As a general rule, personal finance for doctors is not substantially different from personal finance for other professionals. Extending that, personal finance for hospitalists is very similar to personal finance for physicians in general. However, there are a few unique specialty-specific considerations worth discussing.
Relatively Low Pay
Compared to the remainder of the house of medicine, the average internist is relatively poorly paid. Naturally, an internist has all the same student loans as an orthopedic or plastic surgeon, although an internist does not have quite as much time in training for that debt to compound. This financial reality requires that an internist be far savvier about personal finance and investing than a higher paid specialist in order to overcome her debt burden and begin to build wealth. This means beginning a “Continuing Financial Education” program early in her career, managing her student loans properly (from PAYE to PSLF to loan refinancing options,) maintaining an adequate savings rate of at least 20% of gross income, and investing in a cost-effective manner.
Shift Work Is Painful
Hospitalists are generally better paid than the average internist, for very good reasons. Not only are patients sicker, but the work is unpredictable, and the hours are long. Most importantly, and similar to emergency physicians, the rotating shifts take a serious toll.
Read the rest of the post here, then come back and tell me what you think? Is personal finance more or less important for lower-paid specialists? Is shift work really that painful? How aggressive should a hospitalist be in negotiating their salary and benefits? Comment below!
If you think hospitalists are poorly paid, what would you say of general pediatricians? Regardless, any doctor in America, regardless of how much he/she is paid, can get ahead and retire a millionaire….if only they manage their finances well. Being a hospitalist or any other specialty for that matter does not make you different whether you make so much more or so much less.
I agree! Thus the conclusion of the article:
Hospitalists may not make as much as orthopedists, but if finances are properly managed, there is still plenty of money there to become financially independent at a relatively young age.
Modern Pediatricians seem to work 9-5. No issues with shift work and they have great longevity. Totally different IMHO!
I agree with that…probably explains why they earn much less. But my point is that even the least earning pediatrician can achieve financial independence early and have the option of retiring if they so choose. How much more hospitalists who earn even much more than pediatricians. It’s all about your choices early on in your career
As a hospitalist wanted to say thanks for posting. Even though the pay is low relative to many other physicians it’s still a good salary. You can still make some financial mistakes and come out ahead just not as many as your cardiology or orthopedics colleagues. You just have to realize unless you’re married to another higher earner you are much closer to 2 nurse couple or a pharmacist am
I am about the same age as you and doing okay (all student loan debt paid off, put 20% down on a 15 year mortgage) I am somewhat jealous of your new boat but that is what an extra 100,000 a year gets you. ER does a lot more night call than the typical hospitalist so you’ve earned it. I just need to be aware that I can have those toys someday but 5-10 years later then if I picked a high pay path.
The website bought the boat. I couldn’t have saved up enough to buy it and reach my financial goals on just a doctor’s salary. But you’re right that a higher income allows you to do more if you can keep your basic level of spending the same.
WCI,
Love your site. I just read your hospitalist article and had a question concerning something you brought up. I’m currently looking to leave my employed position. If I end up employed again, somewhere else, can I do some side work as an independent contractor, set up a solo 401(k), and dump all of my current 401k/403b funds into the solo account thereby leaving me free to continue contributing to my back-door Roth? The first paragraph under the “Job Insecurity” headline seems to suggest that one can do this.
Yes, that’s right.
WCI, could you explain this part more, “Physicians who wish to do backdoor Roth IRAs each year (and most hospitalists should) cannot simply rollover their old 401(k)s into a traditional IRA. They need to either move the money into a new employer plan, or have an individual 401(k). Thus, a hospitalist should secure some 1099 income (independent contractors are paid on a 1099 rather than a W-2) and open an individual 401(k) as early in her career as possible, if for no other reason than to accept future employer 401(k) rollovers.” Why is it more beneficial to roll over into an individual 401K versus into a new employer plan?
All he is saying is avoid converting 401 into roll over IRA. This way he can’t do Roth conversions worries with out pro rata.
Better investments options and lower fees, usually. Take a look at your new employer’s plan and if it isn’t bad, you can just use it.
Timely post for me! I’m looking at hospitalist jobs as we speak. I have an offer to be a W-2 employee for a large healthcare group, and an almost-offer to be a 1099 for a private group. The W-2 offer is at a very nice hospital, 5 minutes drive for me (maybe even bikeable!), totally decent salary, but meh benefits/retirement plans. The 1099 is further away, potential for significantly higher (or lower) pay, but they don’t have an i401K, just a SEP-IRA, and no tail coverage.
Decisions decisions…
Sorry if this is a silly question, but are individual 401Ks for each person, or for the group as a whole? If I join a private group, for instance, could I obtain an individual 401K for myself, while the rest of the group keep using SEP-IRAs, or would the whole group have to convert to individual 401Ks as well? I could then keep the individual 401K even when I switch jobs?
If you’re a 1099, you don’t use their retirement plan. An individual 401(k) is for a self-employed person, not an employee.
There a few unique financial benefits of being a hospitalist this post neglects. The importance of continuity of care in IM means the shifts are a lot more clustered together than EM. My brother flies out to a remote hospital and stays in a hotel 10 days a month. He is able to make a rural salary and live where he wants. The clustering of shifts also makes moonlighting and starting a side business uniquely manageable.
Enjoying life as a hospitalist takes a certain type of personality. But if you are the type to do well with unstructured time, it can be a good fit.
Spot on Matt!
Too many Hospitalists fail to leverage the one asset they gain by joining this field – blocks of time off!
See also my comment below re: why being 1.0 FTE is not ideal.
-JustSayin
Just thought I’d share we’ve done HOSP employment contracts for $120k on the low end and for $325k (salary) on the high end. We’ve seen total annual earnings close to $500k in certain areas with production/quality/misc bonuses.
WCI, I just wanted to get this straight: One can be employed, but do 1099 work on the side, open up a solo 401k, then rollover one’s already existing 401k/403b ( gotten from present and former employed positions) into that solo 401k, thereby not have to worry about pro-rata provisions of doing yearly back-door conversions? If this is true, is there some kind of minimum that one would have had to contribute to the solo 401 (e.g. can one contribute $5000.00 to the solo 401 from the 1099 job, then rollover $300,000 from existing 401k/403b)? Thanks in advance for the clarification.
No minimum that I know of. Your existing 401(k) may not allow in-service withdrawals/rollovers, but certainly you can do it with a rollover IRA or old 401(k).
Saw this article in NYT about a physician who planned to spend $42k to clean a carpet (that he purchased back in the day for $38k. In any case court got involved and he ended up paying out $20k.
http://www.nytimes.com/2015/10/25/your-money/crying-foul-on-a-42000-carpet-cleaning.html?_r=0
This is when I feel how much there is still to learn for us physicians. Talk about lacking any sense of budgeting or control on spending or careful approach to spending money (i.e. getting various quotes on a job).
Hmmm, I wonder if this Dr Dinasarapu with his new blog is none other than the infamous NormalBP…ahem
WCI – decent post about Hospitalists.
May I mention this seldom used, but lucrative tip:
Negotiate some fraction FTE (Full Time Equivalent) under 1.0. Don’t become a Full Time Staff member.
Then pick up shifts at your institution as a moonlighter.
Why this works; most institutions pay higher hourly rates for moonlighing then for staff salaries. Its like giving yourself a raise! And when your group is short staffed, they praise you for helping out.
Win-Win!
Happy to share some other tips if you like
-JustSayin
Only problem with that is you lose out on full time benefits which likely more than make up for hourly differences. My hospital has great benefits.
Danny- most academic hospitals give benefits (and I mean Full benefits) to those above a certain FTE threshold. In my case its 0.25 or 25% FTE, which I admit is low and is meant at academic institutions to allow staff time to pursue other areas of expertise/research. Though its not unheard of to have full benefits at 0.5 FTE – 50% time.
The Hospitalist job is ideal for those wanting time and flexibility.
-JustSayin
Justsayin…you’re spot on with your comment regarding doing moonlighting for your group while being employed as a less than 1.0 FTE. In my group I’ve discovered the same phenomenon. I can work as little as 0.5 FTE and still get full benefits. The admitting shifts available for moonlighting are generally alot easier than the typical rounding days so it makes the work load seem so much better and for more pay.