Q. I had an idea for an article you might consider writing in the future. Many of your readers are likely optometrists, nurse practitioners, pharmacists, etc. where the salary might be about $80-140K. With a stay at home spouse or a spouse with an average job they might be earning $150-175K at maximum, all cylinders firing. Plus the debt load is really not that much different than MDs other than the compounding residency period is shorter or absent.
I'd love to read an article with tips, goals, strategies, and expectations, for the doctor that doesn't start out with—or will likely never reach—a $200K salary. Or when both spouses already work but still don't pull in that kind of money, yet have child care, student loans, mortgage, etc. to pay for.
A. I write for people with a wide variety of incomes. Some have a seven-figure income. Others a low six-figure income. There are a few readers who make even less and like to heckle me for not writing anything specifically for them. I generally refer those folks to the internet where surely there is a financial blogger writing with them in mind. My target audience is high-income professionals including folks like ODs, NPs, and pharmacists.
I've written similar posts in the past for folks with lower incomes including these:
- Financial Advice for Low-Income Doctors
- Low-Income Doctor in a High Cost of Living Area
- Top 16 Reasons It Sucks to Have a Low Income
Most of the stuff written in those posts is going to apply to this situation. But let's see if we can come up with something new and interesting to write and read today.
Even on a Lower Income, You Don't Get a Pass on Math
The first point worth making here is simply that you don't get a pass on math. Whatever your income is and whatever your debt is, that's what you have to work with. There's no magic answer here. Nobody cares that you've dedicated your life to the healing of the sick and injured. You've got to make the numbers work.
Just like it doesn't make sense for a physician to borrow $800K for medical school, it doesn't make sense for a nurse practitioner or an optometrist to borrow $400K. If you've done that, you're up a nasty creek without a paddle and are going to need some extreme solutions like Public Service Loan Forgiveness, perhaps even one of the IDR forgiveness programs, and maybe living like a student for a very long time.
I'm sorry to be the bearer of this news, but the truth is you made this decision when you decided to borrow that much to pay for a degree that pays that little. The good news is all three of the degrees mentioned above probably have a better income-to-debt ratio than veterinarians or attorneys!
With a lower income or a lower income-to-debt ratio, your road is simply going to be longer and harder. Instead of becoming financially independent in 20 years, it may take 25. But the principles are all the same.
Don't Overestimate the Difficulty of Doubling Your Income
Here's another issue people struggle with. I had this discussion with one of my PAs the other day. In my experience, people routinely overestimate the difficulty of doubling their income. The lower your income, the easier it is to double it. If you lose a $400K job, it can be pretty tricky to find another job that pays as much. But if you lose a $30K job? You can go deliver pizzas and make that. If you're struggling due to a relatively low income, you probably spend too much money like most of us, but you also may simply need to boost income.
Change jobs, ask for a raise, work overtime, start a side hustle, go into business for yourself, get a second job, send a spouse to work, find an investment you can add value to (websites, real estate, etc.), marry someone with a great job or whatever. Lots of options. My PA was convinced it was impossible for her family to double its income. I disagree. Lots of people say it can't be done. Those of us who have done it (multiple times for some of us) just smile and nod. Yes, there may be sacrifice involved, but nobody said it was going to be easy.
Less Debt and an Earlier Start Help
Here's the other thing. Yes, PAs and NPs get paid less than docs. But they also start getting paychecks a lot sooner. PA school is two years. Med school is four. That's two more years of not getting paid. But wait, there's more. A physician makes something similar to minimum wage for another 3-7 years. So that's a delay in earnings of at least 5 years. The typical physician or dentist also has twice as much debt. Yes, I know SOME non-physicians rack up that much debt, but on average, they have less.
Let's look at the classic example that shows up in lots of personal finance books. Let's imagine you invest $10K a year for 10 years at 10%, then let it ride for another 20 years. Then, let's consider someone who waits 10 years to start investing and invests $10K a year for the last 20 years.
- Contributes for first 10 years then never again: =FV(10%,20,0,-FV(10%,10,-10000,0,1),1) = $1.18M
- Doesn't contribute for first 10 years, then contributes for last 20: =FV(10%,20,-10000,0,1) = $630K
Despite contributing twice as much, the late contributor ends up with half as much money. An early start matters. In addition, a lower earner can typically shelter more of their savings in tax-protected retirement accounts.
Solve Child Care and Spending Problems

Who wouldn't want to stay home and care for this kid? She's got TWO stay-at-home parents! (Okay, to be fair both are mostly working from home.)
I also find it interesting to see somebody bring up one of their expenses as if that's the entire issue. Sometimes it's health insurance (especially with early retirees). Sometimes it's child care. Sometimes it's rent or a mortgage payment.
But money is fungible. You can buy health insurance by not buying something else. You can buy child care by not buying something else. Need child care? Drive a beater and live in a dumpy house in a dumpy neighborhood.
I mean, you're making $150K/year here, 2 1/2 to 3 times the average American household. Go find some of those people, figure out what they're doing to make ends meet, and copy them. It'll likely involve fewer vacations, avoiding debt, eating out less, buying cheaper groceries, putting the kids in fewer activities, and driving a dumpier car.
Now, one thing that IS unique about child care occurs with a two-earner family. You have to really evaluate what that lower earner is being paid AFTER paying for child care, taxes, maybe tithing, work-related expenses, and the additional money you can save by having someone economizing at home. Lots of people aren't interested in working when they realize they're doing it for $2 an hour. Great, be a stay at home parent. Child care issue solved.
There are other ways to solve the child care issue too. Move closer to family. Find a neighbor. Move your mother-in-law to your place. Don't have kids. Lots of options. None of them easy, but paying off your debt, doubling your income, and getting rich aren't easy either.
Own a Business
Another dilemma faced by these lower-earning professionals is they're almost always employees. An employee, by definition, is never paid what they're worth. If I'm an employer and hiring you increases my income by $100K, there's no sense in paying you $100K. There would be nothing left for profit and no sense in me going to all that effort. I have to pay you less than you can generate, so I pay you $80K and keep the $20K profit. It must be so, at least in the long-run, if the business is to survive.
If you want that other $20K, you need to own stuff. There are PAs and NPs who own clinics. There are ODs who own their own office. There are pharmacists who own their pharmacy. Sometimes you own a business that has nothing to do with your main profession such as a website or real estate. But as a general rule, those with high incomes and high net worths own stuff. Try to own businesses when possible. When the business does well, you get to keep all the profit.
Don't Live like a Physician
This may seem obvious, but if you're a PA making $100K, you can't live like a physician making $200K. A pre-partner physician can't live like the partners. Anyone with student loans can't live like someone that doesn't have them. Anyone who wants to actually become financially independent can't spend as much as someone who isn't saving for retirement. You don't get a pass on math.
What do you think? What financial tips do you have for the PAs, NPs, ODs, and pharmacists out there? How did you build wealth despite a lower income? Comment below!
That last point is key. Live within reason, and within your goals.
Unfortunately, people usually do this backwards. They decide on the house, cars, and schooling for children before they ever consider their financial goals and expect there to be enough left over that it will magically work out.
This is why I am a proponent of backwards budgeting where you make sure that the financial goals are taken care of first, and then spend whatever is left. If done this way, there is always enough left over (assuming your goals are reasonable).
Thanks for the good reminder!
TPP
Tough love but it has to be said!
I completely agree with your argument that there is no pass on math.
Living within your means is the key. For reasons you have explained ad nauseam physicians should save 20% towards retirement rather then the more traditional recommendation of 10-15%. However if you can start saving in your twenties and you are not paying quite so much in taxes you can get away with the lower targets. However you still need to actually do it!
A family making 6 figures is never more then 15 years from financial independence. It might be hard but it is possible.
So I’ll chime in only because my past and current income falls within the salary range you are referring to. Granted my husband is an MD and now he makes far more than I do, but we married a bit later in life so I had a lot of time to figure out how to make it work and still build wealth long before we married. It’s obvious that you can’t be spending on big ticket items, but the most straightforward way to save at that income level is to make sure your recurring expenses are as low as possible. Live in a modest neighborhood where the average income is less than what you are earning. Try to aim for mortgage/property tax or rent that is no more than 10-12% of your gross earnings. I did this for years and although I couldn’t afford to max out every year living as frugally as I could, I still managed to save a healthy amount in retirement/investments before we married. Child care is always tough but if either of you can flex your work schedules such that one starts work early and leaves early while the other starts work later and leaves later, that can help a bit. To be fair, I’m not sure how you could swing all of this in a super HCOL area, but I did it in the NE so it’s still possible.
Thank you! My wife is an NP and since I’m the one who “handles the money” I often worry about what happens to her if my next deployment becomes a “terminal position” for me. A link to this article is going in the “Money Advice” document right next to your series on financial impact of losing a spouse.
Another point worth mentioning is that if you start working at 25 making 2X median household income and do that for 25 years, you’ll have a proportionally relatively higher Social Security benefit at age 67 or 70 than someone who starts working at age 30 and earns 4X median income for 20 years. If you’ve been grossing $10K/month, paying $2K/month in taxes, and saving $2K/month, then you’ve learned to live on $6K/month including the costs of working/commuting/etc. Not hard to imagine that you’ll be OK with a portfolio that kicks off $2K/month and $2K/month from social security and making do in retirement with $4K/month. Or working part-time for health insurance and $2k/month from age 50 to age 65-70.
Step #1: Remind yourself that $150,000/year is about double what the average American family earns. You can’t live large on that salary, but there’s no reason why you can’t live well!
Great topic and timely as the justification to spend thousands on a mid-level certification while not working is causing significant financial distress long term. To NPs you aren’t in medical school and despite the current trend to move through without any RN experience actually working as a nurse would provide crucial assessment skills and a decent income. Not refereeing from the cheap seats, I paid my tuition without loans and grossed approx $300,000 while going from LPN to NP. It was not easy or especially fun but the knowledge I gained and professional contacts I made were priceless. As others have said adjust your lifestyle to your income or your income to your lifestyle either way it is about the bottom line and what is of value to you. I have only minimally inflated my lifestyle and remain willing to pick up extra weekends, nights, holidays. My 2018 gross was >$275,000.
It really all is about budgeting and working to pay down debt. “Physician World” can obviously be a bubble, but lots of people do make it work with lower earnings. Even lower than low six figures, too. Its easy to be judgmental of others, but there are profound examples of frugality and self-sacrificial living that would put most of us on this website to shame. (The “having kids”-debate always frustrates me in this corner of the internet, as high earners sometimes try to shame those who don’t make as much for wanting to start a family–an issue also facing resident families, too!).
Yes, many people do spend their way into oblivion and only look at what a monthly payment will cost. But I recall the examples of several relatives and friends who have maxed out salaries at around $100-150k. They will retire comfortably and have even paid for college for all children. A lot of it is common sense. “Pay yourself” first with at least 20% to retirement. Buy an economical house and stay in it. Invest in your marriage. Buy used cars. Send kids to state school or one that offers generous scholarships. Don’t take expensive vacations. Set long term goals and percentages for your budget and stick with them.
This is also a good topic to address for the higher income professionals who might to scale back to spend more time with kids, having time for side hustles, or just to avoid burnout.
Going from $300k to $150k in income is perhaps trickier than just starting at the $150k, though. The problem is that the lifestyle, in most cases, has already risen to the level of the full income. As I’m finding in my own journey, it’s hard to cut out expenditures. Things have a sneaky way of seeming essential when you’ve had them for a while.
— TDD
Agree that debt can be the killer.
When I finished training we got a house we could easily afford in a nice neighborhood. It was “nice” in the sense that it was clean, quiet and safe. It was not at all “nice” in the sense of fancy doctor homes. For the whole time we were there, I don’t think there was another physician in the neighborhood. The only other relatively high income professional was a long haul airline pilot.
All the other neighbors were school teachers, firefighters, trades people. The people were nice. The houses, including ours, were modest but nice. People did not take fancy vacations, dine at expensive restaurants, collect art, wear pricey jewelry or designer clothes. Yet, somehow, they managed to live full lives, raise families and be good neighbors. We lived like them and saved a lot of money.
I can say that as a resident, living in nyc on a $50k salary, paying more than 50% in housing costs, I still managed to save $5000 towards a Roth. I just didn’t eat out much, walked a lot and took one inexpensive vacation yearly. So, I definitely think it can be done. I also have friend who worked tons of moonlighting shifts in order to pay off loans, save for vacations and live in more expensive housing. They weren’t available to go out very much but they did reach their financial goals!
Very doable. I don’t have an MD, but, have a PhD. I started working in 2000 with an income bit shy of 80K. Over the last 19 years, the salary has gone up gradually to about 200K; we’ve raised two kids and lived just with half of the take home pay and invested the rest in index funds. That has resulted in a pretty nice nest egg that’ll very conservatively make more than my starting salary in 2000!! Not having any student loans helped, unlike many on WCI, though.
The last point is an interesting one – I’ve seen NPs and PAs carrying the latest (trendy) expensive handbags and some dressed to the nines, but perhaps that’s their only extravagance. OTOH, if they also happen to lease a luxury SUV and live in a neighborhood that causes their housing costs to chew up 50% of their income, that’s a problem.
People like that might want to read the book, “Stop Acting Rich” by Thomas Stanley. I believe he calls this “wealth signaling” behavior, in which people dancing on a financial tightrope attempt to mimic actual wealthy people who may truly have a generous budget for such luxuries.
I still have to laugh at calling these salaries “low” – I get it, low for the audience of this blog, but when I go to financial meetups in my area, I am most likely the highest earner in the room.
I am a pharmacist four years post-residency, I make about $140k/year from salary in Salt Lake City, a medium cost of living area. I have additionally built a pharmaceutical consulting business that grossed ~$50k last year. I have two kids and a stay at home spouse. We have built our net worth to a little over $400k in those four years and the more time has gone on, the richer I feel.
What have we done that others are probably not doing?
-We have one car and no car payment – a used Honda fit that I absolutely love.
-When I was hired for my job, I bought a house within biking distance to work and I bike year-round so that my wife can use the car during the day if needed. My loan balance on my house was a little less than 2X base salary.
-I take advantage of credit card sign up bonuses – between my wife and I we probably have 30 cards, we have way more points than we need. I estimate this activity has produced another $30k for us over this time, at an hourly rate of ~$500/hour. Vacations cost us close to nothing.
-We value free and low-cost activities and have fun doing them – biking, hiking, playing in the park, going to the library, etc.
-I have refinanced my student loan multiple times, and taken advantage of the large refinance bonuses offered through this site. Lower rates and free money.
-I max my 401k, Roth IRAs, and HSA every year, and have worked toward being able to max earlier in the year for extra time in the market.
I wanted to share this because depending on your mindset and your actions, this salary level can either feel very freeing or very limiting. Keeping perspective and taking time to evaluate and optimize your decisions will make such a huge difference on your outcomes.
I found this comment really helpful and interesting. Thanks for leaving it!
— TDD
I remember when $37K/year felt like I had money coming out of my ears. It’s all perspective.
Money Rx,
You are a very intelligent man. You followed your passion for pharmacy and became a consultant as well. It’s all about positive thinking, finding your passion, and manifesting your wealth. Kudos to you! You will always have wealth and prosperity!
Money Rx and Jim –
I am curious about starting up my own consulting effort on the side – I am a similar position to you career wise in terms of time out from training. Have either of you detailed this process for someone who is relatively “fresh” out of training?
Thanks
Can you describe what you mean by process? Not sure it’s any different for a younger person than an older one.
Who can guarantee a 10% return on investment!!?????!
No idea what you’re referring to.
“Let’s look at the classic example that shows up in lots of personal finance books. Let’s imagine you invest $10K a year for 10 years at 10%, then let it ride for another 20 years. Then, let’s consider someone who waits 10 years to start investing and invests $10K a year for the last 20 years.
Contributes for first 10 years then never again: =FV(10%,20,0,-FV(10%,10,-10000,0,1),1) = $1.18M
Doesn’t contribute for first 10 years, then contributes for last 20: =FV(10%,20,-10000,0,1) = $630K”
This hypothetical example. Investing at 10% a year is great – where should i put my 10k a year to get a 10% return?
It doesn’t look like there is any mention of a guarantee in that example, but if you need a 10% long term return your best bet is stocks and/or real estate. Good luck investing.
Michael Sourial
https://www.macrotrends.net/2526/sp-500-historical-annual-returns
S&P500