Baby Steps Can Lead to Big Time Money Results

Baby Steps Can Lead To Big Time Money Results #debtfree #networth #studentloans #debtpayoff

Hi, Team! I’m thrilled to bring you this story of how Dr. Jeff (the Debt Free Doctor) and his wife used their hybrid version of Dave Ramsey’s baby steps to pay off hundreds of thousands of dollars in student loans on his way to a 7-figure net worth. Dr. Jeff is an impressive guy, and with my wife and I owning and operating our own dental practice – I’ve already learned a great deal from Jeff. But the best part about this story – you don’t have to be a doctor to take some great debt payoff lessons with you!

If you’re looking for more stories about how tough, hard-working people have paid off tons of debt, I have this one about Jon and Heather and this one about my first client.

But today isn’t about my posts, it’s about an inspirational family achieving great results through discipline and hard work!

Here’s Dr. Jeff:

(Photo courtesy of Al Emmert)

My Debt-Free Story

My name is Jeff Anzalone and I’m a periodontist from Louisiana. I’d like to share with you my story about what getting into debt over your head can do to you and how my wife and I managed to dig out from under hundreds of thousands of dollars in debt to becoming debt-free with a seven-figure net worth.

And now my story…

Career Decision

What originally prompted me to get into dentistry, was an uncle I was close with, who was also a dentist. Of course, for a while, I went back and forth between dental and medical school, like many dentists do. But I noticed, all my friends whose fathers were dentists were always present at their baseball games, football practices, and so forth. Whereas the dads who were doctors were rarely ever there.

Having a family and actually being present to spend time with them has always been important so I felt that dentistry just seemed to be a better path, all around.

When I returned home, I was supposed to start working in a private practice. But instead, I actually got a pretty rude awakening and a hard lesson in business. 

Here’s what happened…

My Dilemma

Throughout my residency, I’d been talking with a local specialist group in my hometown that wanted me to come on board with them once I graduated. In fact, they actually made a firm verbal commitment to hire me to start working with them, once I finished my residency.

We’d been talking off and on throughout my training, and obviously, as I got closer to graduating, we were talking on a regular basis. So as the residency neared the end, I called them up to let them know when I could start work.

 A very awkward silence followed and something was mumbled about this not being a good time to bring someone into the practice.

My first thought was, “Is this a joke?” “Am I on Candid Camera?” Unfortunately, it was not a joke. Needless to say, I was incredibly disappointed. But even worse, my wife and I were broke and scared to death! Just like that, my dreams of an easy life in an established practice were gone. I went from elated to terrified in the space of a few moments.

Til’ Debt Do Us Part

This is the part in my story where the DEBT issue really hit the fan. Up until this point I hadn’t given it much thought because I ALWAYS knew I’d have a job and could pay it back. 

Mistake #1  Interest-only mortgage

Here’s quite possibly the BIGGEST mistake we made: buying a home without putting 20% down. I contacted a banker friend of mine while in my residency. He provided an interest-only loan to us due to the fact that he knew me + the group I was supposed to be joining. 

If I could go back in time, I would NOT have purchased a home until we were consumer debt-free.

Mistake #2  Student loans

Before I started dental school, I thought the ONLY way to pay for it were loans. I did work before moving off to school, mowing yards in high school and college, but didn’t earn enough to pay my way through school. Too many Americans are accumulating student loan debt to the point that they can NEVER get ahead. Many of us start so far in the hole that it’s sometimes next to impossible to dig our way out.

The Wall Street Journal ran an article about a dentist, Mike Meru, that had accumulated $1 million dollars in student loans.

See this article here

How would you like to start off in your new job knowing that you owe that kind of money to creditors?

My advice is to do your research. There are thousands of grants available and many go unused. Also, there are jobs that offer student loan repayment options or you could consider serving our country by joining the military. 

Mistake #3  Personal loan from a family member

At the beginning of our journey, it was so tight to make ends meet, that I had to borrow money from my grandmother. This was money that had already been earmarked to give to her son (my dad) after she passed. 

I HATED having to take it but it was all we could do to pay the bills at the time while I was also mowing yards on the side. (Yes, you read that correctly. I returned to several of my previous clients from my high school days and asked if I could mow their yards again…at least for another year. Very humbling experience.)

If you do have to take a loan from a family member, make sure that you have a written agreement to the terms of the payback. This way, Thanksgiving dinner will be a little more pleasant!

Priority Changes

Growing up, we didn’t have much. I take that back. We had plenty (all the basics were always covered) unless I compared ourselves to other friends with big houses, vacation homes and fancy hunting and fishing camps. 

We were your typical blue collar family. I had a great childhood but something burned deep inside of me whenever I went with friends to their expensive camps or beach condo. I knew someday that I was going to have all of that and more. 

Dave Ramsey uses a term called “Doc-itis”

It’s for those of us that put our lives on hold for a fancy degree, graduate then want everything NOW. Why? We deserve it. We are entitled to it. At least that’s what many of us think… 

I admit. I had a bit of Doc-itis until my job offer fell through. Between the $250K+ in student loans, house and practice loans, my priorities began to change very quickly. 

I could care less about material things anymore and began focusing on eradicating all debt once and for all.

Dave Ramsey

I can still to this day remember where I was when I first tuned in to the Dave Ramsey show. It amazed me that so many people had money issues (most involved student loan or credit card debt). What was even more amazing was that Dave would give them the same “Baby Steps” which would apply to basically anyone whether you were a college student or someone getting ready for retirement. His solutions were so simple that anybody could benefit from them. 

His information is what helped me plan out a blueprint for attacking our debt. 

The How

Now you know my story, where I come from and what caused me to take a dramatic turn in my life to erase the debt. Now I want to give you the “how” I was able to climb out from under it to achieve debt-free status and build up a nice nest egg along the way.

1. Emergency fund

Dave recommends saving $1000 first before attacking your debts. I felt that this was too low for our family. We opened a Vanguard Money Market account and built it up to $5,000 before beginning to tackle our debts. I’ve always wanted a larger cushion than most folks.

2. Debt Snowball

I’m a visual kind of guy. For me, listing my debts smallest to largest on a sign and hanging them in our home office is what kept me motivated during the several years it took to become debt-free. I had several student loans and started with the one with the smallest balance. Once it was paid off, I placed a line through it (left it on the chart) and began throwing all my extra money at the next one. 

After 3 or 4 debts are paid off, traction really begins to pick up as you’ll notice that the larger debts are paid off quicker because more money is going towards them instead of what most do and pay the minimum for all debts. 

I agree with Dave, this process is totally psychological

I noticed that I really began to get into it after debt #2 was paid off. By the time I got to the last debt, I was paying several thousands of dollars a month. I knew in the back of my mind that once the debts were paid off, I would have a large amount of money that would someday be invested.

Speaking of investing, this is another area that Dave and I don’t agree on

He does NOT recommend doing any type of investing until all debts are paid off using the debt snowball method.

Due to the fact that I was getting a late start on working (I was 31), I did not want to lose out completely on the power of compound interest. My wife and I started off maxing out traditional IRAs then moved to simple IRAs with my business. This enabled us to take advantage of the magic of compound interest along with a nice tax deduction as well. I felt that I was making enough money plus I was disciplined enough to both pay down debt and invest. 

3. Emergency Fund – Finish funding

Once that glorious day came and we had paid off all consumer debt, I took what I had been paying in the debt snowball and completed the funding of our emergency fund. Dave recommends saving 3-6 months of expenses for emergencies. I felt more comfortable with 12 months. I currently have about 1.5 years of expenses saved for emergencies but also have the appropriate insurance policies in place in case of an emergency (disability, business overhead expense, etc.).


Dave recommends investing 15% of the household income after the emergency fund is fully funded. More than likely you’ll be able to save much more than this due to the large sum that is left over from your previous debt snowball. This was the cool part for me as we began saving about 30% initially and now has grown to over 50% of our income each year. It doesn’t take long before your money is making more each day than you are by going to work!

5. College funds

As soon as our boys were born, we started a 529 plan for each. I know that Dave recommends waiting until becoming debt free to start them, but again, being disciplined was the key. Most financial institutions allow you to set up an automated savings method. You simply log in to your account, select your funds, the amount to be invested each week or month and voila, you’re in business. These payments can easily be modified, paused, or completely stopped at any time. 

We do the majority of our investing through Vanguard. Their website and app are both very easy to navigate. You can quickly access your accounts and modify investments with a few clicks of a mouse.  

6. Mortgage

Once you’re debt-free, are routinely investing, and have a fully funded emergency fund, now it’s time to get rid of the mortgage! This was the last debt listed on our wall chart and it was a blast watching it being chipped away each month.

We became debt free with a paid-off mortgage when I turned 41. I’m humbled by this accomplishment because there were so many people and resources that helped us get to this point. 

It’s for this reason that I started a blog to help not only share my story but also help others avoid the mistakes that we’ve made in the past.

If you’re interested in learning more, feel free to visit my site:



Reader’s Input

What do you think about Dr. Jeff’s hyrid plan and have you done anything similar in paying off your debt? If you were Jeff and his wife, what would you have done differently? Let us know in the comments below!

Thanks for reading!


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– Mike
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