Dr. Amanda Liu, DrWiseMoney.com

Dr. Amanda Liu, drwisemoney.comToday we are delighted to have Dr. Amanda Liu, creator and blogger for DrWiseMoney.com.  Amanda is a PGY2 at Banner University Medical Center and her blog serves to leverage her voice as she achieves her financial goals of purchasing a home, paying off student loans, maxing out retirement savings, and becoming retirement eligible by 2023. Dr. Liu was generous enough to share:

  • how she has beaten big banks at their own game by leveraging credit cards to pay down her student loan debt and save $60,000 in interest
  • how she uses those same cards to maximize her cash in reserve and put money into retirement
  • how she was able to make $3,000 by just moving money around – this is is the first time she’s shared this publicly
  • her bad experiences with mortgage bankers and her how she’d advise others on how to find a great lender

Josh Mettle: Hello and welcome to the Physician Financial Success Podcast! My name is Josh Mettle, and this is the podcast dedicated to advising physicians how to avoid financial landmines. Today, we’ll be talking with Amanda Liu, creator and blogger for DrWiseMoney.com.

Amanda is currently a PGY2 at Banner University Medical Center and her blog serves to leverage her voice as she achieves her financial goals of purchasing a home, paying off student loans, maxing out retirement savings, and becoming retirement eligible by 2023. I love that: start with the end in mind. I just love that. Amanda has a passion for writing and speaking about personal finance through which she helps her colleagues achieve financial success. She firmly believes that financial freedom makes for a better and happier doctor.

Amanda, welcome to the show! I’m super excited to have you with us this morning.

Amanda Liu: Thank you for having me.

Josh Mettle: You’re very welcome. Well, I love your blog and maybe I’ll just start there for a moment. Anybody who hasn’t been to your blog needs to do that. They should just go check out your blog, DrWiseMoney.com. You’re extremely witty. I love how you bring Mini Wise Money into the picture and your family. It just reeks of personality and tons of great information there. So if you haven’t been to DrWiseMoney.com, go do that. Amanda let me have you open it up here. Just tell us a little bit about how you decided to start your blog and where you kind of developed this financial acumen that you have.

Amanda Liu: Okay. When I was about to graduate from medical school, I was aware that a lot of my close friends, who have family and kids, are graduating with $300,000 to $400,000 of student loan debts, and that $300,000 to $400,000 of debt is rolling and snowballing at 7 percent interest rate and it’s not a house payment. It doesn’t amount to anything, but just kind of speak of the living expenses and tuition that you had to take out when you couldn’t work two other fulltime jobs during medical school.

I was fortunate because I have extreme debt aversion. I couldn’t sleep with the thought of living on borrowed money, so I had to come up with some ideas to deal with that while in med school. And so, I was fortunate to have different things that I did including having two jobs and using credit cards to my advantage to minimize my student loan debt. So as I was able to pay off my student loan a couple of months after graduating medical school, I wanted to help my friends do the same, so that’s why I started to blog.

Josh Mettle: It’s excellent. Keep going.

Amanda Liu: Yeah, okay. Then the other thing that you asked me about is how did I develop any of these skills in managing my finances. It really comes out of necessity. You know I always think Chinese people are good for two things: cleaning and saving money. But my parents are horrible at those two major things that my ancestors are proud of, so they’re great parents. They’re full of love and they’ve taught me so much through life, but they just could not balance a checkbook, and they always spent $10 when they have $5.

So early on in childhood, I was in Taiwan before I came to America at 16, there wasn’t a lot of consumer protection so my dad, a scholarly person who’s a civil engineer, got into pretty bad debt and there would be debt collectors coming to our door. As a child, I was pretty frightened and my dad would leave the house and have meetings with these debt collectors. I always worry if he’s going to come back with all his limbs and stuff like that because we always watched Chinese mafia movies, which I shouldn’t watch.

I felt pretty powerless and frightened, but then in my little kid, you know 5, 8-year-old kind of desire to help, I started with a little mission and I started collecting coins around the house from pockets and behind the cabinet and so I saved up those coins, hoping to help pay off at least a little portion of the debt. My mom sat me down one day and she said, “Amanda, I appreciate that this is the effort you’re putting forth but we need this money to buy food. We can’t afford to set it aside.”

So at that moment, I think my little spirit was kind of crushed because even in my most, I don’t know, valiant effort to help my parents, I wasn’t helping. I think that kind of caused me to have an unhealthy relationship with money and that it’s fear-driven. I’m kind of enslaved by money. But at the same time that blessed me with a drive to be debt-free and that’s why today I am completely debt-free. The only debt I’m about to take on is my second home mortgage at 3 percent. Yeah, that’s kind of my story, the beginning of my story.

Josh Mettle: That is a great story, and I find it somewhat ironic that you and I are here on this podcast, talking about money strategies and financial freedom strategies and probably it sounds like both of us are driven a little bit by fear. I likewise can remember a moment when I was probably about 11 or 12 years old and we were at a check stand at a grocery store, a Food 4 Less on Redwood Road, I will never forget that. I realized that my mom was purchasing groceries with food stamps and it was a hard time in her life. She was a serial entrepreneur and sometimes that worked out well and sometimes it didn’t, and luckily she used that for the time when it was a necessity and immediately moved on. She went back to law school and had a great career.

But that moment created a point of fear in my life, too. I didn’t think I was going to lose my legs from the Chinese mafia but you know when you were a kid at those moments, all you know is this is really serious. And so I think that fear, that drive by fear can be healthy and we have to channel it and I think if you wouldn’t have had that fear like I wouldn’t have that fear at that moment, maybe you and I wouldn’t be here right now trying to help people figure out different ways to be more financially free.

Amanda Liu: Yeah.

Josh Mettle: So I’m grateful for our fears in that way.

Amanda Liu: Me, too. If it doesn’t kill us; it did build our character.

Josh Mettle: Totally, totally. Yeah, we’d be sleeping right now if we weren’t fearful, right?

Amanda Liu: Yeah, that’s right [laughter].

Josh Mettle: All right, so I talked about this just in the show opening, but in the first post that I read in your blog, was it DrWiseMoney and Crew, I just thought it was such a cute name. It’s obvious that family is important to you and you mentioned that they didn’t have kind of the same skill set that you did in terms of financial acumen but how else have they influenced you in your blog? I mean I guess what I’m saying is for you to have developed the financial skills is one thing, but for you to create a positive impact from that skill set is another thing. I wonder if somewhere in there it seems like family has influenced you because you brought them in to be a part of your blog.

Amanda Liu: Definitely. I mean part of my parents spending $10 when they have only $5 is because they just have the most gregarious and generous hearts. My mom, she’s a gourmet chef who’s written 20 recipe books and just loves, loves to entertain. We don’t have much money but my mom always will have friends over whether they’re really, really rich people or they’re desperate friends who are kind of in the spot where they’re homeless or foodless, and my mom always has this open-door policy where people just come over to eat. Someone steps into the door and mom will start cooking and get food for them. So that I think kind of started me early on in my childhood to be very relational.

My parents really just loved people and people of all walks. They never looked down on anybody and never looked up to someone just because they have money. That kind of made me really love to reach out, and I know fortunately also really made me really like to put myself out there and be vulnerable. Lately with doing the blog, I could be maybe helping 95 percent, 98 percent of the readers and there are people who will have very positive response and kind of make my day. But at the same time there maybe 3 percent of people on Facebook or something make negative a comments and usually what’s odd is that those negative comments sort of is kind of a dagger in that kind of space quite a bit.

I think it’s both a strength and a pretty big weakness to like to reach out and put myself into vulnerable positions, so that’s what I think my parents have gifted me with. It’s an open heart that doesn’t shut up even though I could have had repeated trauma. Yeah.

Josh Mettle: Go ahead.

Amanda Liu: So then, I want to talk about my daughter who is the love of my life. She’s taught me so many things beyond anything I’ve ever taught her and ever will. I remember before starting medical school when I was looking at cost of attendance, the first year $90,000. When I looked at that, I said, “I’ll never made $90,000 in a year in my life,” and I still haven’t as a PGY2 resident right now. And I say, “How can I borrow all this money and just live on borrowed money?” I was complaining on the phone to my mom and I started crying.

My daughter then, Mini Wise Money, she was only 2 years old. She said, “Mommy, don’t be scared of moneys. I’m here.” And she hugged me. She said, “Don’t be scared of moneys.”

I just held her really tight, and I said, “Wow! This is the biggest treasure of my life.” She’s taught me for the first time to not be fearful. That’s why I include her in my blog because, I mean, there’s really no point for me to make any money if it weren’t for her because I’m super low maintenance. She cuts my hair since when she was 2-1/2. The first time it was 2 inches short on one side, but who cares? I’m not the type of girl who said hair is the second face of a woman. I just tied it up in a ponytail and it’s fine. So now she’s really good at it, and I have lifetime free haircuts from her and then and all clothes are either vertical passed down from my auntie or horizontal passed down from my cousins, or $4 from Goodwill. I mean I truly just don’t have the desire to decorate myself.

All my money basically goes towards whatever she wants to do and she’s a lot more fashionable, a lot more artistic. She’s only 8 years old, but she loves to be artsy and kind of dress up and stuff. I try to support that but at the same time, I emphasize to her, “Honey, the only two things that are really precious in life cannot be taken because it’s going to be in your heart or in your brain, so don’t spend too much energy, resources, or anything to decorate the outside.”

That’s why if she said, “Mommy, I want to do horse riding,” the next day I sign her up for horse riding even though it’s money that I don’t easily make. Yeah, I think she’s the reason why and now because of her, some of my fear has been replaced by love.

My drive towards either financial independence or being able to take care of my family financially is not as much although still, partially fear driven as it used to be.

Josh Mettle: It’s beautiful. You know, Amanda, you sound or I hear in what you’re saying in what my mom’s always said about being a mother and she said, “The end goal or the way that she’ll kind of measure life is that, if she has been able to leave behind an improvement on the species.” What she means by that is little things, little tools and little things that she’s learned and little things to save me from pain, or to bring me more success that she’s brought into my life that I will now be able to be an improvement on the species. I look at my kids the same way and it certainly sounds like you are as well.

Amanda Liu: Yeah.

Josh Mettle: It’s a beautiful story. Well, so the next blog I read at your site was this really funny name and I thought, “What in the world is this all about?” The title was “All the Right Plastics in All the Right Places”. As a guy, I had to read that, I just had to know what it was about. So anyway, it obviously is a play on words and it talks about how you leverage credit card debt, a thing that most people are – it’s probably got to be like tarantulas, black widows, and credit card debt in terms of fear. But you’ve actually leveraged that to build your net worth and pay down your student loan debt. So tell us a little bit more about this strategy and how in the world did you come up with it?

Amanda Liu: Okay, again it came out funny way. Most of my life’s success came out of some sort of failure in the past whether it’s a failure on my part or failure from my parents’ mistakes, or someone else’s. So what happened is, when I immigrated to America when I was 16, my dad was already 50 and so he started a government job and he started using credit card, too. But he is very energetic like me and sometimes he could have all sort of energetic vectors running him in all directions and he’d be a little bit lost. So what happened is he fell behind on his credit card payments. His credit card interest rate was 30 percent.

Josh Mettle: Wow!

Amanda Liu: When I got that phone call as a second year at UC-Berkeley, I panicked. I panicked really bad and I picked up seven odd jobs while going to school fulltime and for a year and a half, I was sleeping 4 hours a day. I was trying to do everything I could to squeeze out any penny I have to send home to pay off this credit card debt. That actually started my deep-seated almost hatred towards credit card companies.

Josh Mettle: Sure.

Amanda Liu: Then I think so starting before medical school, I also had gone through some financial crises of my own. And so, I had some credit card debt but I was very vigilant, so none of my credit card debt ever had interest rate greater than 2.5 percent, and I used that to help me pay my car loan, which was 7.99 percent. In my scheme of things, basically it was just a buildup and practice of always leveraging debt in the sense that I’m perfectly fine with owing $50,000 on credit card as long as it’s 0 percent or in some of my posts I’ve explained it’s negative interest, literally negative interest not 0 percent.

I’m okay with that but I’m totally not okay with even $20,000 or $30,000 of student loan debt at 7 percent because it just doesn’t make number sense to me. So what happened in medical school is we have our financial aid office talk to us and say, “You know what, if you guys need money, just write us a little email, shoot a line to how much you need, and the money will be there in 30 days.”

I realized why are they so eager to lend us money? Why is the monopoly money so readily available? I know (1) we’re not big banks who can borrow and walk away at 0 percent and not knowing when to pay back. We’re just little people and why are they doing that, and I looked at the numbers. Of course, 4 percent origination fee, 7 to 9 percent interest rates. Who wouldn’t want to lend to us, right? I looked at it and say, “Okay, I’m going to try to avoid, minimize, delay the origination fee and interest rate for as long as possible.”

So what I did is every 4 months, each semester we would be paying about $16,000 just in tuition, then of course there’s living expenses and all the other stuff. So we can run like this parallel experiment. Basically what happened is a majority of my classmates would take out $90,000 of student loans day 1, first day of medical school, and they’ll put it their savings account, bearing 0.01, 0.1 percent interest, or they’ll put it in their liquid checking account. On the other hand, what I do ‑ and then they’ll pay everything with it – their tuition, their living expenses, all that stuff with that money sitting there that they borrowed.

What I would do instead is I would take out a credit card and use that credit card that has 18 months 0% interest on purchases and charge my $15,000, $16,000 of student loan on it.

Josh Mettle: Wow!

Amanda Liu: And so – yeah! So instead of writing $90,000 of debt, with 4 percent origination fee, well 4 percent is the highest origination fee. There was like 1 percent. You know it’s all gradient but so, just for an example, instead of doing that with that upfront fee that starts rolling on principle plus 7 percent to 9 percent. Grad PLUS was 9 percent I believe, and just letting it right snowballing starting day 1 of medical school, I was rotating, using all sorts of credit cards. And then what happened is, as I seemed to be a big spender and then I paid off with a different card and seems off to be responsible and pay off everything, all these big banks started competing for my business, helping me pay for my medical school.

Then I got more and more offers and I just never really needed to take out student loans until like the very, very last chance and the last draw I just need cash fold, and that’s when I do it. I did some calculations. Conservatively just by doing this, not even counting all the cash back that I get, all the free mileage, all the rewards, I saved $60,000 just in interest during 4 years of medical school.

Josh Mettle: Wow!

Amanda Liu: Yeah, and then so part of me just said right back at you, credit card companies, you eat off of on us people’s backs like my parents. It’s time for me to get some of that interest-free dollars that you borrow from taxpayers.

Josh Mettle: Wow! I love it. Okay, a couple of thoughts.

First, brilliant. I mean you looked at the black widow tarantula fear right in the face and you figured out how do I reverse engineer this thing to make it work for me. If any of our listeners haven’t read the blog, she goes into greater detail, so go do that. Read the blog, and it’s very analytical. There’s spreadsheets. There’s dates due. She’s got all this master planned.

But what I think is so beautiful here is that there’s a financial strategy called the carry trade and carry trade is very simply the strategy that most investment banks use where they’ll borrow from the Fed. They’ll get the Fed funds rated at you know 0.25 percent or whatever it is, then they turn around and then they use that to lend out and they get mortgages, commercial loans, cars, student loans, credit cards, and as you just heard Amanda say, some of that money was going out to her parents at 30 percent interest. You borrow at 0.25 percent, and you lend out at student loans between 7 percent and credit cards at 30 percent and that’s why Wall Street is Wall Street, right? That’s a pretty good spread.

Well, you did that. You employed the carry trade strategy. You borrowed at zero to negative because of your rewards. You utilized that capital, and saved yourself all that interest, so you borrowed at a low, and deployed what would have cost you more and that spread is called the carry trade. It’s just that you don’t usually see everyday folks use that kind of a strategy because there’s this fear of debt. Well debt can be bad unless you’re making more money than it costs to service the debt. That’s what you figured out that I can borrow between strategically, intentionally between zero and negative cost with my points back, and I can deploy and save myself 7 percent or your car loan and your student loan debt, so beautiful. I applaud you.

Second, I think it’s so cool that you’re now bringing this strategy to folks that can use the same thing if they go about it intentionally.

Amanda Liu: Yeah, I hope people will open up a little and give it a try because honestly some of my friends, they’re pretty scared just like you said about this big black tarantula. But the truth is, if you think about it, it’s not even that much effort. All you need to do is have an Excel sheet, know your due dates, and a month before your due dates, write another balance transfer check to yourself or open a new credit card. When you open a new credit card in the frequency that is between 18 months to 21 months, all it does is to boost your credit score, really.

Josh Mettle: That’s correct.

Amanda Liu: A lot of people are concerned, right? And so like for me, over the times of kind of practicing and using my financial muscle and borrowing power, I mean I’ve only had $60,000 of annual income, but I have $250,000 of credit limit. That allows not only for a buffer let’s say because of let’s say – what do I want to do with $30,000? Let’s say I put $30,000 in retirement. Right now I’m at zero consumer debt, zero credit card debt right now, but let’s say I just went ahead and will use a Chase Slate card and open, use that and write myself a $30,000 check to fund my retirement or Ella’s 529 this year, and so also I have $30,000 of revolving debt at zero percent for 15 months on that card.

Now it would look really bad if I only have $30,000 of credit limit and it completely maxed out at 100 percent credit utilization. However, $30,000 out of $250,000 is a low credit utilization, which will not hurt much of my credit score.

Josh Mettle: Well and the thing is that the other credit card companies don’t know that you’re carrying all that credit card debt with zero interest. All they see is she has credit card debt, she pays on time, she’s a doctor, let’s give her more credit.

Amanda Liu: Yeah, exactly.

Josh Mettle: And you’ve just figured out the system, so beautiful. This kind of enabled you then, to have you save $60,000, which by the way, $60,000 in saved interests, when you start to pay that back once you’re an attending, don’t forget that you got to earn $100,000 as an attending. You have to save $60,000 because you’re going to pay taxes on all that money.

Amanda Liu: Yeah.

Josh Mettle: That $60,000 in interest that you save really equated to saving yourself $100,000 in income as an attending.

Amanda Liu: Definitely.

Josh Mettle: Now you’ve freed up this liquidity, this extra money, and then you were able to save like $23,500 post-tax dollars to invest in your retirement plans, so tell us a little bit about that.

Amanda Liu: So again it’s like similar to what I was doing in med school, only this time, I’m not having to pay $50,000 every year of tuition, and I’m making $50,000 a year, not much, but $50,000 a year as a resident. Imagine just like the cash flow is way better now as someone who’s graduated from medical school, but I’m still sort of playing the same games. What I do is I make a monthly budget and once I look at that budget, then I say what of these expenses are chargeable. Anything under the sun that’s chargeable on a credit card just charge it because there’s no reason not to. It just makes everything perfectly streamlined. You can look up your activity. You know where your money is going. Everything is automated. Plus every dollar, every penny I spent I get some sort of rewards.

One of my posts talked about how I got $1,200 back from Discover by spending $4,000, which is 30 percent back ‑

Josh Mettle: Whoa!

Amanda Liu: By buying groceries.

Josh Mettle: Wow!

Amanda Liu: That is a great post to read, and I’m always on the lookout for deals like that. And so whenever I find something like that, I write about it because I want other people to take advantage of it, so the idea is not only does credit cards simplify my life, save me interest and let’s see – and the most important thing is it allows me to prioritize my cash flow. Everyone would admit a $50,000 income as a resident it’s limited because there are so many competing right places that do you want to save for college, do you want to save for a house, do you pay your student loan down. There are just too many competing worthy costs.

The most important thing is to realize that you know don’t put that cash on anything that you don’t have to put cash on. Cash is king and reserve it for things that you cannot recover in the future, for instance, Roth IRA. Roth IRA is going to be the cheapest to me ever right now as opposed to when I become an attending, which is not even available. I have to do backdoor Roth IRA.

Also I like to do post-tax everything right now because I know it’s like this is part of like the Chinese culture. We like to buy stuff on sale, so I like to pay cheapest taxes ever possible in my tax bracket and then never have to pay it again, at least according to current laws. That’s why I like to charge everything I can on to my credit card at zero percent. For instance, there are cards will give you like 21 months of 0 percent interest rate. At that point, you already got a pay raise and all the additional other stuff.

I do that. I charge my expenses onto the cards, freeing up my cash, and put my cash into Roth IRA, Roth 403(b), and my daughter’s 529.

Josh Mettle: Beautiful! And so when those let’s say you get to the end of that 21 months.

Amanda Liu: Uh-huh.

Josh Mettle: I just want to go back one step. There’s a nuance in what you said that’s very important. What you’re identifying is that you will likely never be in a lower tax bracket for the rest of your life than you are right now.

Amanda Liu: Yes.

Josh Mettle: As such, it makes sense to pay taxes on that money and put post-tax money into your IRA because then when you draw that money out in retirement, you’re not paying taxes on it because you’ve already paid taxes on it. Did I get that right?

Amanda Liu: Yeah, 100 percent.

Josh Mettle: Okay, perfect. Okay, so then my second question, so now we get to the end. You’ve done your budget. You’ve very intentional. You’re not going up buying a Fendi bag. You are creating a budget. You’re saying, “Okay, these items I can charge on a credit card. I’ve got 21 months no interest.” And then, so walk me down the road 21 months from now. What’s the strategy that happens with that debt? Is the plan then just rolling that forward and do another no-interest card? At what point does the repayment enter into the strategy?

Amanda Liu: Part of the answer would be never, but I will walk you through the steps. There are three things I can potentially do with the debt. Number 1 would be right now all the balance transfer offers I’m getting offers me 1.7 percent effective interest rate. That’s accounting for the transaction fee that they charge, so generally I get, I don’t know, 12 offer letters every month. I just rip it up and say, I don’t need it for another 20 months.” Those basically come in and say, “I’m going to charge you 2 percent upfront transaction fee and you get to write the interest for free at 0 percent APR for 14 months,” so that comes down to roughly 1.7 percent for the whole year.

Josh Mettle: Got it.

Amanda Liu: And then, alternatively as that disappeared, there’s another thing that I really like. I don’t want to keep plugging a particular company, so I’m just going to say there is one company out of all the markets that offers zero percent transaction fee for the first 60 days if you were to do two balance transfers with them. In other words, it’s true 0 percent interest rate for 15 months. I can literally turn around, write myself a check, pay off that card that is due in 21 months with this completely 0 percent and then carry it forward for another 15 months, okay.

Josh Mettle: Wow!

Amanda Liu: Yeah. You know what, I honestly think everyday people who are hardworking like us really should have a chance at swaggering the way big banks do. So then the other thing would be the nice thing is even though we get not so much pay raise every year in residency, but we do get some, so you know by that time when 21 months come around, I would probably be able to cash flow it a bit. Then ultimately attending will come. Maybe I will pay it off, but really honestly when I can borrow money interest-free, no matter how much money I make, I don’t think I will pass that chance up. What I would do really is eventually what’s going to happen is I will be building and saving beyond all the tax shelter account I could garner.

I’m going to start Ella’s Roth IRAs because she’s being hired by my website. But once I maxed out all the tax-shelter tax-efficient accounts, all the Roth that I can do, anything that is efficient in the tax perspective, I would probably start a taxable brokerage account. And so, I would just be saving in there, in addition to what I’m already doing, and then I would basically get to the point and say, “Hey, yeah, I might have $50,000 of credit card debt right now at 0 percent interest rate, but if tomorrow I wake up feeling like paying it off, I’m going to do it.”

My answer is it’s possible if things are going to be as sweet as it is right now in terms of interest rates, all the rewards and everything, I never really honestly see a point of paying off my credit card. But having the ability of saying if I want to, I can it’s a good spot to be in.

Josh Mettle: So again, you’re just elongating the carry trade.

Amanda Liu: Uh-huh.

Josh Mettle: You’re saying, “I’ve got 0 to 1.7 percent – sorry, negative costs to 1.7 percent.”

Amanda Liu: Uh-huh.

Josh Mettle: Because there’s all these rewards that get baked into some of these zero interest rate deals.

Amanda Liu: Yeah.

Josh Mettle: And I’m going to leverage those loans for as long as I can, so I can free up as much money as possible to take the most tax-efficient investment structure that I know going back over 30 years, S&P returns about 8 percent. So I’m going to move 1.7 percent debt to 8 percent positive and I’m going to ride that wave for as long as humanly possible knowing that some day if there’s a reckoning, then I can just pull off those assets that have been growing at 8 percent and pay off the debt and I’m still way ahead.

Amanda Liu: Yes. And, Josh, I’ve never shared this publicly yet. I do want to share with you and your podcast listener about how I truly, truly get negative interest money.

Josh Mettle: Yes!

Amanda Liu: Yeah, and the thing is I’ve taken advantage of it so much I got blocked, so I can’t do it anymore, so I hope other people can.

Josh Mettle: Great! Tell us!

Amanda Liu: Last year I made $3,000 of tax-free money by moving money around and it costs me probably an hour and a half of my time. What I did is if you go online and you just search in general and look for banks that allow you to open checking accounts with funding from credit cards. What I did is with my Bank of America credit card Visacard, it gives me 1 percent cash back and whenever I deposit that cash back into my Bank of America checking, they give me additional 10 percent, so effectively 1.1 percent, not a whole lot, right? However, all I do is I go to Citibank online, open a checking account in about 5 minutes and fund my new checking account with $50,000 of my Bank of America credit card, and then once the money gets to Citibank, I just pay my Bank of America right back. In one turnover like this within about 14 days max, I made $550 tax-free because technically by law, it’s associated with purchases.

Josh Mettle: You just paid for Mini Money Wise’s art studio like in one and a half hours of work in transferring balances.

Amanda Liu: That’s just actually 30 minutes, but I do it multiple times. That’s how I got $3,000.

Josh Mettle: That’s incredible. I mean you’ve really reverse engineered the system. I love it. I think it’s great. Amanda, I know that’s been a really fun interview when we are past time and I have like five questions left for you.

Amanda Liu: Okay.

Josh Mettle: First of all, thank you, but I want to before we go, I got to get one of these last couple in.

Amanda Liu: Uh-huh.

Josh Mettle: Because this is a subject that is near and dear to my heart. You wrote about severe aversion to the mortgage industry ‑ you’re a wise woman – and how you felt lied to and talked down to 99 percent of the time, so just tell us a little bit in broad strokes what your experience with the industry was and then maybe some advice, generally speaking to listeners on how to reverse engineer that. So that doesn’t happened to them and they have a positive experience.

Amanda Liu: Okay. Okay, I will start with, you know doctors, a lot of patients talk about, “Hey, this doctor has no bedside manner,” right?

Josh Mettle: Yeah.

Amanda Liu: We all expect the doctor to be humane and supportive and kind, but I tell you a lot of bankers have no bedside manners either.

Josh Mettle: I believe that’s true.

Amanda Liu: No empathy, so what happened with me is honestly I don’t know much about mortgage when I was getting ready to buy a house as a fourth-year medical student. All I know is I got a contract. I can get a doctor’s loan. I’m not going to mention any names, but this person was great. He has so much knowledge. He’s vice-president of the bank. There is a giant asymmetry in terms of knowledge between him and me, and he wasn’t very relatable, and I have millions and millions of questions because I’m a numbers person, and I like to run it for myself, I like to see it. I like to know all the variables. I shoot him like a gazillion questions and he never answer them. I ended up kind of groping in the dark and crunching number on my own, and it was so exhausting. Again, he’s a great person but I wasn’t getting any help. It didn’t feel like a partnership, the kind of partnership that I have with my patient. It’s not that.

I remember the funniest thing was he said. When I got my loan, he’s like, “You are the hardest working borrower I have ever met.”

In fact, I’m one. I said, “If you were anywhere meeting me halfway, I wouldn’t have to work so hard.”

Josh Mettle: Totally.

Amanda Liu: Yeah, so that was my first experience, but there were multiple other ones that made me not too happy with mortgage bankers.

Josh Mettle: You know I don’t talk about what I do really in these podcasts, but I am a mortgage banker, and I got into mortgage banking because I got burned. My mom and I own rental units. We own about 100 investment properties and we’ve been at that for over 15 years now. It’s been a ton of fun, and our very first commercial transaction we’re buying an eightplex and we were so excited. We would finally made it to the big time, no more little $50,000 condos. We were going to buy a commercial apartment building.

Amanda Liu: Wow!

Josh Mettle: Yeah, it was big – it was really a big moment for us. I remember the realtor referred us to their own loan officer, and she was reported to be the crème de la crème. She was the top apartment financier in all of Salt Lake City, Utah, and we had to use her.

And so, we went through the process and you know financialoscopy, with all of the documents that you have to send 17 times because they don’t seem to save them. They just delete them until they really need them. And then, once we got to literally the day before closing, I got this call that said, “Hey! Come in and meet with me at my office.”

I thought, “This is beautiful. Of course, maybe the loan is done early.”

We go in and they say, “Well, good news and bad news. Good news, we got you the loan.”

“All right. That’s good.”

“Bad news: we didn’t get you an 80 percent loan. We got you a 70 percent loan, so you need to come in with another 10 percent.”

Amanda Liu: Oh, my gosh!

Josh Mettle: That was like $43,000 more than we had to come in, $35,000 we had to come in with tomorrow. I said, “Okay, well that’s certainly a challenge but we’ll try and work through that.”

Then they said, “And we didn’t get you that 5.5 percent rate but we did get you 7.25.”

Amanda Liu: Oh, my god!

Josh Mettle: If you add that up, not only do we have to come in with another $35,000 but our payment went up.

Amanda Liu: Yeah.

Josh Mettle: We had less cash flow, and of course, you’re going into a property. You don’t want to be penniless. You want to have some liquidity so that you can handle the turnover or anything else. It was literally at the end of that transaction where I thought to myself, I was in sales at a gym, of all things, and I thought, “Okay, if this woman is the best of the best in this industry, there is a place for Josh. I mean there is really some opportunity here.” That’s kind of have been our ‑

Amanda Liu: Wow!

Josh Mettle: Our mission is to try and bring some transparency and some honesty into that arena. But tell me if you had some advice for our listeners, what are the questions to be asked or how do I know when I’m on the phone or in communication with a loan officer, a mortgage person, what indicators tell you the good from the bad? How do I know?

Amanda Liu: You know my experience with either someone most of the time it’s lack of transparency. It’s a big issue and the other time is when maybe a company will have a very, very good banker like a very kind one but not the numbers don’t match like the numbers might not be the best deal. Then there will be like a jerk, total jerk banker who offers a slightly better deal, and I have to go with the numbers, but I think people should trust their gut. When they talk to people, talk to the bankers, potential bankers, I think most of the time we can tell if someone is genuinely caring or someone just treats you like numbers.

I’d say from my conversation with you, I would say people start with Josh for their mortgage needs. But yeah I think maybe start with a 15-minute interview with the banker, talk to them and ask them what is, why did they get into banking, what is their drive. I think from there, because I feel like with anything from financial, it’s really easy to get caught in the details and the numbers and have the trees and lost the forest. But I feel like if you work with a person of integrity, kindness, empathy, no matter – the details are just details.

One day when I can afford to really let go of 0.25 percent on a $300,000 loan, then I would take the person that I trust and the person that is esteemed. I don’t care that I’ll play a little more, right? So I’d say people should start with ‑ potential house buyers should start with interviewing. If the banker wouldn’t even give you the time 15 minutes to talk to you, then that sort of – you know right away. But if you can interview them and kind of get a sense, a gestalt of who they are beyond banking, then I think that’s a good start.

Josh Mettle: I think you nailed it, so I wrote a book called Why Physician Home Loans Fail.

Amanda Liu: Yeah.

Josh Mettle: And how to successfully navigate the home buying process and have a seamless experience. The reason, the genesis for that whole book was because I was getting person after person after person calling me and saying, “Oh, my gosh! I’m under contract on this house. I’m 3 weeks in, and I just got told by the underwriter I was declined.” Nightmare scenarios like you mentioned in your first three experiences and so I created this checklist, these six steps to a flawless home purchase that is the last chapter in my book, and I say, look, if you will just follow these six steps, you have like a 99 percent chance of having success. You know Halley’s Comet could hit but you’ve really eliminated a lot of those issues.

Amanda Liu: That’s nice.

Josh Mettle: And the number one thing, the number one thing is choose a mortgage professional who can educate and truly guide you. When I go into that, I say start with a 15-minute compatibility interview.

Amanda Liu: Wow! Great.

Josh Mettle: Just a feeling for them and say, “Tell me about your mortgage. Tell me about your products. What are the differences between them, tell me why one product would compare to another one, what are the total costs, and if you can’t have that kind of a communication where they change hats from being the salesman, “I have really good rates,” to the teacher, “Here’s why this program might be advantageous for you if you’re going to be in the home for 5 years, and here’s why this program might be advantageous for you if you’re going to be in the home for 10 years, and here’s the total cost for those two loans compared to one another. Here’s all the data points, so you can make a decision.”

If they don’t have some capacity to become a teacher in the transaction, then I think you know their hearts in the wrong place.

Amanda Liu: Wow! Wow, that’s a great point, yeah. If they’re not human behind all those sales talk.

Josh Mettle: Yes.

Amanda Liu: Then don’t work with them.

Josh Mettle: That’s it. That’s exactly it.

Amanda Liu: Yeah.

Josh Mettle: I will send you a copy of the eBook and if you want to use any of those in terms of just the tips for educating your blog audience, I’d be happy to share that with you.

Amanda Liu: That’s wonderful. Thank you so much.

Josh Mettle: Yeah. Well, Amanda, we are way over time and I have really appreciated your generosity and your sharing and your bravery to overcome your fears, and your daughter is an inspiration there. I just love your stories. I know that our readers are going to want to follow up with you, so is the best place for them to find you, there on your blog or is there any other way to contact you?

Amanda Liu: I think blog is the best and then with the blog, it’s D-R- Wise Money dot com, DrWiseMoney.com. I usually respond to the comments within about 24 hours and it’s nice when someone comments there so all the other readers could benefit from the same question and answers.

Josh Mettle: Beautiful. Well again thank you so very much. It’s been a pleasure, and Amanda, we look forward to connecting with you again soon.

Amanda Liu: Thank you, Josh. It’s an honor to be on your podcast.