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Planning around peak income

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  • Avatar gvs.psych 
    Participant
    Status: Resident
    Posts: 34
    Joined: 12/01/2016

    I have a job that for two distinct reasons pays well and meets my needs, but at 31, I feel pretty sure that I am at ‘peak’ income. Specifically:

    1) We have an RVU model and I like to work hard and feel energetic at the moment. But the model has changed many times over the years, could change again, and is unlikely to ever be more favorable.

    2) We have really great inhouse moonlighting opportunities that let you ‘double dip’ on weekends and hold responsibility for more than one service.

    As a psychiatrist I’m making about 400k a year which is good for an employed position. But there really doesn’t seem to be anywhere to go but down – I don’t want to always work this hard, the more leadership/teaching I do the fewer RVU’s Ill make, and I don’t want to always moonlight so often. As someone who is ambitious I must say its a little demotivating when I hear about people in other specialities that are able to access higher incomes once they put in their time, obtain equity, etc. Whereas in psychiatry the best paid thing is direct patient care and its hard to innovate around that.

    My current plan is to just keeping firing on all cylinders and get to $2m net worth by 40, and then slowly pull back. But perhaps I’m just not exposed to enough ideas to be thinking about ways that an upfront effort now could lead to more income in the future (aside from the obvious strategy of investing or getting into property, the latter of which I don’t really want to do as I am in the military and don’t want to be mobilized when shit falls apart at a property). If I keep working hard and do a good job there is scope for things like SVP jobs at hospitals but I’m not sure if these even represent a significant pay bump.

    #195925 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 1609
    Joined: 01/03/2017
    SVP jobs at hospitals

    Click to expand…

    Senior Vice President?

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #195930 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2186
    Joined: 05/07/2017

    what things would keep you from 2m in 9 years?  at 400k, that seems a very reachable goal?

    what do you anticipate your financial needs to be?  do you need to make more than 400k?  that’s a lot of money, congrats!

    it seems if you need a higher net worth to feel comfortable, and you can’t make more, you need to consider working a little longer at max capacity than just 40?

    good luck

    #195932 Reply
    Liked by Tim
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 944
    Joined: 02/15/2016

    Perhaps leading a more frugal lifestyle and cutting back will lead to a happier life?

    #195934 Reply
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 292
    Joined: 06/18/2018

    “Employed position…ambitious…thinking about ways that an upfront effort now could lead to more income in the future.”

    How about starting your own practice? That’s ambitious and the upfront effort could lead to more income.

    #195936 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 317
    Joined: 02/11/2019

    Make hay while the sun shines.

    But if you anticipate lower salary in the future make sure you do not inflate your lifestyle.

    That is a big problems for may physicians who quickly hit there peak salary and match the lifestyle too it.  Any turbulence can be a problem.

    A lot of other professions do not hit peak for a couple of decades.  Giving you a better chance to fix mistakes if you screw up early.

    However I would rather be in our shoes and just not screw up early 😛

    “Never let your sense of morals prevent you from doing what is right.”

    #195937 Reply
    FunkDoc83 FunkDoc83 
    Participant
    Status: Physician
    Posts: 128
    Joined: 04/12/2018
    Disability Insurance

    I like your plan so far.  You don’t mention whether you have a family and kids, but if those things are part of your life now or in the future, you may find your time away from work becomes more valuable than the money.  I’m certainly noticing that in my practice at this point, but I’m a few years ahead of you.  Also, I think we overestimate our ability to continue to work as hard as we do when we first get out of residency.  I know for me, that will not be sustainable and burnout will happen.  Like jhwkr542 mentioned, maybe cutting back on how much you need to save by reducing spending will allow you to work less and avoid burnout.  On a side note, I don’t know much about psych, but I would imagine there is a great need for it within the military.  I spent a month rotating at a VA hospital as a student and no one seemed to improve the entire month I was there.  Talk about depressing, but I guess I needed more instant gratification.

    #195940 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1316
    Joined: 01/08/2016

    Not sure if you have a question in there.

    I’m also jealous of folks who own their own surgical centers.  If I were more motivated, I would start a free standing ER, as an investor, not as another place to work; that is the rub, eh?  Anyway, as ZZZ suggests, you could open a private practice and leverage your experience (i.e. take no insurance and charge very high rates).

    Not sure what kind of hours you work, but if it is similar to our inpatient psychiatry, I am also jealous of your income.  Especially for never touching a patient.

    Grass is always greener and all that.

    FWIW, me and my partners have been worrying about “peak income” ever since I joined, 15 years ago.  The sky will fall someday, but so far the best option for Chicken Little has been to keep plugging away.

    For me, when I hit FI, the income portion started being less important than other intangibles (being in bed at a reasonable hour, being available to go to my kid’s art show, etc).

    Good luck!

     

    #195968 Reply
    Liked by Zaphod, Tim, q-school
    Avatar hightower 
    Participant
    Status: Physician
    Posts: 1303
    Joined: 12/07/2016

    I don’t think you’re as alone as you feel.  Most physicians are in employed positions these days it seems, so they will face similar dilemmas to the one you describe.  As a hospitalist, that’s absolutely true.  You get paid more for working more or seeing more patients and that’s about it.  If you want to cut back, you lose income, no way around it.  We’re already at a point where we’re being forced to see a lot more patients per day than we used to just 8-10 years ago.  Salary has gone up in that time as well, but it’s purely because of the increased volume IMO.  It can’t go any higher now because no one can handle higher volumes (safely).

    I see a lot of docs in my group trying to diversify themselves by leading committees and such in hopes of getting into admin positions, but I don’t think there’s enough of that to go around, so the vast majority of people in hospitalist medicine will still be seeing patients if they want to make what they make now.  Even then, income will probably decline over time IMO.

    Agree with what’s been said about working hard while you can, saving aggressively, and not inflating your lifestyle.

    #195972 Reply
    Liked by Tim, Lordosis
    CM CM 
    Participant
    Status: Physician
    Posts: 941
    Joined: 01/14/2017

    There was a post on this forum in the past by a psychiatrist who made about $1M per year. As I recall, he/she did it by double- and triple-dipping; i.e., covering several responsibilities at once, all of them light enough to allow such a thing. However, I don’t remember the details.

    You’re obviously a slacker. 🙂

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #195983 Reply
    Liked by Docbeans, Zaphod
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4074
    Joined: 05/13/2011

    I have a job that for two distinct reasons pays well and meets my needs, but at 31, I feel pretty sure that I am at ‘peak’ income. Specifically:

    1) We have an RVU model and I like to work hard and feel energetic at the moment. But the model has changed many times over the years, could change again, and is unlikely to ever be more favorable.

    2) We have really great inhouse moonlighting opportunities that let you ‘double dip’ on weekends and hold responsibility for more than one service.

    As a psychiatrist I’m making about 400k a year which is good for an employed position. But there really doesn’t seem to be anywhere to go but down – I don’t want to always work this hard, the more leadership/teaching I do the fewer RVU’s Ill make, and I don’t want to always moonlight so often. As someone who is ambitious I must say its a little demotivating when I hear about people in other specialities that are able to access higher incomes once they put in their time, obtain equity, etc. Whereas in psychiatry the best paid thing is direct patient care and its hard to innovate around that.

    My current plan is to just keeping firing on all cylinders and get to $2m net worth by 40, and then slowly pull back. But perhaps I’m just not exposed to enough ideas to be thinking about ways that an upfront effort now could lead to more income in the future (aside from the obvious strategy of investing or getting into property, the latter of which I don’t really want to do as I am in the military and don’t want to be mobilized when shit falls apart at a property). If I keep working hard and do a good job there is scope for things like SVP jobs at hospitals but I’m not sure if these even represent a significant pay bump.

    Click to expand…

    I thought I was at Peak Income in 2012. There is no limit, but you’ll have to do things differently than you’re doing now.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #195984 Reply
    Avatar adventure 
    Participant
    Status: Spouse
    Posts: 1034
    Joined: 10/24/2016
    FWIW, me and my partners have been worrying about “peak income” ever since I joined, 15 years ago.

    Click to expand…
    I thought I was at Peak Income in 2012. There is no limit, but you’ll have to do things differently than you’re doing now.

    Click to expand…

    this is helpful for folks (at the start of ther careers) to hear…

    #196079 Reply
    Liked by jfoxcpacfp
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 905
    Joined: 01/12/2016

    I’m not convinced psych is at peak income. I think it’s only going to become more valuable and better reimbursed over time as people are finally starting to realize how important mental health is and pay is increasing accordingly. Maybe I’m just an optimist though 🙂 It sounds like you have a very doable plan regardless. You might consider academics in the future if you want to cut back. Reimbursement is actually better for supervising residents where I am, rather than seeing your own patients. It’s more responsibility but less emotionally difficult, in my opinion, and perfect for someone that is mid career.

    #196148 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2186
    Joined: 05/07/2017

    Future is hard to predict.

    it may be that in a few years you are no longer on RVU model.  while i was on either collections or RVU model, i had huge swings some years.  usually the biggest swings were when we hired a new partner and it took a  couple years for things to even out.

    if you do ultimately get changed from RVU model, your negotiation skills may be paramount in determining your future income.  a couple years ago i thought that the winds were changing so i convinced the group to switch to salary model with some incentives.  many reasons for this, but anyway group bought in and hospital bought in.  even though as a group we had one of our lowest rvu producing years, we had one of our best income years from an income to physicians perspective.  i’m super happy because it was a big risk at the time to go off rvu’s and super hard to convince the group, let alone the hospital.  hospital happy because much of the non rvu work we did was based on CMS mandates and also improved patient satisfaction.  i’ve lived through at least 3 different compensation models that i can remember in the last fifteen years.  each one was stressful.

    point is, we are paeons in the game of medicine.  by following the tenets of saving a lot, you will be well positioned to modify your career to your preference in the future.  no one knows what peak income will be.  we all have colleagues who had health issues or life issues that prevented them from working full time, sometimes beginning from a very young age.

    good luck!

     

     

     

    #196259 Reply
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2059
    Joined: 08/01/2016
    As a psychiatrist I’m making about 400k a year which is good for an employed position. But there really doesn’t seem to be anywhere to go but down – I don’t want to always work this hard, the more leadership/teaching I do the fewer RVU’s Ill make, and I don’t want to always moonlight so often. As someone who is ambitious I must say its a little demotivating when I hear about people in other specialities that are able to access higher incomes once they put in their time, obtain equity, etc. Whereas in psychiatry the best paid thing is direct patient care and its hard to innovate around that.

    Click to expand…

    For a military doc you are getting paid quite well. Other than having a stake in a ambulatory surgery or urgent care center there is no additional passive income for most physicians. Your best bet would be to invest in the stock market early and in good chunks. By the time you cut back or quit military you will have a good rise in your portfolio, a pension, low cost or nearly free health care and easier working hours. Better to peak earlier than later. Compounding.

    #196452 Reply
    Liked by Tim

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