific and then you go get a three year specialty in orthodontics or you become a pediatric dentist or something like that.
Howard Farran: So you can't go bankrupt with student loans, right?
Travis Hornsby: You can't.
Howard Farran: So a million dollars in debt. Why don't you advise them to move to a more intelligent country like Australia, New Zealand, Norway, Finland, all these countries where you should be living anyway. They couldn't get you if you had a million dollars of debt and moved to Copenhagen, could they?
Travis Hornsby: No. So I actually have a client-
Howard Farran: Is there an extradition treaty for student loan indebtedness?
Travis Hornsby: That's the next frontier, Howard. I actually have had a couple clients that have actually gone to the Middle East to get more money that way and I've had people that have been in Europe taking care of Diplomats and all kinds of folks that are trying to flee the country to maybe to be able to get more money to avoid this problem. It's something that, if you graduated dental school 20 years ago, it's just an order of magnitude difference in the cost. I think that truly, folks that are 20 years or more out, or even 10 years or more out, they just don't feel the crazy explosion of debt that's happened. In 2006, they started doing grad plus loans and you can borrow as much as you want, there's no cap. A lot of these schools realize that and they said, "Well, we have these loans that we can sign people up for and there's no cap to borrowing. So, we can raise our tuition to whatever we want." A lot of the schools did that and you've seen student debt explode. Overall in the country it's gone from $300 billion about 12 years ago to $1.5 trillion today.
Howard Farran: I just retweeted you. What do you want me to retweet. You've got check out the cool new podcast from ditching 9-5 on how to free yourself from the workforce, or your advisor must be a fiduciary otherwise don't work with them or saving zero dollars at ... Which one do you want me to retweet to 20,000 dentists?
Travis Hornsby: Those are all tweets for friends actually Howard. I'll send you over one later if you want.
Howard Farran: Okay, well you can follow Travis at @studentloantrav on [inaudible 00:08:25] but if my homies, when they get to work. If they go to studentloanplanner.com that's your website. What are they gonna find on studentloanplanner.com?
Travis Hornsby: Sure. I actually built a free student loan calculator that anybody can download and use for free. They can just click on the website on that tab, the free student loan calculator tab, and they just put in their email and it gets sent to their email where they can download it and actually analyze what the best path is for their loan repayment.
Howard Farran: Is that at the ... Oh, so I hit those three bars then?
Travis Hornsby: Yeah.
Howard Farran: Okay, so hit those three bars. What is those three bar things called? It comes out of nowhere and now it's on all the mobile sites. I guess it just means the menu.
Travis Hornsby: [crosstalk 00:09:05] I guess so. It's a responsive mobile menu.
Howard Farran: So you hit that three ... I didn't find it the first three times I scrolled ... so that three bar thing. You hit that and then you hit student loan calculator.
Travis Hornsby: Yeah, and then you can click that and you can download that, or frankly just send me an email at email@example.com and the consult service that I do, I guess the dentists are used to paying $10,000, $20,000, $30,000 for a consultant so they're kind of surprised at how cheap I am right now but I charge $199 for an individual or $299 for a couple to analyze someones student loan situation. Like I said, I usually have found about $100,000 in savings over 20-25 years.
Howard Farran: God, that's cool. That is so cool. I love what you're doing for my homies. That is just amazing. By the way email me firstname.lastname@example.org any of those YouTube videos or anything you want me to tack onto the end of this podcast.
Travis Hornsby: Sure.
Howard Farran: Cause I like some of the YouTube videos on your Student Loan Planner. So, to refinance you need $2 in debt to $1 income. So, next question. The dentists calling you and like I say, you're one of the most popular guys on Dental Town. How many years out of school are they when they usually call you and what is their average income when they're calling you? See, the person listening to you is all by herself driving to work, so she's thinking, she doesn't know does she make low, medium, high. How many years out and how much money are they usually making when they call you?
Travis Hornsby: I'd say on average, probably about 3 years out making about $150,000 thinking about practice ownership very soon or they've already transitioned into a new practice and they're ramping up. I've had a pretty wide bell curve around that too. The best time to deal with this is coming right out of dental school. A lot of people mess up using the wrong strategy coming right out of dental school. I'll give you an example. Somebody who uses income base repayment. That's one of the ways you can pay your loans, right? You can pay 15% of your income. If you're using that plan, you're giving up the interest subsidy that you would get on a revised pay as you earn. So there's this government program that came about in the end of 2015 and it pays half of the interest that you're not covering with your student loan payments every month. A lot of folks, their 2016 tax return that are graduating this year would show zero cause they're graduating. You could sign up for this revised pay as you earn and cut your interest rate from 7% to 3.5%. While the average person that contacts me is ... that's for a year, while they don't know that you're a rich dentist. Then you'd want to refinance after that.
So, there's all kinds of strategies that you can do right away graduating dental school to save a lot of money but most people contact me because they've been on these plans, they've maybe used some forbearance. They've deferred them as long as they could, they don't really know what to do and the loan balance is growing, they haven't been able to make any headway, right? I've also had some pretty cool scenarios where an orthodontist contacted me with making $500,000 a year with $400,000 in debt and took his interest rate from 6.8% to a 2.5%. There's also those kinds of folks. Typical is probably 3 years to $150,000.
Howard Farran: You're saying they come out of school and they're usually paying 6%-7% interest and that's not really reflective of their credit risk. What are you trying to get it down to? What do you usually get that 6%-7% down to?
Travis Hornsby: If you've got less than $300,000-$400,000 with maybe $200,000-$250,000 income or more, then it depends on if you want to go variable or fixed rate. For a mortgage you can do a fixed rate or you can do something that adjusts and the variable rate's lower. So, maybe for a five year variable rate, right now it's probably around 2.6%-2.7% cause rates have risen a little bit. For a 10 year fixed rate, the very best on that's out there is probably around 4.7%, 4.8%, something along those lines. For the very best credit risks, that's what you could probably get.
For somebody that is just coming out of school though, like I said, there's all kinds of stuff you can do to take full advantage of these government income driven repayment programs. It's pretty complicated to be quite honest. I had to model it and use the excel skills that used while trading these lots of bonds for Vanguard to understand it and actually get how to gain the system, so to speak. Like saving for retirement, for example, lowers your income then increases your interest subsidies. I don't hear any financial advisors discussing that as a strategy but it's a way that you can save thousands of dollars a year.
Howard Farran: You should write an article for this for Dental Town Magazine, it's mailed to 125,000 dentists and then it's read online and emailed all round, the reach is amazing.
Travis Hornsby: I'd like to.
Howard Farran: Have you ever thought about that?
Travis Hornsby: Yeah, I'd love to. Just have anybody ask me, I'm happy to send it over.
Howard Farran: Email me email@example.com and then CC the editor, which is Tom Giacobbi so, I'm firstname.lastname@example.org and he's email@example.com but I cannot believe that these kids wait three years before they start looking at this mountain. Do you think it's just the typical human where you just stress, you don't want to think about it so you just don't think about it or do you think it's ignorance financially. Why do you think they wait three years to tackle the single biggest problem standing in front of them?
Travis Hornsby: I think it's part of it's deeply emotional and I think that people really worried. I've had some people tell me Howard, that they don't know if they can start families. These are dentists making [crosstalk 00:15:07].
Howard Farran: So you're saying it's a good thing that these student loans will make you go get a vasectomy? Gosh.
Travis Hornsby: No, for female-
Howard Farran: My gosh, I don't why I didn't think of that. Why did I make four kids? Cause I didn't have enough student loans?
Travis Hornsby: Yeah, problem solved. I think a lot of them are just terrified about dealing with this debt. You come out of school with $400,000-$500,000 and it just grows. If you're not paying the massive interest every year, it's just gonna grow and grow on you. You see that happening to you and it's kind of like a deer in the headlights. You come out of school hearing that, from your dental school dean for years, that you're gonna be a rich dentist, you're gonna pay it off in no time and then you come out of school as a new associate making $120,000. Your dental school debt is $400,000, well that's $4,500 a month to pay that down. After taxes, you have $80,000, so are you really gonna put away $4,500 a month or about $50,000 a year and live off $30,000, to pay down your dental school debt? It's by force of math, you can't do that.
Howard Farran: What's more sad is for the males, not the females, the females marry completely different than the males across all cultures, study all time, women always marry across their social status or up. So, if you're a woman dentist, 3 in 10 marry a male dentist and the other 7 always marry a dentist equivalent, there are lawyers, bankers, they all have a good job. Whereas men, always seem to attract some gold digger waitress from the Waffle House who's like, "Oh my God, a dentist. I'm gonna marry him and I'll be driving a beamer." So then you have that massive issue where you have $500,000 in student loans and you're gonna be married to a woman and you know this on the first date because when they bring the check, she doesn't even pretend to reach for the check. When you're on a date and they don't even pretend or try to pay for half the date, that's when you just run out of the waffle house and never look back. It's a bigger problem for the males.
Travis Hornsby: But I'll tell you though, the interesting thing that I'm seeing is, like you said, the women tend to marry somebody that's a similar socioeconomic level to them so you see a lot of specialists and dentists marrying specialists and dentists, right? What I'm seeing is, I'm seeing a lot of couples that have $1.5 million to $1.6 million in dental school debt between the two of them. He'll have $800,000-$900,000, she'll have $600,000, $700,000, $800,000.
Howard Farran: They pay you $199 for an individual, how much for analyze a couple?
Travis Hornsby: $299.
Howard Farran: $299 and then you deposit the $299 then you send them an email with a flight ticket to Qantas on a one way ticket to Sydney. You tell them, "Never look back, homie."
Travis Hornsby: I tell you, there's different things you can do to optimize your debt. One of those things you can do is come straight at ... one year you go do some sort of associate position to get your clinical skill faster and you get everything you need to do from that end and look at how they do business, look at how they do marketing, all that. Then move to Oklahoma. Move to Nevada, move to Texas. Go buy some old dentists $600,000 practice that includes the building and the land and he probably doesn't even have a website, probably doesn't even know what Facebook is. You go in there and you build the website, you hire a consultant, you make sure the voicemails don't get abandoned on the weekends and you double the production and you pay down your student debt. You refinance and you pay it off in a couple years. I've seen that, I've had clients like that.
Howard Farran: You said Nevada, Texas and where else?
Travis Hornsby: Oklahoma is probably the best ones. The Iowa's good too.
Howard Farran: Best ones for what?
Travis Hornsby: Repaying student loan debt and making, frankly, a lot of money.
Howard Farran: You're just seeing your clients are making more money if they're practicing in Nevada, Texas, Oklahoma, and Iowa.
Travis Hornsby: Yes. There's a big difference ... So somebody that's working in New York City or San Francisco or LA or something like that, goodness sakes. You shouldn't have been a dentist. I see some of these folks-
Howard Farran: I know.
Travis Hornsby: Those are the folks that the million dollars in debt or $500,000 in debt, they're working in a super saturated area to buy a practice you have to pay 100% of production. It's just not a winning proposition.
Howard Farran: You know, if you go on Dental Town, one of the sections we have on Dental Town is townie perks. I've had the deal for a real score up there for demographics forever. I've podcast interviewed Scott McDonald out of Utah Dental Demographics and these guys walk out of school $500,000 in student loans and they won't pay $500 or $1,000 to get demographics to go where they're needed. They don't think it matters. As if you could just go to Somalia and kick ass. If demographics don't matter then go to Baghdad and then call me. Demographics are everything. I want to ask you this. I think the problem is two fold. You realize how lucky you are to be born in only maybe 20 countries where you have access to other peoples money. You realize it's not smart to work at McDonald's for $10 an hour and save up for dental school for 10 years and pay in cash.
So you borrow other peoples money so you can go be a doctor so you can pay that back making $100 and hour instead of saving up for it at 10. Isn't it true that if you get down a quarter million, half million dollars down that road, the only way you're gonna pay it off is to go farther down that road and buy a practice. You can't go halfway down the road of other peoples money and then go work at Aspen, and Heartland, and Pacific for 10 years. If you're $350,000 in student loans, you need to borrow now $650,000 more and buy a practice where you're needed. You're saying Texas, Nevada, Oklahoma, Iowa, I'm saying call Dental Demographics [inaudible 00:21:10]. Then buy a practice, double it and get rich. You can't borrow other peoples money and then go be an employee. Is that what you're saying?
Travis Hornsby: Yes. One of the threads I started on Dental Town was just doing a break even analysis of the decision to being a dentist versus just your fraternity brother that went to work for corporate America with no debt making $50,000 that had a C average and drank too much beer. I ran the numbers. If you're an associate and you have about $300,000-$400,000 of dental school debt, if you just look at the break evens on that, it's not good. It's really not good. You're working into the 2070's the 2080's before you catch up with your friend that had no debt and just went straight into corporate America. If you are an owner, if you buy your practice, then the break even period is reasonable. You can break even in 15-20 years, maybe a lot sooner even, if you go to one of these really high income places. If you're an associate with more than a couple hundred thousand in dental school debt, you have to be an owner. If you don't become an owner, if you don't ditch the DSO's and the franchise models and all that, you should have gone and been something else, I think, unfortunately.
Also, the default rate on dental practice loans, I get this a lot, people are scared. They think it's not gonna work out. I've listened to your podcast. It's .1%, I've talked to lenders. It's super low. That means that unless you go get addicted to pain killers or you lose your dental license because you can't stop drinking and driving or something. You're gonna pay the loan back, which mean in 10 years you're gonna have an asset worth something, $700,000 to $1,000,000 probably. You're gonna make double the money that you would otherwise. Yeah, it doesn't matter how high of the dental school debt that you have, there's always ways we can save money optimizing it but you have to be an owner or else it just doesn't work out. The math doesn't work out.
Howard Farran: Do you recommend Vicodin like Prince or more propofol like Michael Jackson?
Travis Hornsby: Well, with some of the debt balances that I'm seeing, I just am just trying to keep clients away from both of them. It's rough.
Howard Farran: Speaking of musicians, one way to remember your name is you're named after Bruce Hornsby and the Rangers. Travis Hornsby is Bruce Hornsby and the Rangers, is that your dad?
Travis Hornsby: No, unfortunately I didn't get that lucky. He's a great guy though.
Howard Farran: Man, that is one of the greatest musicians. So you're posting on Dental Town and under ... we have 50 categories after cosmetic dentistry is dental students and residents and then you're posting on the forum, financing school and loan repayment. That article that you just talked about, about your roommate who was a communications major and got a job for $50,000 a year, that'd be the classic article. Then explain what you do for these people.
Travis Hornsby: Yeah. I think so. Yeah. The issue is if you're borrowing so much money, you have to figure out how to treat that as a business decision. You can't let it just build and build and not have a plan to tackle it. That's the way you can increase the rerun on investment for your education. You have to play good offense in dentistry. Which means you gotta go open your own practice, hire consultants, make sure that you're producing, seeing clients, have a good procedure base, all that but a lot of people aren't playing good defense. That means making sure that you know what you're doing with your student loans play good offense and defense, that's how you become financially successful and be financially independent.
Howard Farran: What are your posts, you're talking about, how to use income driven payment programs for maximum advantage? What do you mean by that?
Travis Hornsby: Sure. There's three major income driven repayment programs. You have IBR, Income Based Repayment. That's 25 years until forgiveness and you have to pay 15% of your income. That's the oldest plan. There's two newer plans that everybody needs to know about if you have dental school debt. The second one is pay as you earn. That's 10% of your income for 20 years, then forgiveness. Then revised pay as you earn is 10% of your income and 25 years until forgiveness.
Basically in an IBR, most likely is making a bad decision. If you're on the income based repayment plan, I'm almost positive I'm gonna save you a lot of money. Pay as you earn and revised pay as you earn, that's usually where you have to make the decision about what you want to do. It's important for dentists to realize that this remaining balance, after 20-25 years, it's taxable income. It's not wiped off the books, you don't have to deal with it. You'll have a lot of cases, you'll have dentists with $500,000 to $1,000,000 loan balances get forgiven and then you've got to write a check to the IRS as if you go that as a bonus. In other words, how do you come up with $200,000 to $400,000 in taxes in 20 to 25 years. That's part of what my service does, is I analyze what your balance looks like, analyze what I think your tax payment is gonna be and then I can calculate back every month what you need to save to have enough to pay that tax penalty.
Howard, I think you'd be down to use other peoples money and pay 40% of something rather than 100% of something. Right? If you owe a ton of money where refinancing is not really an option cause they're not gonna touch you and you're never going to be getting your debt to income ratio below two because it's just so much. If that's you, then what you need to do is actually, it's counterintuitive, but you want to try to push as much debt into the future as possible. If you do that, then you'll pay 40% in taxes on this big balance instead of 100% and on top of that, if you make sure you're doing income driven programs correctly, you're paying simple interest instead of compound interest. So, that's one of the subsidies that I'm talking about too. You use one of these programs you can make sure that your loan balance is growing at 7% simple interest instead of compound interest. Then you can have inflation eat away at that balance and then the total cost of the loan repayment is far, far lower than if you had just not thought it otherwise. If that makes any sense.
Howard Farran: You know how you said earlier that it takes them three years out of school to think about this because it's so emotional?
Travis Hornsby: Yeah.
Howard Farran: I can't even get on the scale and weigh myself unless I'm eating an entire cherry pie and I have to eat the cherry pie before I even look down. This is what she's thinking. She's thinking, "Okay, I'm living in Salina, Kansas and I'm working for corporate and I'm making $150,000 and I see this practice that's for sale for like $650,000 but, dude, I'm already $250,000 in debt or $300,000. Does that mean I can't get a loan for $650,000 to buy this practice? Or even better, is there a way I can roll all that debt into one deal and refinance the whole damn deal?" What would you say to someone with $350,000 in student loans, who's got her eye on a $700,000 for $1,000,000. What would you tell her?
Travis Hornsby: I would say that first off, you unfortunately can't roll it all into one. The only exception to that rule is maybe you have a lot of home equity. You might be able to take out your student loans and make them tax deductible by taking out a home equity loan. Talking to dental CPA's you can't take practice debt and use it to refinance your student loans, making it tax deductible debt instead of not tax deductible debt cause that's why student debt really sucks because it's after tax interest. You can't deduct it so it's a lot more expensive. The dental CPA's think you can't do that because you can't use business debt for personal purposes. So, that's why they say you can't make your interest not deductible in that case.
What I would tell her, she's got $250,000-$300,000 in dental school loans, she's an associate making $150,000, I'd tell her first that you're buying an asset. Student loans finance your brain, finances your education. You can't go necessary sell your brain right now for certain lump sums but an asset, a dental practice, that's cash flowing. Yes you're spending $650,000 or $700,000 to buy a practice but it's worth that too. It's worth $650,000-$700,000. It's basically a neutral decision. Worst case scenario you have to sell that practice after a year and you take a bath on a certain percentage of the balance but the risk is not nearly as much. You're backing an asset with debt. It's not the same thing. Furthermore, the DSO and the corporate place that you're working at, they're paying you maybe 30% of production if you're lucky. Practice overhead, I've seen a lot of folks that get it down to the 50's percentile wise. You can make double potentially what you're making for really not that much more work. Would you rather pay $100,000 of income you never see to a corporate group that's gonna cover all your marketing and all your stuff for you or would you rather go find one of the great consultants on Dental Town and pay them $30,000 to tell you what to do.
Howard Farran: They'll never do that, they won't pay 3%-5% of collection on advertising to go get half of America their dental insurance but they don't blink at signing up for a PPO that's 40% less. They'll go set up in downtown San Fran, LA or north Scottsdale cause they don't want to pay $1,000 for demographics that would say, never, ever, ever go there. I want to talk about a couple other things. What if you're listening to this and you're a senior in dental school and maybe she's thinking, "Maybe I should just join the Army, Navy, Air Force, Marines." Is the military a good place to go if you're $350,000 in debt?
Travis Hornsby: I would say probably the best way to do it is on the front end. You want to try to sign up for one of their health professions scholarship programs where you're maybe, at worst case, having to deal with $90,000 in student debt. The folks that I see that do that, Howard, they have a real low stress lifestyle. They have less than one times their income in student debt so they refinance it to get a super low interest rate in most case because they're probably not gonna stay the full 10 years in the military to get public service loan forgiveness. They travel around the world. I had one dentist tell me that they were in Germany and then they got stationed in Hawaii and then they got to go over to Asia somewhere and meanwhile he's getting all these pay bumps and retention bonuses and he can stay in another 10 years and get a pension. Absolutely, military is fantastic.
What I thinks gonna happen with these rising dental school debts is I think the military is going to be the Harvard and MIT of dentistry. I think they're gonna become the most competitive, most difficult positions to get into anywhere just because I think that the benefit is tremendous. Honestly that's for somebody that doesn't get excited about the prospect of working their tail off, of living in a rural place, of getting an amazing amount of production and making a large profit on their practice and potentially even opening a second one. If you're an entrepreneur, the best thing you can do is to follow that financially speaking. The military's absolutely a good route, I've had several people that I've helped that have done it.
Howard Farran: What about these rural places like everybody talks about the fact that Iowa, one of these ... half of America lives in 145 metros where two thirds of the dentists go and the other have lives in 19,000 towns where only one third of the dentists go and places like Iowa have a list of towns. If you go there the State of Iowa will give you $100,000, Delta Dental will match it, usually you go down to these small towns and they have boarded up buildings that they'll just give you. Are you seeing much of that? Is it more than just Iowa, is it only Iowa, do you have to like corn and [crosstalk 00:33:27]?
Travis Hornsby: I actually had a conversation with a director in that program, the Iowa State Department of Health and apparently that program it's getting scaled back to $50,000 instead of $100,000. So some of the programs I've seen have these incentives tied to ACA money and so some of that money is drying up and so some of the state legislatures are tailing some of this.
Howard Farran: What's ACA money?
Travis Hornsby: Just various incentives and grants that the Affordable Care Act gave to these-
Howard Farran: Oh, Affordable Care Act.
Travis Hornsby: Affordable Care Act. Yeah.
Howard Farran: So, that was Affordable Care Act money when I did that?
Travis Hornsby: Yeah, some of it, maybe not all of it. They got some various grants and some stuff just, at least, from what she told me, from what this individual told me. She said that's one of the reasons why the legislature was cutting a little bit back and apparently she also said that you can't stack those benefits. You have to do either the Iowa State program or the Delta Dental one. The thing is there are, I think it's called PrimeCare for anybody that wants to look it up, but there's definitely a lot of benefits. The State of Oklahoma will give you, I think $100,000, a lot of these other rural places ... Maine I think will give you a big bonus if you go to one of their-
Howard Farran: So what states? Iowa, Oklahoma ...
Travis Hornsby: Maine, there's a lot of them. You can look up, the ASDA I think has a guide that's really comprehensive to dental school loan repayment programs and it's not-
Howard Farran: Have you ever posted the link of that on Dental Town?
Travis Hornsby: I can put that up there, on the thread there so people can have that. It's pretty comprehensive. You can scroll through that and contact any of the various state resources that are out there. It's not gonna cover your whole debt but it's definitely going to make a difference. I'd say the biggest benefit of going rural, to going to one of these places where there's no dentists, it's not the loan forgiveness, it's the demographics, it's incredible.
Howard Farran: I know.
Travis Hornsby: I looked at come counties in Iowa the other day, on their state website, they have maybe a dozen counties with a population to dentist ratios over 9,000.
Howard Farran: I know, I know and what they don't realize is that if you went out there, you'd have no PPO's. So here's what it is. A bottled water, every business in America they say, every 7-Eleven, Circle K, [inaudible 00:35:53], we buy these for 80 cents and we sell them for a buck. They know they make 20 cents on each one. What the PPO does, they say, "Okay, sign up for us and we're gonna lower the fee 40%." So now you're buying it for 80 cents, selling it for 60 and you're not sophisticated enough to know it cause you don't know any accounting. You don't even know your cost because Dentrix and Eaglesoft are two completely insane to hook up with QuickBooks online because their best idea is that you should know your cost and then you're selling it for 15 different prices. You don't know the cost of this bottled water, you're selling it for 15 different prices and I tell these guys a thousand times, get a dental consultant. They're like, "No. Dental consultant, did you say laser? Did you say cad cam? Did you learn sleep apnea." It's like, oh my God.
This is why I do my show every day for an hour trying to beat into their head that, back when I got out 30 years ago, you could make a lot of bad decisions and still do well but today when you get out of school you gotta make some really, really good decisions to do well. If you get out of school $350,000 in student loans and then compound that with a couple two or three really bad decision, like demographics, not knowing your costs, not knowing your accountant, I tell them that every millionaire I know, by the time they got to five employees one of them was a full time bookkeeper just so they would know their cost. The only thing the dentist just heard me say on that rant was that they should learn how to place implants.
Travis Hornsby: Yeah, well if student loans bothers you, don't work in New York City, don't work in San Francisco, don't work in South Beach, don't work in Los Angeles. Really have that hard conversation with your partner, "Let's move somewhere." I have one of my clients that I talked to, they convinced their partner to just, "Let's go to Oklahoma. We're gonna go to Oklahoma, it's gonna be a tour of duty. Instead of joining the military we're gonna go to Oklahoma, we're gonna go there for four years. We're gonna pay off our $500,000 dental school debt. We're gonna make a ton of money and then we're gonna be free and clear to go wherever we want. Buy whatever practice we want to buy."
Howard Farran: If your partner doesn't agree with you just treat them like United, just beat 'em until their attitude improves.
Travis Hornsby: Drag them out.
Howard Farran: Yeah, drag him to Oklahoma kicking and screaming. Here's the other thing, I know dentists that got out of school back when I did that went to Beverly Hills and all that stuff and were broke then I had other classmates that went to several hours in into like, Bakersfield and worked four 10 hour days and made so much money that they had a black Porsche and an airplane. Then Thursday after work they'd either fly into LAX or drive their $100,000 Porsche and then live like a rock star Friday, Saturday and Sunday. Then Sunday night go back to the armpit of the Earth, Bakersfield, California where it was probably designed by either Lucifer or Satan and just work for four days, four hard 10 hour days. Or just work a half day seven to seven, get that half day, 12 hours. Just work like no man has for three 12 hour days, four 10 hour days and then drive two hours into the city, the weekends and live in a downtown condo.
So, I want to ask you this. According to US News and World Report, the number one profession in America is a dentist. Do you agree or disagree with that?
Travis Hornsby: I disagree and I'm gonna get a lot of hate mail for this I'm sure but let me explain why. I actually wrote a piece on this on my blog, you click that same menu, you can click blog and you can actually click the dentist category on the bottom of website you can click dentist and all the dentist articles that I've written will pop up on my website. I wrote an article about this, it's my number one viewed dentist article about student loans on my website. I joke that the number one job in America for debt is being a dentist. The reason I said that, the reason I took issue with the article is there's a perception problem in America with dentistry, in my opinion. I think that that article did not even mention once the cost of an education to get that job. What we're seeing is the cost of education of dentistry is skyrocketing. Why is that? It's because it is a good profession. It's very stable, it's recession proof. You're making six figure incomes right out of the gate and that's just gonna grow. You have all this potential to open your own practice and do all these cool things. Different procedure mixes, help people, it's a good profession.
The problem is, is when you have a good asset, the price of that asset is being bid up to unbelievable proportions and the schools know that. They know there is this great demand. They're raising the price of this wonderful asset to where the price, if you actually had to stand on your own two feet and pay that money, it's almost to the point where a lot of schools are producing an economically unenviable product. If your NYU grad actually had to pay their debt, they would be living on rice and beans on $20,000-$30,000 a year. If you actually had and you didn't get income driven repayment programs. What I think is that dentistry can be one of the best jobs in America but if you don't pay attention to how to save money on your student debt then it's not. It can be a really burdensome job both mentally and emotionally as well as psychologically. It's just very difficult to have to deal with $300,000, $400,000 $500,000 of debt. I thought that the fact that US News doesn't even talk about it at all perfectly reflects the public mood about dentistry. If you asked anybody about how a dentist is doing financially, what are they gonna say? Pretty good, right? Then say, "Oh this person, you know, they were driving a nice car."
You expect your dentist to be a pretty high wealth person. You expect your dentist to have a pretty high net worth. Then for the older grads it's probably true. If you look at the younger grads, I think you have a lot of, especially first generation families that are sending their kids into dentistry thinking that the Affordable Care Act is messed up medicine, I'm gonna send my kid into dentistry, they're gonna make a ton of money. There's no connection with the cost of education. The public isn't aware of that. I think if the public ever becomes aware of that and some of these income driven repayment programs that are masking the problem get scaled back, I think you truly would see a crisis in the dental profession. So that's why I wouldn't say it's the number one profession in America.
Howard Farran: That article is amazing and I read that when you wrote that. How long ago did you write that?
Travis Hornsby: A couple months ago, I think.
Howard Farran: Yeah, from your website, you're so smart, you said share on your social media so I shared it while you were talking. I shared it on my Facebook, my Pinterest, my Twitter @HowardFarran, my Linkedin and my Google Plus. I hope everybody reads that because that is an amazing article. Did you post that on the message boards?
Travis Hornsby: I think I did, yeah. It got a lot of really happy and supportive, angry and hate filled opinions so that's always good, right?
Howard Farran: Well, it's always good because that's why, when I did my show I was gonna call it Dentistry Uncensored. I don't want to sit on here and sing Kumbaya and talk about everything [inaudible 00:43:10]. There's 7 1/2 billion sapiens trapped on the surface of a rock, they've never dug down more than five miles, they only fly about five miles above it. They're flying around the sun once a year and there's a lot of problems. Successful people are the ones willing to have the highest number of uncomfortable conversations. You gotta talk about your problems and you said it the most, I truly believe that one of the biggest problems of finance, it's emotional and people don't want to talk about bad things. They don't want to talk about their finances, their student loans so this is what was so bad, I want to switch the gears to politics just for a minute. The fact that during this last election, I'm 54, I've lived through so many elections. First time I voted was 1980. What year were you born?
Travis Hornsby: I was born in 1990, I'm dating myself here.
Howard Farran: I was voting 10 years before you were born and I always thought that the Super Bowl is the biggest sporting event every year but the truly biggest sporting event entertainment is the U.S. Presidential election. People waste so much time on it and nothing ever happens. They don't get anything done and they don't do anything and they're gonna let you down every single time but I looked at all the people who would come home and watch news for an hour or two or three hours a night. They don't know how many incoming calls come into their office, they don't know how many go to voicemail, how many are returned, they don't know any of their financial metrics but they're sitting there back seat driving the U.S. elections. It's just a joke but if you were Trump, what would you do? I hear that the student loan indebtedness is a trillion dollars, it's over a trillion, isn't it?
Travis Hornsby: It's $1.5 and I actually think it's closer to $2 trillion because the $1.5 trillion is all student debt and then I think there's a lot of housing debt based off of my client consultations. Where parents will take out a second mortgage or they'll refinance their student loans with the home equity they got or they'll take out credit cards to pay for living expenses. You factor that debt in, the shadow student debt too, I think it's $2 trillion. I really do think this is the next housing crisis. All of the bad risk is with the federal government.
Howard Farran: I had to sell my kidney to put Ryan through school. That's why he helps me on my podcast. He feels so guilt that dad had to sell his kidney. If you go back historically, I believe it was at the end of The Great Depression, the president signed one federal law and refinanced all the homes in America. It wasn't something you'd go back to ... Do you remember that? Did you ever study that?
Travis Hornsby: Yeah, I do think that ... Let's talk just for the country. You've got this $1.5 trillion problem that's getting worse and worse every year. Why is that? I think it's partly because people don't feel the cost of the education at all. The schools can raise tuition so if you're dental school dean and you want to give your faculty members raises, what do you do? You just raise tuition because the students are paying a percentage of their income, so they don't really notice it. You just keep doing that and then the students, they keep paying a percentage of their income so they don't really feel how expensive the education is. So you kick the can down the road, eventually all these people are gonna have to pay huge tax penalties cause in 20-25 years you have to pay taxes on that forgiven balance. How many people are gonna have $100,000 to $200,000 to send a check to the IRS in 20-25 years? None, almost none. You have all these people that are gonna be setting up to default on their student debt and I don't want any of my clients doing that so that's why I suggest saving a certain amount of money every month to cover that liability but what's gonna happen politically? Probably the only thing that can happen is some version of a bailout.
Howard Farran: But they're so dumb, they always bailout the banks. The last 2008 deal, they let everybody lose their home and then they saved these big banks. They're not gonna bailout the homeowner losing their home. What was the biggest recipient of that bailout?
Travis Hornsby: AIG or whatever.
Howard Farran: Yeah, AIG. Why couldn't AIG just fail?
Travis Hornsby: Yeah, I think it's because the risk was to the entire financial system. They would collapse. There's all these complex derivatives that you wouldn't really think about, just as a regular person, that backs everything. I think the argument is that ... The issue is, all that bad risk was in the financial system, right? That was a classic private sector meltdown, like a stock market meltdown. I think that this will be a different kind of melt down, it's gonna take a long time because it's the government providing all the capital so I think that at some point, there's gonna be this big crisis where all these millions of people are defaulting on their student loans and the tax penalties that are due.
Then the governments going to have to do something to handle that. Whether that's making the forgiveness tax free, which I think is possible or refinancing everyone to a lower rate. That's why I optimize the people that have more than $300,000 of dental school debt, I optimize their scenario for all these government programs to make sure that they're building wealth, they're saving for retirement, they're getting into a good practice situation and they're minimizing the cost of their student debt so they can maximize the ROY of their education. It's also why all this stuff, that's gonna happen with the government, it's also why the person that's making $250,000-$300,000, that's got 6% or 7% interest in their dental school loans. That's why I also like to suggest refinancing those people to 2%, 3% or 4% rate and just getting rid of it and just not having to deal with it.
Howard Farran: Does it also scare you, coming from your background at Vanguard that now the Bank of Japan is the second largest shareholder in Facebook and Apple? Do you think it's unprecedented that federal banks now, which always held all their money in bonds and trade bonds are now buying equities? Does that concern you because there's a global $40 trillion of government debt and the United States has 19 of it. What does it tell you when central banks are starting to buy stocks? Have you been following that?
Travis Hornsby: It's classically ... We saw that when I was working, you could tell all the mutual funds that had the high dividend rates or the high yields, that's what people would pour money into because they were starved for a yield. You couldn't just buy a treasury bond at 10% interest and clip coupons or a muni at 5 or 6 and just forget about it. Basically what's happened with assets in general is, if you have a super low interest rate the value of an additional dollar of profit in the future is way higher for present value, it's kinda technical. The $100 billion that Facebook's gonna earn in 10 years, if the discount rate that uses 2% instead of 4%, then that $100 billion is worth a heck of a lot more today so that means the stocks are worth way, way more. What happens if you have inflation? What happens if interest rates go back up? Then suddenly all these assets, all these stocks are worth way less. That's something that worries me for sure is just the stock market evaluations are pretty high right now, just asset values in general are pretty high.
If you look at some of the housing markets around the country, I think they're way over done. I think that the best thing that you can do is just figure out you though. You can sit here and analysis paralysis and think, "Golly, what am I gonna do." The simple answer is, if you're gonna buy a house keep it to less than two times your joint income and if you're a sole breadwinner two point five times. Keep your budget manageable, don't go out and buy the Porsche, don't go out and buy the Audi. Figure out your debt situation, make sure you're maximization your retirement accounts. Set yourself up to be financially Independent and then you can do whatever you want. You won't have to do all the procedures you don't enjoy if you set yourself up that way.
Howard Farran: How come, I think it's a generation deal. I'm 54, so the baby boomers were what, '45 to '64. I was born in '62. I drive a 2004 Lexus and its 2017, it has 150,000 miles on it. These millennials walk out of school, they don't even have a job and they buy a brand new car and then they go buy a house that's bigger than their parents house and twice as big as their grandparents house, you're like, "Dude, your grandma and grandpa worked 50 years and have a 1,400 square foot home and you just bought a 4,000 square foot home." What is it with no concept of debt or cost? Do they just think anti-gravity terms when it comes to money?
Travis Hornsby: I think I saw a survey the other day that said something like 50% of borrowers believe their student loans will be forgiven. So, half of America thinks that student debt is not really debt. It's just this femoral thing that you just have to make sure it stays good every month and then eventually it's just gonna get wiped away.
Howard Farran: So, if you want to hide something from a millennial, do you know where you put it?
Travis Hornsby: Where?
Howard Farran: In the oven cause they eat out every meal.
Travis Hornsby: Exactly. I just had a conversations with somebody who's got a $450 a month car payment, goes out to eat for every meal and they're saying, "I don't know what to do. I don't have any money for student loan payment." I said, "Sell your car, buy a $2,000 2004 Honda, stop going out to eat. Make sure you make all of your meals for the partner that decides to stay home and do that. Live in a cheap house." I think there's this too, this home ownership dream. I think for a lot of millennials it just doesn't make any sense.
Howard Farran: I want to say it sounds racist and nationalist and it truly is, I lecture in 5-6 continents every year and it's just, of the 7 1/2 billion people, it's just a billion people in about 20 countries where all the kids want to leave and have their own house. Then when their parents need to be thrown away in a nursing home, they're pissed off that the government doesn't pay for it. Whereas you go to India, Africa, Asia, South America, these kids, they come out of dental school in debt and they go back and live with their mom and dad and so does their grandma and grandpa.
I've been in houses in India with 35 people living in there and one of the reasons they live in there is because it's a wise financial decision and you don't have any of the domestic violence issues. 40% of calls going into 911 is cause a husband is pulverizing his wife. You can't do that in a house with 20 people because your brothers and your dad will kick your ass if he sees you. I think most of these dental students, they're gonna go back and work with their dad in the office, they should go back and live with their dad. It's just 220 countries in 200 countries they have the family unit and in 20 countries it's like, fly the nest. You think that's the norm so in America, Canada, and Australia, the new norm is that you're gonna come back from college and go get your own place but that's not the norm in Africa, Asia, South America, Central America, the family unit, I think, has been destroyed by this own your own housing dream bubble.
Travis Hornsby: I definitely see some folks where they'll be second generation dentists and the parents will help finance the cost of education so they're kind of insulated from the true cost of things. I've also seen folks that have moved home with their parents, not because they were trying to make a smart financial decision but because the student loans were so crushing that they felt like they had to. They didn't have a choice. I've seen some dentists that are living in peoples basements because their student loans payments are so high and they feel like they can't live on their own. I think dentists 30 years ago, aren't necessarily too, too different from dentists today in the sense that a lot of them still like going out to eat, nice cars, nice things like that. The biggest thing that's changed, I guess in my opinion, is just PPOs don't pay anything anymore and dental school debts skyrocketed.
Howard Farran: But you go to Brazil and there's so many dentists in Brazil and the husband and wife are both dentists and they both go to work every day but their kids are home with their grandma and their grandpa and maybe a great grandma. It just seems like such a far richer nourishing culture in India and Brazil than in typical urban United States. Where you don't live with your family and then your kids are in daycare, your mom's in a nursing home, I don't know. I get very cynical and jaded about America is the greatest country in the world when you go see the other ... I've lectured in 50 countries and there's so many more countries doing so many things better on the family side of the equation.
Travis Hornsby: Yeah.
Howard Farran: American's think they're number one. What they're really number one in is 911 calls for dads beating the crap out of mom. What would be your ... I can't believe we did an hour. That is amazing. How do they contact you?
Travis Hornsby: Sure. They can email me, that's the best way, firstname.lastname@example.org, I respond to everything. You can go to my website studentloanplanner.com and click on the different tabs and find the way to contact me there too but that's the best way, email@example.com and I'll give them my cell number. Millennials like to text, right? My cell phone is 850-572-8911 if you want to send me a text message or call me and talk about it.
Howard Farran: I just post this on Facebook, Twitter, Linkedin, Pinterest, all that. He's on Dental Town, he's got 250 posts on Dental Town. Go to the dental school section, financing school loan payment or go to the personal finance section. Last question I wanted to ask you. Did you watch that movie The Big Short?
Travis Hornsby: I did, yeah.
Howard Farran: I always like to recommend that movie to non business, non macroeconomic people cause I thought they did a really, really well, good job of explaining some really complex stuff to someone who doesn't spend a lot of time studying finance. Do you agree with that or disagree?
Travis Hornsby: I think it's a good thing to watch. Especially to see the psychology of a bubble. To see the psychology of people that are believing in a myth or believing in something that's gonna go up forever and it's not. It's seeing how the first people that criticize it and raise a flag and say, "Hey, maybe this isn't the right way to go. Maybe the prices for this are too high." The people that first say that are a little bit odd. I think that, yeah, Big Short is a great thing to see to understand the psychology of bubbles. I think that maybe not as much for dentists, Howard, but in The Big Short, one of the key points of that movie is when they find out that the stripper has six mortgages, right?
There's a lot of people out there that I can make the same analogy for their student debt situation. Maybe not so much for dentists but I've worked with other professions too and chiropractors, veterinarians, occupational therapists, physicians assistants in some cases. Another thing is we didn't even get to talk about this but physicians they get the AMA probably lobbied for this but they get public service loan forgiveness. So, they can work for 10 years, pay a small amount on their loans and the balance is forgiven tax free. I don't know, if I was at the ADA, I would definitely be trying to get treated the same way as physicians because they have the best backdoor scholarship program for medical school in history because of these current student loan rules. So, dentists really do get a bad deal with student debt.
Howard Farran: Maybe the ADA doesn't even know about it?
Travis Hornsby: What now?
Howard Farran: Maybe the ADA doesn't even know about that?
Travis Hornsby: Real quick if it's okay, can I talk about it real quick?
Howard Farran: You can talk add day, you can talk 40 days and 40 nights.
Travis Hornsby: This public service loan forgiveness, right? What is it? You get to pay 10 years based off of your income on your student loans. So a physicians a resident for 4-7 years in training, they're paying $300-$400 a month on their loans for that time frame. Then you pay maybe $2,000 to $3,000 a month when you're an attending for maybe 3-5 years. So your total payments are maybe $60,000, $70,000, $80,000. Maybe you borrowed $400,000, that $400,000 grows and grows and grows and grows to $500,000, you've only paid $70,000. The whole balance is forgiven in 10 years, tax free and you paid $70,000 for your med school education.
Meanwhile, that dentist, that wants to be an orthodontist goes to residency program, pays for it. Comes out with $600,000 to $1,000,000 in student debt and has virtually no not for profit job opportunities available and they have to pay for 20-25 years. Then they gotta pay taxes at the tail end of that period on the forgiven balance. I don't know how the PSLF, public service loan forgiveness, look it up. It was passed in 2007 with President Bush and the democratic Congress so it was a bipartisan thing. YOu're gonna hear a lot about it over the next several years because it's the biggest forgiveness benefit that, frankly I help a lot of physicians optimize for too. The dentists, the profession, is just under these screws and bolts and it just keeps turning and they're not getting [inaudible 01:01:12] programs out there. Definitely talk, if anybody in the ADA is listening, you definitely need to look at public service loan forgiveness and how basically all physicians are paying a fraction of the cost of their education while dentists are getting stuck with the entire amount.
Howard Farran: Why don't you start a thread on the ... cause I've podcast interviewed [inaudible 01:01:33], Maxine Feinberg, got Carol Summerhayes on the docket. I got the President elect one talked to her. One of the forums on Dental Town is associations and under the associations the ADA, why don't you start a deal or maybe that'd be an article too. Just call it an open letter to the American Dental Association, Travis Hornsby [inaudible 01:01:58]. Cause I know these guys, I'm sure they don't know because they're filled with dentists. Dentists want to talk about root canals, fillings, and crowns. They're not sophisticated in this. If you wrote that up, I'd publish it Dental Town Magazine. You can do it on the open letter to the ADA and then when we podcast interview the next couple [inaudible 01:02:18] to talk about this. Maybe we can get the ball rolling.
Travis Hornsby: Yeah, I think it's definitely something for the profession to advocate for. I did an analysis of dental school debt and I projected the forward looking cost of dental school and for the next, the class of 2021, four schools I think are gonna have average balances over $600,000, 13 are gonna be over $500,000, 14 are gonna be over $400,000, 24 are gonna be over $300,000 and maybe about a dozen of them will be less than $300,000. That's the way the profession is going. If you think about that for somebody who's a freshman entering school or who's got kids who might want to become dentists, this problem's gonna get a lot, lot worse. That's why I'm passionate about helping dentists improve the ROY of their education by saving them money. So, if you have the debt I want to help you save money one it but gosh, if you're an advocate for the profession, if you want to see future generations of dentists just not be absolutely burdened by ridiculous levels of debt. I really hope this is issue number one for an ADA, for example.
Howard Farran: Man, we've got the platform. The magazine goes to 125,000, Dental Town has 225,000 registered dentists, we know all these people. You're a freaking freak genius unicorn in dentist, you really are. You're just a freak and you're freak in the weakest area of dentistry, which is personal finance student loans. I mean, come on, I've been a dentist for 30 years, they're so gifted when it comes to doing surgery with their hands all day in the operatory and they know so much but then you ask them just one thing like, "What's your return equity? What's your return assets? What's your labor costs?" You just ask them one financial questions and it's deer in the headlights.
Travis Hornsby: Yeah.
Howard Farran: So if you could spell this out so eloquently like you always do, we could get the ball rolling. We could at least get a responder. Do you know they have the greatest economists they could ever get?
Travis Hornsby: Yeah.
Howard Farran: Did you see I did the podcast with him, Marco?
Travis Hornsby: I think I might have listened to that. They have some great resources, I just think that when they were sitting around the table making this student loan package, this big bill, 10 years ago, I just think the ADA was completely absent and the AMA was sitting at the table writing the bill. This is coming up too, the higher education act reauthorization is coming up, probably in the next year once you get through the healthcare stuff and the tax bill. They'll probably think about it in 2018 at some point. Certainly when they reauthorize that, if I was a dentist, if I was gonna pay my dues to the ADA, I'd want them to be lobbying the ear off of all of the Congressional representatives for the sake of the profession. I'll happily do that, Howard.
Howard Farran: We'll get it down. We need to get Kevin Earle from the local Arizona Dental Association over here to do that. We'll talk to him about that. Being a dentist, this is how [inaudible 01:05:28], when they passed the Affordable Healthcare Act, you know what pissed me off about it the most, more than anything?
Travis Hornsby: What?
Howard Farran: Is being a dentist, that 70% of the 19,000 towns adjust the fluoride in the water and 30% don't. I thought if you're gonna do the Affordable Care Act, why can't we just nationalize water fluoridization. Imagine if 30% of the town didn't believe in vaccinating for whooping cough. That every 10 years I'd come up to a vote of whether we're gonna vaccinate you for whopping cough and then you've got these movie stars saying it causes autism. It's like, okay, are we gonna follow movie stars or science? I totally understand the fear of all these diseases but when you look at 5,000 of water fluoridization and from around the world, they never did anything to address the cost. The Affordable Healthcare Act could have driven down so much pediatric decay by just saying, "Oh, by the way you have to ... We're gonna move water fluoridization to a federal law and not up for arms of every city council around the world."
Anyway, I think you're a genius. Love your work, big fan of your posts. Thank you so much for answering 250 questions on Dental Town. Thanks today for spending an hour with me. I want to get you mess out. I don't want these kids to wait three years to emotionally face the biggest decision and final question.
Travis Hornsby: Sure.
Howard Farran: You're sitting in dental school and you're gonna graduate half a million dollars in debt and there's this really hot chick next to you and you really like her but she's gonna graduate a half million dollars in debt too and the girl on the other side is only gonna have $100,000, would that sway your influence? Would you be less inclined to ask out the chick that's a half million dollars in debt when there's a runner up that's only $100,000 in debt?
Travis Hornsby: Is she gonna own her own practice or is she gonna be an associate, Howard?
Howard Farran: That's the million dollar question. I'll give you the best advice. I always think outside the box and I like to see things fresh. If you got a spread sheet of every American worth $100,000,000 everyone in America would think it'd be some guy like Trump, some 65-70 year old man that owns a big factor or real estate or whatever but it's not true. They all die of heart disease, their wife sells the business, they put it all in a bond fund and most people in America worth $100,000,000 are 80 year old women widows. That's what you need to be hunting down. Forget Plenty of Fish and Match.com and eHarmony, someone needs to start a dating site of $100,000,000 net worth 80 year old women. Go be her little boy toy, just give her the best last five years of her life and then inherit wisely. Is that good advice?
Travis Hornsby: Yeah. I want to help you get there, reach out to me at firstname.lastname@example.org and let's make your widow or widower worth $100,000,000 one day, right?
Howard Farran: Okay, Travis, thanks for all you do. Man, it was awesome to have you on the show.
Travis Hornsby: Thanks so much.