By Dr. Tyler Scott, WCI Columnist
As I have been increasingly public with my decision to change careers from a dentist to a financial planner (a decision that was made in part by me and in part by my health), I receive an increasing number of questions that can be bundled up into one question: “Is dentistry worth it?”
Of course, “worth it” can mean a million different things to a million different people. Worth it emotionally? Worth it physically? Worth it culturally? Worth it financially?
How different people weigh these various elements is as unique as the individual. It often can’t be known until well into one’s career, and then it changes over the course of that career. The answer for me, as implied by the career change, is no, it’s not worth it. Someone else in my exact same position could just as easily feel that it is; it’s a highly subjective assessment.
The point of today's column is not to make a case for or against dentistry. Personally, I love dentistry. I am proud to be a dentist. I don’t regret my choice to pursue it. I recommend it get strong consideration as a career for those who are interested, and I revere it as a noble and honorable profession. Ultimately, I found a career better suited for my intellectual interests and physical limitations, but that should not be interpreted as a personal referendum on the profession.
The point of this column is to try to quantify dentistry’s monetary value as a career choice compared to other career choices. If we distill away the unmeasurable and subjective values of dentistry (mental, emotional, cultural, physical, etc.) and just look at some numbers, what can we learn?
In other words, I’m trying to answer the question, “Is dentistry worth it financially, compared to other careers?”
I think it’s worth mentioning that the math you will see below is not known to me yet. As I am writing this introduction, I only have the idea outlined, not completed. I don’t know what the results will say about dentistry; I suspect it’s not great news, but I’m interested to find out. Of course, by the time you read what's below, we'll have a pretty good idea of whether being a dentist or an ER doc or a plumber is worth it.
Methodology
To provide a simple means of comparison, I approached this question from the lens of an investment. If we view dental school as an investment (tuition and time) that we expect to generate future returns (wages), we can use two related mathematical/financial concepts to compare this investment to other similar investments (i.e. training in some other profession).
Those two financial concepts are Net Present Value (NPV) and Internal Rate of Return (IRR).
I will be comparing the NPV and IRR for a plumber, a certified financial planner, a mechanical engineer, a physician assistant, a dentist, a lawyer, a veterinarian, a pediatrician, an emergency medicine physician, and an orthopedic surgeon.
Without going too far into the weeds on what these terms mean, I’ll just offer this simple guide.
NPV answers the question, “What is the total amount of money I will make if I proceed with this investment, after taking into account the time value of money?”
In the simplest terms: NPV = (Today’s value of expected future cash flows; i.e. future income) – (The value of invested cash over time; i.e. cost of education in time and dollars)
IRR answers the question, “If I proceed with this investment, what would be the equivalent annual rate of return that I would receive?”
The math is done by entering expected cash flows over a period of time. For example, an 18-year-old pursuing dentistry will have negative cash flows for the first eight years as they pay undergrad and dental school tuition. Once they are done with dental school and start making money, they will start to have positive cash flows. After they are done paying off their student loans, their net cash flow increases.
Viewing the financial impact of any career through the lens of NPV and IRR is a deeply imperfect exercise, and reasonable people can disagree about the assumptions made and the implications or applications of the information.
Due to the simplifying assumptions that must be made, this analysis is not meant to be predictive or prescriptive.
What do I mean by not predictive? I am not telling you what is going to happen. I am not trying to be closest to the pin on the exact dollars and cents in this thought experiment. For example, I am not considering marginal tax rates, the future value of a building/equipment, lifestyle creep, various savings rates, spending behavior, business plan, or 100 other variables. Instead, I’m using a consistent formula and logic simply to compare the numbers to each other. The numbers are only relevant in the context of one another.
What do I mean by not prescriptive? I’m not telling you what to do. I don’t think what I’m submitting here is some kind of definitive guide to choosing a career. Rather, my hope is that an undergrad student considering dentistry will take this analysis as a portion of their decision-making rubric which should include a far greater number of factors.
More information here:
Here’s How Much We Make, Save, and Spend as ‘Moderate Earners’
How Much Money Do Doctors Make a Year? The Average Salary Is Dropping
Assumptions
To do this math, several assumptions must be made. For purposes of continuity and simplicity, I applied several assumptions. The numbers used are the result of considerable research, and they are as current and accurate as I could find. Sources included The US News and World Reports salary averages, the Medscape Physician Compensation Report, the College Board's Annual Survey of Colleges, and other reputable and current resources.
All careers except the plumber require a bachelor’s degree. This degree was obtained over four years at a public university. This degree was paid for with federal student loans. The cost of any additional or job-specific training (i.e. medical school, dental school, certificate program, etc.) was also borrowed using federal loans. These loans were paid back over a 10-year period following the completion of training with no external reductions (i.e. PSLF, NHSC, IHS, military, etc.).
- Total cost of the four-year undergraduate degree at a public school = $98,000
- Total cost for a master’s degree in mechanical engineering (two-year program) = $31,000
- Total cost of dental school = $300,000
- Total cost of medical school = $244,000
- Total cost of law school = $220,000
- Total cost of veterinary school = $300,000
- Total cost of PA school = $95,000
- Total cost to become a CFP = $8,000
- Total cost to become a plumber = $17,000
- Interest rate on the federal student loans = 7%
The annual incomes for each job are as follows. Note that the math for NPV and IRR holds the salaries in today’s dollars every year (so they are inflation-adjusted salaries but we assume no raise above inflation). For the physicians, I assumed an annual income of $55,000 during residency.:
- Plumber = $60,000
- Mechanical Engineer = $96,000
- CFP = $121,000
- PA = $124,000
- Dentist = $160,000
- Lawyer = $128,000
- Veterinarian = $100,000
- Pediatrician = $240,000
- Emergency Doc = $373,000
- Orthopedic surgeon = $557,000
Results
Using those assumptions, the Net Present Values for a hypothetical individual starting at age 18 and working until age 65 are shown below. Remember that NPV helps answer the question, “What is the total amount of money I will make if I proceed with this investment, after taking into account the time value of money?”
- Plumber = $992,000
- Mechanical Engineer = $1,212,000
- CFP = $1,554,000
- PA = $1,296,000
- Dentist = $1,231,000
- Lawyer = $1,008,000
- Veterinarian = $534,000
- Pediatrician = $1,982,000
- Emergency Doc = $3,242,000
- Orthopedic surgeon = $5,040,000
Using those assumptions, the Internal Rate of Returns for a hypothetical individual starting at age 18 and working until age 65 are shown below. Remember that IRR helps answer the question, “If I proceed with this investment, what would be the equivalent annual rate of return that I would receive?”
- Plumber = 339%
- Mechanical Engineer = 44%
- CFP = 51%
- PA = 28%
- Dentist = 18%
- Lawyer = 18%
- Veterinarian = 11%
- Pediatrician = 22%
- Emergency Doc = 26%
- Orthopedic surgeon = 31%
Again, having undergrad paid for by scholarships and/or 529s, having some third party paying for post-bac education, out-earning the averages for a profession, getting above-inflation raises, specific tax situations, or 100 other variables would impact these numbers in myriad ways. These numbers are just averages and are only valuable in that context and in the context of each other.
More information here:
16 Ways to Earn More Money as a Doctor
Will More Money Make Me Happier?
Discussion
Now that the math is done, what stands out to you?
My first thoughts were these:
- Generally speaking, the more money one makes, the higher the NPV. Having large positive cash flows in the future makes the present value of the investment more attractive. No surprise there.
- Generally speaking, the less money and time one spends obtaining education, the higher the IRR. Training costs in dollars and opportunity costs in years have a meaningful impact. No surprise there.
What is more interesting is the comparative analysis between the professions:
- The plumber has the highest IRR by a huge margin. I’m not surprised it was the highest, given the low cost of entry and the ability to start working right away (no opportunity cost). But the size of the gap between the plumber and anyone else is notable. However, the plumber has the second-lowest NPV due to the comparatively low salary. In other words, the rate of return for being a plumber is exceptional, but that rate just can’t do as much wealth-building because it is working with smaller annual values. This contrasts with the ortho doc who has an IRR of only 31%. But that 31% is working with a much larger annual income so the NPV ends up much higher than the plumber.
- The mechanical engineer, PA, and dentist all end up with very similar NPVs. However, the IRR for the engineer is almost 2.5x that of the dentist (44% vs 18%). This speaks to the profound impact of paying/borrowing $300,000 for additional education and taking four years of opportunity cost to obtain it.
- I was surprised at how rough the comparative numbers are for the lawyer and the veterinarian. The NPV for the lawyer is barely better than the plumber, and the NPV for the vet is far worse. Both have an IRR that is orders of magnitude worse than the plumber. The time and money spent obtaining these degrees to generate moderately more earnings has a tremendous impact on the “investment value” of these professions.
- Ultimately, my eyes are most drawn to my first professional love, dentistry. As I suspected and feared, dentistry is not a particularly great deal from a numerical perspective. It’s not a terrible deal by any means, and it can certainly lead to a “successful” financial life. It’s just notable to see that the PA, CFP, and mechanical engineer all end up with a similar or better NPV and all with a much better IRR.
So, what’s the point?
As I mentioned earlier, this post is meant to be neither predictive nor prescriptive. My great fear is that, by analyzing a few of these professions through the myopic lens of money, someone somewhere will take offense or feel slighted by the numbers. Please know that is absolutely not my intention. I am confident our collegial online community does not conflate a person's financial potential with their dignity, worth, or capacity for personal satisfaction, and . . . it’s still worth saying out loud.
The world needs vets, plumbers, ER docs, dentists, CFPs, and a million other jobs for our society to function. I respect, admire, and honor every profession and the dedication required to perform those duties with the integrity, consistency, and competence that benefit my life in so many ways.
The person I see in my mind’s eye as I am writing this is a high school senior thinking about their future, a college sophomore feeling excited but unsure what to do with their unbridled intellectual capacity, or a current dentist with a child who's considering following in their parent’s footsteps.
My hope with this column is that someone choosing to pursue dentistry today does so with their eyes wide open to the comparative financial value of the profession. The prevailing wisdom I absorbed at age 18 that “dentists work four days a week, retire early, and are some of the richest people in our upper-middle class neighborhood” is no longer supported by the financial realities of modern dentistry. The astronomical cost of training, the lowering of incomes brought on by changing economic conditions (a topic for a future post), and meaningful opportunity costs result in a financial picture for our dental future that looks very different than our dental past.
I guess I’m really writing as a voice from the dust to my 19-year-old self. If I had read this post as a bright-eyed coed, I may have made a different choice. Or if I made the same choice, I would have done so with more information, more intention, and with a greater awareness of why I was choosing this path.
My hope is that those who elect to enter the noble profession of dentistry do so because they are motivated by values that transcend finance. That they feel called to work in spite of, not because of, the feeling that it represents the shortest and most optimal path to a predetermined sense of “being a rich doctor.”
What do you think of this research and the results? Would you choose the same path if you had seen the NPV and IRR numbers beforehand? Despite the money you make (or maybe because of it), are you satisfied with your career choice? Comment below!
Yayy! I finally “win” something on WCI!
I graduated in Mech Eng and that degree has been opening doors for me ever since. I used it to move right into software engineering as soon as I graduated. It got me a Green Card and took me around the world.
It has brought me a good (not great) salary throughout the years. And it was nice that I started earning in my early 20s.
The average salary likely pertains to public health dentists and academics. Go ask to see your owner dentist friends tax returns and you’ll see that number is significantly off 😂. That combined with a 4 day work week, normal working hours, less liability, and unlimited income potential based on your business acumen makes it wonderful and “worth it”. I agree that dentistry isn’t worth it if you continue to make 150k a year but that’s more of a personal problem.
You’ve addressed it in your blog that these are assumptions. The incomes listed vs what people actually make are too variable for this to be of much value in drawing any significant conclusions. I have worked with all the careers listed. The two numbers that stand out the most are dentists at 168,000 and lawyers at 128,000. My clients range from business owners to partners to associates. Even the associate income is significantly higher than listed. In addition we live in a major metropolitan area with high competition. Seems like more of a personal issue if a dentist can’t make more than 168,000 and a lawyer can’t make more than 128,000.
Chris,
Thanks for reading and commenting. In writing this I anticipated observations like yours regarding the incomes listed. I agree that the variability in income is a massive variable.
A great deal of time went into researching these income numbers and while anecdotal observations such as yours are worth mentioning, the overall data is what it is. The median dental income in 2022 was between $150,000 – 200,000. Median being a key word there, not average. Average salaries get skewed when a statistical few in the field make 7 figures. This is the reality of modern dentistry and I think that is probably upsetting to both of us. Where we may disagree is that I don’t think it has much to do with the dentists’ work ethic, business sense, or clinical skill set.
There have been many downward forces on dental income over the last few years and many that are gaining steam today – the seemingly permanent drop in patient visit rates after Covid, insurance reimbursement rates, corporate dentistry growth, DSO expansion, etc.
Established dentist-owned private practices that have been operational for many years are largely insulated against many of these factors and thus many dentists in their 40s and 50s are making much more than the median number. But as we see more dental schools open, having them increase their class sizes, dropping to 3 year curriculums, etc we are seeing the a growing number of dentists in their 20s and 30s added to the data set each year. These younger dentists do not benefit from being able to own a practice now or in the short term given the oppressive nature of their student loan debt that previous generations of dentists did not encounter.
They are then pushed into FQHCs, military, IHS, academics, corporate dentistry, and low paying associateships which is how we get a median income of ~$160,000. The other factor here is that even if the salary increases to ~$250,000, the numbers are still not very favorable in the context of the other professions listed.
I am grateful your local and personal observations differ from this reality but the overall reality is not changed by those observations. My hope is that people like you and I who know and love dentistry can advocate wherever possible to mitigate some of these changing variables to allow others to enjoy dentistry in the way we know is possible.
Salary for a plumber seems low (some go on to own their own businesses). Also, the salary distribution for actual lawyers is fairly bimodal- the salary given here is more for the low end. High end is more like a partner at a big law firm ($1 million+ a year).
Dude great post man. As Stephanie was saying above there is a huge variability between these careers and very hard to really nail down a true net present value and internal rate of return. bravo in trying and it is pretty insightful.
Thanks for always reading and being so supportive.
Yeah, the variability of the inter and intra profession numbers is definitely a limitation to something this broad and brief. My hope was that by including incomes and opportunity costs across a pretty broad range that there would be enough data points to notice trends. I think that comes through but I am admittedly bias in that assessment.
As an aside, and I believe this may be relatable for you, I’m learning quickly that readers here occasionally analyze these posts as if we (the columnists) work for The Atlantic or Washington Post and have a team of researchers at our disposal and 80 hours to dedicate to each article. I feel like I need to start every post with a disclaimer, “Hey, I’m just a dad trying to sit comfortably on my couch between the cats and the Barbies for a couple of hours putting something mildly cogent together as a gentle offering for our community. For deep analytics please consult the statisticians at MIT as needed for your NASA level math concerns.”
Maybe it’s Jim’s fault for being so smart, dedicated, and uncompromisingly comprehensive all these years. Thanks Jim😜
Thanks again for always showing up with the positivity Rikki.
ha! thanks dude and yes, it’s called anchoring and very tough when the anchor is the writing of Jim Dahle!
Luckily for columnists (maybe not readers) I think Josh is about to put up more of my work in the coming weeks, in effect lowering the anchor. will make you guys look like writing Gods!
which brings me to another point. How much do you think people aspire to be dentists and no plumbers because they anchor on the annual income? For us docs I think we are impressed with plumbers because we anchor on their high annual rate, but when looking at annual income and NPV, I’m sure glad financially I’m a doc.
and away from the finance side, for me treating patients one on one in a comfy office seems much more pleasant and rewarding than unclogging dirty human waste filled water! You really can’t pay me enough to be a plumber.
Interesting analysis. I suppose it heavily depends on your expected salary during your career. I’m an orthodontist and have had a vastly different experience than you. Most of my colleagues bring home 7 figures (net, not gross), which over the span of a career will yield quite a different result than what you came to.
Either way – interesting analysis!
Is the high salary of orthodontists influenced by the model of orthodontics practiced today? When my daughter had braces, I was surprised by the practice. She went to a practice where there was one orthodontist and about 6 to 8 technicians, who seemed to do a lot of the work. There were many patients being seen at one time. At each visit, the orthodontist spent only a few minutes with my daughter. In the 1970s, I saw only the orthodontist and no technician.
Yes – an interesting idea for a blog post with significant flaws in the technique. I agree with Andrew’s post – The salary listed seems extremely low for an owner, partner, or highly skilled associate. If that’s your cap I truly believe that’s a personal issue. The main benefit of dentistry is that income potential can be unlimited and entirely dependent on business acumen and skills as a clinician. Whether or not it is “worth it” varies significantly from person to person – just like any other career. Regardless of what you pick as a career, always give it 150 percent effort and I’m sure you will succeed.
Andrew,
Yes, income is a massive variable in this math equation. By and large, dental specialists have higher compensation than general dentists and anyone netting 7 figures would have a profoundly different mathematic outcome. The statistics indicate very few dentists or dental specialists net 1+ million and thus this analysis would not be relatable to them in the slightest.
The intended audience for this piece is meant more to be “the dental masses” who will be the next generation of general dentists spending ~$500,000 on education and graduating into a dental economic market where corporate dentistry, DSOs and incomes in the upper $100k range are the rule not the exception.
Thanks for reading and commenting (and standing up for optimal occlusion everywhere).
Andrew-
Good point on the orthodontist and salary. I’m an orthodontist too- and while I don’t make 7 figures, I’m making a lot more than the median dentist. What’s important for anyone applying to dental school to really understand is to be an orthodontist it’s super selective – so regardless of your goals to specialize – if you go to dental school you have to be prepared to be a dentist when you graduate. And if you want to do more than the median- be prepared to work your butt off either to get into a selective speciality or to buy and own your own practice as soon as you can. This summary seems to make complete sense for someone who goes into it wanting a “job” and also who might need to take out so many loans for that job. And on top of all of that, it’s a hard job too!
Thanks for the insightful post Tyler!
I believe the correct term is “Physician Assistant” not “Physician’s Assistant.”
Yes. Physician Assistant! That one is a big pet peeve of mine.
I’ve seen a trend this last year to change it to Physician Associate. I think that’s a bad idea because it muddies the waters with Associate Physician, which is an unmatched medical school graduate.
Wonderful, thank you for the correction. Titles are important and I am committed to do my best to address everyone accurately and professionally. I will make this change going forward.
Interesting way of looking at it. Thanks for putting it together.
I think this all makes sense, but it raises all sorts of potential add-on analyses. I bet the numbers skew away from docs if we overlay earlier retirement ages. E.g., engineer looks comparatively better if everyone punches out at 55 (choice, disability, burnout, etc.)
Yes, good observation. If the last 10 years of income are removed from the doctors because they burned out, the numbers become must less favorable for them.
There is a mathematical case for choosing a lower paying job you can sustainably enjoy into your 60s or even 70s (working only when you want to at those later stages) over a higher paying job that may burn you out in your 50s. Of course there are many variables to consider but your broader point that burnout is expensive is worth saying out loud.
Thank you for sharing this excellent analysis. How did you arrive at the dental school cost of education? I don’t believe there’s a private school that’s less than $400k currently. Many public schools $300k. What would the outcomes be if you used $400k dental school cost?
I aggregated data from various college planning, ADA, and student loan websites and rounded to a nice whole number. Admittedly, that type of aggregated data can be a couple of years old and anecdotally, I agree with your observation that the total cost of dental training is getting harder to find for under $300,000 for many students.
The outcomes if tuition is higher than the assumed stated values are, of course, slightly worse, but not meaningfully worse (the IRR goes down 1-2%). The primary mathematical “problem” with modern dental education is that we are even discussing the affect of $300,000 or $400,000 of tuition rather than the affect of $80,000 – 100,000 (which would still be a sizable burden given the ever decreasing median compensation numbers for recent dental graduates)
Great analysis, thank you! Would be useful if you could attach the spreadsheet you used please. That way in the future it can be personalized based on anticipated education costs, salary expectations, other career options, early retirement assumptions, etc.
I appreciate the tone of this article, but I have to point out how flawed the assumptions are in case many future dentists read this article and are deterred from the profession. $160,000 is an extremely low salary for a dentist. My first year out of school I made $120,000 and did cleanings for 20% of my day, was super slow, and inexperienced. That $160,000 which may be reported as the national average includes many doctors who work 1-2 days a week, and for most others it is merely the salary they pay themselves as a w-2 employee, so they can save from FICA taxes. The rest of the income is funneled as profits from their business. Most practice owners I know would be closer to the orthopedic surgeons when you factor in the rest of the picture. The truth is, as a dentist there is truly no limit on your earning potential. As a dentist that is my 2 cents!
Scott,
Thanks for reading and taking the time to comment.
I absolutely agree that there are noteworthy variables in the dentist income data set (i.e. part time and W2 vs S corp distributions, etc). I think it’s valuable and important for you to point that out. Thank you.
The challenge with anecdotal observations in any context when we hear ideas that start with “in my experience” or “most of the people I know”, is that of course, that data set is pretty limited by definition. If you see my response to Chris in comment #3, some of these items are addressed there.
For what it’s worth, (and it should not be worth much at all because it’s just my anecdotal observations), many of the dentists I know through my personal friendships, former colleagues, associations through the dental school where I taught, and clients that I work with as their financial planner have total incomes in the $150,000 – 250,000 range.
I think these dentists are mostly “hidden” from the larger dental world. Given that they have less disposable income than their higher earning (usually older) peers, they are less likely to attend national dental conferences, present at local study clubs, act as members of organized dentistry committees, etc. But whether or not we see them or hear from them, they are out there working hard and making a lot less than their peer group is aware of.
As you mention, there is tremendous earning potential as a dentist. I don’t think that is news for most people considering dentistry as a career. What I do think may be new knowledge for a 19 year old considering dentistry is how often the lived reality is far less lucrative than they expected it to be.
My hope is that anyone considering dentistry takes the totality of the statistically relevant facts and possibilities into account when making the decision to pursue this wonderful path.
Hi Tyler,
Do you know if your dentist salary data accounts for income as a practice owner? I wonder if your income numbers only include W2 income (which is often less than half of a dentist’s true income). Because practice ownership, while decreasing, is still a73% (2021 numbers), this would be a critical detail.
Yes, my understanding is that the data includes practice owners, though admittedly it is difficult to parse out all the relevant variables in the available data sets. See my response to Chris in comment #3 for more context on the salary numbers.
Your point about practice ownership declining is extremely relevant for those considering dentistry as a career (the target audience for this post), as they will likely be heading into an industry where ownership is increasingly uncommon and thus, the NPV and IRR of their careers will more closely resemble what is outlined here than what the previous generation is telling them to expect financially from their career.
Again, I don’t believe the financial pros/cons should be the prevailing factor in choosing dentistry, or any career, but I do think it’s valuable for those considering entering the field to have a realistic view of what range of outcomes are plausible for them. The notion that still runs through our culture that dental school entry = “rich doctor life” is deeply flawed and is deserving of closer examination.
Haha… Tyler, don’t be so quick to say that dentistry wasn’t worth it for you 😁. I mean, financially anyway, you have your tax-free passive income (ie. disability claim). Combine that with the free time for a second career (negative opportunity cost?) and I bet the ROI will be pretty strong for you.
Dr T,
I know you and love you, even after all these years, and I know you don’t mean anything by this because you are genuinely kind person. I just want to speak to your point as I hear this kind of comment from time to time, mostly from my dental friends, that I won some kind of disability-anatomy/physiology lottery now that I get my disability income and get to work in a field that I like more than dentistry.
I am the first to admit I am very fortunate. I am grateful I had a good own occupation policy, I am grateful I get to work from home and see my family more, I am grateful I am able to lead a fairly normal life despite the problems with my health. My life is sublime by any reasonable metric when measured across the human experience, past or present.
That being said, I want to be unequivocal in my position on this topic – I’d give it all back in a heartbeat not to live with relentless and demoralizing pain I feel every minute of every day. PT didn’t help, surgery didn’t help, medications barely/occasionally help, it can feel overwhelming and hopeless at times. I don’t complain about it because complaining doesn’t help, in fact quite the opposite, it makes me feel worse but the day-to-day, moment-to-moment experience is real and it is profound.
My ROI is great, I don’t expect anyone to weep for me and…. I’d never ask to live this way if I had the choice.
Thanks for reading and commenting. It means a lot to have your support and participation here.
Dr. Scott, thank you for your article and for the thoughtful words in this comment.
Sorry Tyler, didn’t mean to be too playful about your disability history.
I guess what I am saying, is that in your situation, albeit complex… you are financially pretty fortunate to have chosen dentistry. I mean, just think what your life would have been like if you decided to become a plumber. Like most plumbers, maybe you wouldn’t have purchased disability insurance. Then you really would have been out of luck when/if the back pains hit. You also wouldn’t have created the unique former-dentist background that in part makes a you such a marketable financial planner in your current position.
Hopefully I’m saying this in a fair way…
I have trouble seeing the differences from late 1980s to now. My debt was far lower but my first contract was 24K a year. My debt was about 3X my initial yearly income.
If debt now is 300K and a new DDS makes over 100K seems the same. A starter house was 80K or about 1.5X my debt then, and today you can get a decent house for 450K unless you elect a high COLA location. (1.5x todays debt).
After 5 years as employee making 60K by then, I borrowed about 4x that amount for a starter 3 chair practice and building from a retiring dentist. If employees are making 150k now that would equate to 600k to borrow for their practice. You could get into your own business with that, admittedly a starter. You can’t be afraid to work, paint the walls, bring in expanded procedures, cut the grass yourself around the building.
You get the idea.. The initial investment of under 200k plus further borrowing for relocation and equipment has turned to 1.2 M when I sold this year. It did take 30 years and many extra hours as employer and maintenance of the buildings.
Made mid 400s net most of the last 10 years. Are any employee dentists able to earn that? Just curious. Did not/ would not sell to the interested DSOs. Sold to experienced dentist tired of being an employee just like myself years ago. He realizes to get over 200k he will need to take the risks of ownership. He is also bringing new procedures, I think he will crush it.
Having a DDS itself is no guaranteed path to wealth as you say. You must also make sound decisions on practice location, upgrades to equipment and facilities, hiring with intent, so many things you need to get reasonably correct. There is a reason private equity likes dentistry and loans are available for purchasers. The business of dentistry has a quite nice track record.
My favorite part of the article was where you couldn’t bring yourself to include lawyers in the long list of professions in the sentence beginning with “The world needs…”. 😁
I think a great follow up article would be are dental specialities worth it?
I’m a pediatric dentist that started my own practice a few years ago and make what Wci average orthopedic surgeon makes.
I’m with others the salary is very low.
I actually started that article many years ago. Never finished it. It probably is worth it most of the time, but they’re really competitive to get into.
Great article — but makes the same flawed assumption I made when choosing medicine as a “first-gen” college student from a blue collar family. To compare physicians with, for example, lawyers, you need to compare those with similar college credentials (admittedly difficult), not just all lawyers. Anyone can get into “a” law school, but if you examined the subset of lawyers with college credentials similar to doctors, I’m willing to bet that lawyers would easily come out on top. In fact, in my college class, my emergency physician salary (slightly below the average you quote, as faculty at an Ivy med school) is meager compared with many of the art history and philosophy majors from my class: Choosing not to pursue an advanced degree, and without any clear alternative path at graduation, they flocked to Wall Street with the enticement that the skills they’d learn would allow them to leave in a year or two and save the world at an NGO. Of course, the income became addictive, they stayed — and now they’re retired while I’m still running around the emergency department on weekends, holidays, and overnights at age 60. Nonetheless, If able to travel back in time, I’d still choose medicine (but I’d avoid a specialty that likely shortens my lifespan as well as my time with my kids).
Great article. As you state, everything is based upon your assumptions and there are so many variables to consider.
There is a lot of intra-specialty variation and many specialties are experiencing downward pressure on reimbursement rates. Gender impact on income (women often make up to 20% less), geographical variation in pay, being an employee vs self-employed, private vs. academic, part-time work, etc. It should be noted that docs in various specialties can work 50-60 hours per week, so that should be considered with looking at median incomes. Sure, some specialties pay a lot more than others but may also require more hours on the job, including call coverage. Perhaps hourly wage per specialty metric would be a better measure (I found this info and more on the Yousmile website).
Something else to consider is that docs and dentists are less likely when they are young to purchase a home that is likely to appreciate, save for retirement, have an employer match to their 401k,, and benefit from the power of compound growth. Also, many docs quickly experience lifestyle creep after training and don’t adequately save despite their high incomes….what the Millionaire Next Door describes as Under-accumulators of Wealth. I know a number of divorce attorneys who have told me that a significant number of their 40 something doctor clients, many of whom work 50-60 hours per week with a lot of call responsibilities, end up splitting very few assets, sometimes just debt, during their divorces. These are the very same docs who live in country club communities and drive expensive cars…. what is often referred to as “Big Hat, No Cattle”. Some of these specialties have high burn out rates and very poor “work life balance”…. a major consideration for today’s grads. There is a personal and psychological cost associated with becoming a doc and practicing any health care related specialty. This cost may be even higher with some of the higher paid specialties.
Most med school grads are not going end up in the higher paying specialties. A lot of specialists earn more than the median, yet those statistics come from somewhere. Someone is getting paid those wages.
So the take home message that if you choose to pursue a career, any career, it is best to keep your educational costs low, maximize your income, and maximize the years that you work. Leaving clinical medicine or working part-time due to family responsibilities, particularly for women who already tend to make less than their male counterparts, makes the ROI even more unfavorable.
Finally, enjoy what you do and go into whatever field for the right reasons. Too many people, including doctors and dentists, hate what they do and would do something different if given the choice again.