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15 Ways Therapists Can Build Wealth (Even With Student Loans)

“Student loan forgiveness” is trending on Reddit threads.

I get it. The amount of debt many new therapists face may seem hopeless. But it doesn’t have to be.

With just a few simple moves, you can set yourself up for financial independence—whether or not the loans are forgiven.

I left therapy grad school with a degree, a job, and $80,000 of debt.

“No problem,” I thought, “I’m making a professional salary now!” Fast forward to my first paycheck. After paying my student loans, a shocking amount of taxes, and the rest of my bills, I was still depressingly broke.

I spent the next eleven years paying off that debt and learning how to build wealth. After hundreds of hours studying personal finance, I learned that following just a few basic steps can get you there faster (and with less mistakes) than it took me.

For those who hate thinking about money, read the 5 simple steps that you can set and then forget.

For those who want to go deeper into ways therapist can build wealth, keep scrolling!

5 Simple Steps to Build Wealth

If you’re allergic to financial planning, just follow these 5 simple steps.

If you follow them, they can build you a massive amount of wealth. Just as importantly, these steps will allow you to retire comfortably without having to depend on a partner (or our underfunded Social Security system) to take care of you. Don’t give away your power!

1. Save 15% of your Salary in a Target Date Retirement Fund

ways therapists can build wealth

Saving in a target date fund comes in at #1 because of the power of compound interest.

Albert Einstein agreed. He famously stated that “compound interest is the eighth wonder of the world.”

According to the certified financial planners at moneyguy.com, every $1 you save when you’re 20-years-old becomes $88 when you’re 65.

Let’s imagine that you saved $15,000 in a low-cost index fund (such as a Target Date Fund) when you’re 20. By the time you turn 65, it will have grown into over a million dollars. And that’s if you never add another penny.

That’s the power of compound interest. So start today!

  • If your job offers a 401 K (or equivalent), buy it there.

  • If your job doesn’t offer a 401 K, then open an IRA at a well-known company (like Vanguard) and buy the maximum amount for the year. It won’t be 15% of your income—so start looking for a job that offers a 401 K.

My favorite Target Retirement Funds are offered at Vanguard.com. Below, their table shows you how to choose the right fund. It’s easy! If you’re still unsure, their customer service reps will patiently walk you through every step.

2. Gradually Pay Off Your Student Loan

student loan forgiveness slp

Don’t put off saving for retirement because of your loans. I made this mistake, and I regret it. Again, compound interest is the 8th wonder of the world. Get it working for you as soon as possible.

Pay off your highest interest loan while paying the minimum on all other loans. Then move on to the next highest interest loan. Keep chugging along until, one day, you’re debt-free!

If you have a hard time staying out of debt, use an app like You Need A Budget to get your spending under control.

Accept that your debt will take a while to pay off. Then build towards your future.

3. Buy Less Car

slp student loan debt

If you can’t save 15% in a Target Date Retirement Fund on top of your loan payments, rethink how much you spend on a car.

Your retirement savings will grow, on average, by over 7% per year. Your car will decrease in value by 15-30% per year.

Buy a lightly used car. Move away from luxury models. Save up and buy your car in full to avoid paying interest. And use the money to invest in yourself instead!

4. Don’t Buy Whole Life Insurance

how can slps become financially independent

Your friend-of-a-friend insurance salesperson may be very convincing. But whole life insurance is, for the vast majority of folks, often a predatory product. I’ve known several people who bought whole life insurance—and they would be much wealthier if they had just invested the same amount in a Target Date Fund.

Once you have dependents, then by all means buy a Term Life Insurance policy to safeguard their futures.

Also, cryptocurrency is not a retirement investment. Only buy crypto if you’re already saving 15% in a Target Date Fund and are gradually paying off your student loans. Even then, I personally don’t buy crypto.

5. Prioritize Your Joy

how can therapists build more wealth

To save money, I once bought a house with my parents.

Then—true story—I rented out a floor to my parents-in-law. This may surprise no one, but I hated it. Yes, I saved a lot of money. But it was bad for my marriage and even worse for my mental health.

Look hard at any “shoulds” in your life. Are they being driven by guilt? Cultural or family pressure? Fear?

Break free and prioritize your own path to joy.

Beyond the Basics: More Ways Therapists Can Build Wealth

how can therapists make more money
Maneki Neko – Japanese Fortune Cat

A whole world of opportunities opens up once the basics of wealth-building are in place.

For example, my partner and I have a plan to be work-optional by our mid-40s. This means that we will have the financial freedom to accept paid work only if we want to do it.

Below you’ll find more suggestions for building wealth.

1. Always Negotiate Your Wages

how to negotiate salary slp

We wrote an entire article on how to negotiate your pay, and it boils down to this: Always negotiate!

Women especially are taught to be “nice.” And that helping others is reward enough. Nope! You can help others and make more money.

Over the years, the increased wages you negotiated will result in tens of thousands of more dollars in your retirement accounts and future social security payments.

Don’t leave that money on the table.

2. Automate Your Savings

automate your savings

It’s human nature to use up any resource that we have. There’s even a theory for it called Parkinson’s Law.

Think of a report deadline. Do you find yourself chronically filling up all that time, only to write the report at the last minute? It’s the same with money.

To safeguard yourself from this very human tendency, automate your savings. It’s easy to do through your 401 K, IRA, savings account, etc. This way, you can use up all the money coming in—but only after saving enough!

3. Got a Raise? Save it!

speech-language pathologist investment advice

My partner and I are not reaching financial independence in our mid-40s by saving 15% of our incomes. We actually save 50%+. But we got to that high savings rate gradually. And by saving our raises.

In fact, it was so gradual, that it doesn’t feel like a squeeze. We can afford everything we need in an expensive city. Plus multiple annual vacations and plenty of extras.

Whenever I got an annual raise in my therapy job, I bumped up my savings rate. When my partner became a Storyboard Artist at Disney and got a big pay jump, we bumped it up even more. When I paid off my student loans, I rolled all that freed-up income towards retirement savings.

Don’t get me wrong, when we needed to use the extra income to upgrade our lifestyle, we did. Whether it was to have kids or to move to an expensive city that we love.

The key point is that we don’t miss the money because we never experienced spending it!

4. Educate Yourself

how to build wealth

Once you’re ready to save more than 15% of your income, do some research to optimize your investments. It doesn’t have to be complicated. And it shouldn’t include fancy stock-picking, day-trading, or insider knowledge of any kind.

It essentially boils down to this: Buy low-cost index funds. Diversify. And once you’re getting closer to retirement, find a smart draw-down strategy.

If that makes you feel overwhelmed, just stick to the Target Date Funds! They’ll get you across the finish line.

Resources I Like

Resources I DON’T Like

  • People yelling on YouTube or Tik Tok! Skip the drama. Investing is slow and steady.

5. Figure Out How to Make More Money

how to make more money

An obvious way to build more wealth is to make more money to save!

But our therapy jobs have a ceiling. No matter how high we climb up the therapist ladder, it’s hard to make much more than the single 6-figure mark.

You could take a per diem job, but more therapy on top of a full-time therapy job can be rough.

One of the 5 Simple Steps to Build Wealth is to prioritize your joy, so find an income source that feels joyful to you. Here are some ideas:

1. Create a Side Hustle

Free A Person Holding a White Paper with Flower Painting Stock Photo

If you follow your joy and talents, side hustles can be really fun. My sister and I started publishing and Etsy side hustles that were a blast.

Eventually, our side hustles did so well that it transitioned to the next idea:

2. Start a Business

how to start a business slp

After much trial and error, my sister and I landed upon an idea—this website and our best-selling Adult Speech Therapy Starter Pack!—that became a successful business.

Again, follow your joy and talents. The $100 Startup was a great book that inspired us to our keep costs low and dreams high.

3. House Hack

ways to make more money speech therapy

Although my experience house-hacking with all the parents was an unhappy one, we did save a whole lot of money. In fact, I paid off $50,000 of student loans in a single year.

Please don’t live with people that detract from your quality of life. But if you can rent out extra rooms to roommates, students, or Airbnb out some space in a way that feels good, it can be a great way to cut down on housing costs, which are most people’s biggest expense.

4. Real Estate Investment

real estate investment for therapists

People seem to fall into two camps when it comes to real estate investing: They love it or they hate it.

I fall in the latter camp. I owned a rental property for 6 years. I found the experience very stressful and ultimately choose to sell the property and wash my hands of owning real estate. That said, many people build significant wealth with real estate investing and enjoy doing it.

Thoroughly educate yourself with reliable resources (again, not anyone yelling on YouTube or pushy salespeople). And keep in mind that your primary residence is not an investment property.

But What About Student Loans?

student loan forgiveness slp

If your student loan debt is just too high for comfort, there are ways out there to get them paid off.

1. Take a Job That Will Pay Off Your Loans

slp loan forgiveness

In my last year of graduate school, I was offered a job in rural California that would have paid off all of my student loans over 2 years. I ultimately didn’t take it, but it was an exciting prospect. I also know a physician who will have hundreds of thousands of dollars of student loans forgiven when she finishes a 3-year contract in her home state of Wyoming.

There are opportunities out there if you’re flexible and want it enough.

2. Look Into Public Service Loan Forgiveness

The White Coat Investor wrote an in-depth article about public service loan forgiveness. Although he writes for physicians, you’ll get a good understanding of how the program works.

No matter how far away it may seem, you can build significant wealth! Start taking the 5 simple steps to financial freedom today.

Stay in your power! We’re rooting for you.

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