By Dr. Jim Dahle, WCI FounderQ.
Have you ever thought about doing a post on oversaving? I realize most docs probably have the opposite problem, but I bet there is a subset of the FIRE crowd that this may apply to. Does this ever come up in all the interactions you have?
A.
It was no surprise to see this question come in as a direct message on the WCI Forum, rather than an email or Facebook message. Nothing against Facebook, but the level of sophistication seen among WCI Forum members is often significantly higher than those who stumble on to the Facebook page or shoot me an email. You see, many docs on the Forum DO have an over saving issue whereas in the general doctor population only a tiny percentage face this “problem.”
A website like this, and particularly a forum, are magnets for “hobbyists” who live and breathe this financial stuff. Go ahead. Think of the doc you know who knows the most about personal finance and investing. Has she heard of The White Coat Investor? You better believe it. Heck, she's probably got a list of items she disagrees with me on. So if there were ever a place that would concentrate over saving physicians, it's here. That's just natural. The more you think and worry about finances, the more likely you are to be here. You read more, you ask more, you comment more, and you probably even help others more.
Defining Oversaving
So let's define oversaving. Oversaving is when you have “enough” to meet your financial goals but are still working, saving, and limiting spending. Despite having won the game, an oversaver is still playing. If “enough” is 25X what you spend in a given year, and you've got 50X and a full-time job, you're oversaving. If your 529 has sent you a letter telling you that you can't contribute any more to this 529, you're oversaving. If your HSA would pay for you to spend the rest of your life in an acute care hospital, you're oversaving. However, oversavers really need to be divided into two categories, the content and the neurotic.
The Content Oversaver
In the red corner, wearing the white trunks, we have Dr. Content. Dr. Content is 55. He paid off his home a decade ago and thanks to an inheritance, a paid-for medical school education, an early start, and some natural frugality, he has a $4 Million nest egg. He loves his practice and can't imagine doing anything else. He admits he'd probably even do it for free a couple of days a week. He and his wife spend $120K a year, go on international vacations and both of their cars are less than 5 years old. They have a paid-for boat parked at the dock in front of their paid-for lake house. He commutes 5 miles in a truck that he also uses to tow the boat and she drives a Tesla S. The kids are nearly through college already. He works four days a week, 8 hours a day, and never takes call. He maxes out his 401(k) each year “because I hate paying taxes” and they do Backdoor Roth IRAs each year “for the kids.”
Dr. Content isn't working any more than he wants to. He can't think of anything else he could spend money on that would make him any happier. He donates as much as he wants to charity each year and has plans to donate more at death. What's the big deal that he's still saving money and has more than he needs? It's his life and his money, so who are you to criticize?
The Neurotic Oversaver
In the blue corner, wearing the speckled shorts, we have Dr. Neurotic. He is also 55 and doesn't really like his job, but he is very worried about the state of economic affairs in the world. His investor friends refer to him as a perma-bear. He has a couple of million put away, but a large percentage of it is invested in Treasuries and gold. He would like to drive a Tesla but still drives his 2004 Camry because he feels like he can't afford the Tesla. He plans to use a 2% withdrawal rate when he retires because he wants to be “really, really sure I don't run out of money”. He plans to continue his 40% savings rate right up until he retires “probably at 70 because that's what the hospital bylaws mandate.” He takes on his partner's call shifts in order to make some extra money, despite his teenager and pre-teen begging him not to so they can go on a vacation for the first time in years.
Dr. Neurotic, despite significant wealth, is NOT spending money on stuff that he admits would make him happier. He is also delaying retirement despite feeling burned out and disliking his job. In fact, he is actively doing things that worsen his burnout (such as picking up additional call.) This is what unhealthy oversaving looks like.
The truth is that none of us oversavers (and I'm certainly guilty as charged here) are a true Dr. Content or a true Dr. Neurotic. We're all some combination of the two. But the more we can move toward Dr. Content and away from Dr. Neurotic, the happier we and our families are going to be.
What do you think? Are you an oversaver? Do you lean more toward Dr. Content or Dr. Neurotic? Has that changed over the years? What advice do you have for an oversaver?
I can see a touch of both of these in my world. I’m probably closer to Dr. Content than to Dr. Neurotic. We’ve laid down a plan that will get us to our goals in our 40s, but we don’t feel like we lack for anything. In fact, we close today on a house we are buying – but this was done intentionally after paying down debt.
The dilemma I have that pushes me towards Dr. Neurotic is when I think about taking steps back from work, but then realize that might extend our timeline to age 50 and it makes me nervous. This is obviously ridiculous as being FI and able to retire at age 50 is still a job that is quite well done… but I’d be a bold face liar if I said that things that push this timeline back (like going part-time to extend my career and produce happiness) don’t make me pause.
It’s good to have this conversation and to make decisions intentionally. Spend some time that to figure out what makes us happy and what’s simply not worth it.
TPP
Doctor Content here. I do feel that over-saving is better than under- saving.
I am a hybrid of the two but closer to Dr Content on the spectrum. With projected numbers it is eerily similar to your Dr Content example except the primary gig aspect. For me I would transition out of medicine at that point and exit stage left.
I guess if you had a choice oversavers trump undersavers any day and the only true downfall is that you will end up with too much money in the end (and thus worked longer than you had to or denied things that you could have easily done along the way).
Most people do not want to die exactly when their account balance hits zero and plan to give the reminder to their heirs. So technically all of us plan on being oversavers. It’s just how far are you on the continuum that it may approach pathological levels
you cannot be too rich or too skinny
sadly most americans ret accounts are very thin
Um. No. #anorexia #miser
As I was reading this article I was telling myself, “great! I am the neurotic oversaver!” But once I finished I would classify me more as Dr. Content. I have reached FI by the definition of having 25x my expenses and have no interest whatsoever in retiring. I am in the process of firing my FA and following a combination of the listed portfolio ideas on this site. I plug in my nest egg numbers into retirement calculators and figure I really don’t need to save anymore and just let the investments do their work as I won’t draw from them anytime soon. I am very grateful of everything that I have. I probably don’t vacation enough and have a hard time loosening the strings, which may make me somewhat like Dr. Neurotic, but I am not stressed with what I do and I believe I spend a great amount of time with my family, which is the most important thing for me.
Excellent insight regarding the forum vs. FB user group. You totally nailed the distinction and why I fit in so well in one and not the other.
I would categorize myself as a 50-50 split between the two oversavers. It’s the right blend for my personality, but I am making an effort to move closer to 75-25 ( favoring contentment).
Don’t know that I was referring to the FB group members with that line, more to the casual user of the site. I don’t know that I’ve spent enough time in the Facebook Group to really be able to make a comparison in that regard.
“Nothing against Facebook, but the level of sophistication seen among WCI Forum members is often significantly higher than those who stumble on to the Facebook page or shoot me an email.”
Ha, well that’s how I interpreted it, and I still agree. 🙂
Well, happy to see I’m also in the middle. Might be I’m the one who needs to write it (or my math/actuary/finance bro who could do the real math and stats) but how about an article on the factor of uncertainty beyond unrealistic (?) hyperinflation in our lifetime fears. Here I am, Dr. Content almost but in the Dr. Neurotic corner maybe because part of our income drops 60% if my younger husband, whose parents made it to 81 and more than 80 so far, dies first. (Whether I want to be the one working to maintain comfort in the nursing home for in-law and parents is a secondary but possible issue.)
I think you better write it. I’m not sure what I’d say.
Thanks for helping me understand myself.
-Dr. Content Oversaver
I found out early in my medical career I had an incurable, progressive, but unpredictable neurological disease. Since I didn’t know how long I’d be able to work, I developed the habit of saving every cent I could and maintaining a relatively low standard of living. Since I stayed single, I could easily do it. But as it turned out, and as new effective treatments became available, I was able to work longer than I thought and ended up w/ a large nest egg when I finally voluntarily retired at 66. So for me, over savings was a prudent necessity.
I think it is hard for us early career guys to know at this point. We are saving at a rate that would allow me to retire at 50 if I wanted. I am happy with my workload and I feel that we have all the material things we would want. (Sometimes feel that we have too much!) This sound like I will be set up to be on the Dr. Content side of things but it is hard to tell what my future self will do. Maybe I will become neurotic and start hoarding gold. But, hopefully I will continue to follow The WCI and similar outlets to keep myself sane and avoid becoming a perma-bear.
I’m trying to convince my 25 yo that no matter how wonderful her job is, and has been for decades for her new coworkers, she really ought to be saving like she may want to quit in 10 years. Maybe if she were 5-10 years older (as docs are with our extra training IF we go straight on from high school/ college) and in that family formed/ growing stage like a doc she’d be more aware of all the things you might not have time for because of work. Maybe she’ll be more receptive in 5 years.
put my fist dollars in January into retirement account and paid myself first
remember vividly first 100k and first million
loved the 80-90’s!!!! equities boomed
I am Dr. Content. FI and working part-time because I want to not have to. I still maximize tax-advantaged retirement account contributions but it’s mostly moving funds between taxable, pre-tax and Roth accounts rather than actual new savings.
I think I have been conditioned to have a pessimistic outlook (EM training, cave diving, mountaineering–always thinking of the worst case scenario), so it’s hard not to be neurotic at baseline. But I have also grown into a lifestyle where I have no need for a budget and I’m relatively insensitive to pricing…this is the more likely reason I’m still working/oversaving; being on a “fixed” income sounds oppressive. Of course, I’m 45, so there are a lot of unknown unknowns and known unknowns on the horizon.
Dr. Content is not an “oversaver”.
You’re only an oversaver if you’re depriving yourself and/or your family from things or experiences because you don’t want to spend the money when you clearly have it.
You can define oversaver however you like on your blog and I’ll do the same. 🙂 Dictionaries, as you might expect, are a bit vague on the topic.
I was using your definition: “So let’s define oversaving. Oversaving is when you have “enough” to meet your financial goals but are still working, saving, and limiting spending.” Limiting spending being the pertinent point here.
Dr. Content is not limiting spending as you pointed out. Again from you: “Dr. Content isn’t working any more than he wants to. He –can’t think of anything else he could spend money on– that would make him any happier. He donates as much as he wants to charity each year and has plans to donate more at death.”
So there you go.
Right. You’ve got it. That’s the point of the post. Even though Dr. Content is saving more than he needs, that isn’t a bad thing.
WCI, your concept of “done saving” is very useful. That allows Dr. Content to enjoy medicine for the rest of his/her life, work maybe half-time, and not have any worry about spending all the earnings. However, there seems to be a lifelong pattern of applied knowledge combined with appropriate risk-taking that appears to be at the root of content. Dr. Neurotic isn’t just over-saving – there seems to be lack of knowledge, and deficiency of appropriate risk-taking that will cause a lot of misery no matter how much they save.
I think there is a third category, the innately frugal; I am one. I have no fear of running our of money, and no desire to save more. Oversaving is not an issue with the innately frugal, the objective is simply to avoid overspending. My car is a 2001 Acura; no regrets, it works for me. I catch myself checking the per ounce cost of items on the store shelf. The goal is avoiding overspending, and oversaving is simply the inevitable byproduct. Is such frugality irrational? Is spending more because you can rational?
Spot on. For some people, and I think that includes you and me, it just feels good to get a good deal. And there is always a good use for dollars not spent. Maybe you don’t need them, but you can put them to good use to help others.
Cheers!
-PoF
I’m in strong agreement with this. I always strive to get a good deal and always will. Even if my continued savings contributions, career advancement, and lifestyle improvements put me in the upper echelons of wealth, I’ll still need to feel like I’m getting a good deal. As you and John identify yourselves, I’m also innately frugal.
Craig is right.
Part of the problem is imaging that the secret to happiness is spending more money. Assuming that those who spend less than they can afford are painfully depriving themselves. Maybe they stopped spending because there was nothing else they wanted to buy?
If you go to a restaurant do you order every dish in the menu? You may say “Of course not. That would be an absurd waste of money. I don’t want everything on the menu, so why should I feel compelled to buy it?”
Same with over saving on anything else. Buy what you need. Buy some responsible subset of reasonably priced wants. Save the rest.
Along those lines, Dr. Content is not much of a saver.
A lake house? A boat? Two late model cars including an expensive luxury car? International travel???
They may have managed to accumulate a good nest egg, but it would have much larger if they could get their spending under control.
There is nothing wrong with continuing to work past the point that one could afford to retire. Minimizing the total amount of work one does in one’s life is hardly an admirable goal.
By that logic, why didn’t Lebron James quit after his first NBA season? He was rich at that point. Carl Icahn. Warren Buffet. Jamie Dimon. They are all far past the point of worrying about paying for retirement. All but James are too old to retire early. What is wrong with them? Don’t they know that doing nothing should be their goal?
My wife and I fall more into the Dr. Content category. We currently maintain a 40-50% savings rate because we know it’s important to save while you’re young and unencumbered by expenses of raising a family.
We feel math makes the reasoning rather simple: contribute as much as you can, as early as you can, as often as you can and let compounding returns do the heavy lifting for you.
We don’t hamstring ourselves financially nor do we forego major life experiences in favor of funding our savings accounts. Quite the contrary. We live within our means and still manage to live a very comfortable life.
We prioritize reaching financial independence but also the necessity to enjoy the ride between now and when we reach it. We attempt to balance our long-term needs with our short-term wants to allow us to live well.
Sounds like a good balance.
I will also hopefully have this “problem” one day and neatly find myself semi-retired and very good friend of all you Dr. Contents.
Finding the balance of living for now and saving for later is a bit of a challenge and something that I’ve been trying to figure out since learning of Financial Independence. My wife is pulling me more towards today and I think we are finding a healthy balance.
I realize the two Drs. are made up exaggerations, but Dr. Content as described isn’t living on $120k annually and Dr. Neurotic has a much larger nest egg by a factor of 2. Regardless, outwardly I probably look like Dr. Content while internally I often feel like Dr. Neurotic. Of course the peace of mind that comes with 20 years in practice following Boglehead principles really helps move the needle from Dr. Neurotic towards Dr. Content.
This is very interesting discussion. Most of us do lie somewhere in between.
But here is another take that I have been pondering for some time over the past few years. Growing up we were low middle class. Although food and shelter were always available (even though we were on food stamps for a short period)….Vacations and other expenditures were always a once every 1-2 year luxury. My parents (father in particular) were always dreaming of how nice it would be to “win the lottery” or “make as much as professional athletes”. I now make as much money as many professional athletes did/do. I also make as much as a lottery winner would have in the 90’s except I make that in 1 year. Here is the question I can’t answer without feeling some semblance of guilt. How can I justify not working when I have the intelligence and ability to do so? If I just show up and work, I “win the lottery” every single year. If I just show up and work for the next 10-20 years, my family for at least the next 1-2 generations will never have to worry about money. (I’m not saying that I don’t want them to worry about money). Whereas, if I relax and retire now, I might get to spend more time doing things I like, but would feel wasteful for not taking advantage of this wonderful gift and opportunity I have been given.
I have spent a lot of time pondering this. There is not right answer as far as I can tell. But maybe it will offer a different perspective to some of your FIRE types.
“The whole reason for doing any of this is to lead the happiest, most satisfying life you can possibly lead”. That is a quote from Mr. Money Mustache that I took from a recent Jonathan Clements’ HumbleDollar blog post supporting FIRE. You seem to be questioning FIRE from the perspective of selfishness — though Ayn Rand might approve, you personally do not.
I too have spent a lot of time pondering FIRE, but in the broader context of its impact on society. I have found the best way to evaluate FIRE, and any detriment to society, is to consider Jonathan Haidt’s (“The Righteous Mind”) discussion of Fairness and the dichotomy of proportionality and equality. FIRE seems to be the poster child of proportionality.
I know what you mean. Seems silly for the next generation to struggle when I can literally pay for their entire retirement by working another year or two.
That said, I’m not sure that’s actually good for them for me to do that. Warren Buffett said that he wanted to give his kids enough money that they could do anything but not so much that they could do nothing. I’m not sure that’s exactly what he did/is doing, but I like that idea.
But even transferring the idea from my heirs to charity, there’s still an issue. It’s a bit like the people who say doctors shouldn’t go part-time or retire early (or that mothers who will go on the mommy track shouldn’t be let into medical school) because “you owe society.” You don’t owe anyone anything. Do what you want to do with your life. The real limited asset you have is your time. Be sure you’re spending it exactly as you want to.
I’d say that maybe doctors do “owe society”. In the US we agree to pay doctors, on average, twice what they earn in other wealthy countries. FIRE seems a strange way to show gratitude for this largesse.
B.S. You don’t “agree to pay doctors.” Try paying them half as much as they’re asking and see how much work they’re willing to do for you.
The only docs who owe anything to society are those with federal student loans or military or NHSC commitments. They need to fulfill their commitments, then they’re free to do whatever they like, just like anyone else.
Society agrees to a system that results in the higher pay.
https://www.politico.com/agenda/story/2017/10/25/doctors-salaries-pay-disparities-000557
WCI,
I agree that we do not owe society, my kids or anyone else anything. It is more of a feeling that I have this ability, intelligence, and fortune to do more. I want to do it for myself…for my time…and if it helps others (charities, less fortunate, my family etc) along the way then that is great.
Also, I’m not sure I want my kids to see their father stop working at age 40. Although I would get more time with them, I want them to be driven enough to work as hard and as long as it takes to do something meaningful with their life. I have heard and used the Buffett quote many times. I think it is great. It definitely helps guide what to do with your kids, but doesn’t give guidance for ourself.
Thanks,
It’s a good time of year to remember that Scrooge was an over saver. He eventually improved his ways. I wrote about this in an article called Stop Putting Money In Your Retirement Plans. (You can read it here: https://drcorysfawcett.com/stop-putting-money-in-your-retirement-plans/ ) It was surprising how many people sent me derogatory responses on the concept that you can save too much. If you are saving too much, it means the money is not available for you to enjoy your life today. Find a good balance.
Dr. Cory S. Fawcett
Prescription for Financial Success
Yes, you do owe someone something. You owe society for making it possible for you to be a doctor.
To think otherwise ignores that society makes a huge investment in producing physicians. As much debt as one may assume to get there, it would be much greater if you had to pay the full cost. At my medical school tuition represents 4% of revenue. The rest comes from a large variety of sources including much more money in endowment income (the result of people gifting to the school) than tuition produces.
No matter how much you spent on medical school, you did not pay anything close to full freight.
Then you trained. Medical training is heavily subsidized by the government- tax money from everyone used to turn out doctors. You do not have to borrow the money to pay for these costs and you do not have to pay it back. But grabbing all the bucks you can and quitting means society made a bad bet when it put you through school and training. It would have been better off with someone who had a longer term commitment to the field.
Totally disagree. Over the course of a residency, I certainly provided society in more in value than the $100K I was paid with Medicare funds.
Nobody should feel obligated to do work they do not wish to do out of guilt that they owe somebody something. Carry your argument out to its logical conclusion- physicians shouldn’t be allowed to retire, shouldn’t be allowed to work less than 80 hours a week, shouldn’t get maternity time etc and you can see how silly it is.
Engineers and authors that graduated from state universities are subsidized too. Nobody is saying they have to churn out a book every year.
They did not take up scarce space in a medical school class.
You may disagree with the cost of medical training, but the figures are the figures.
Hospitals do not hire residents to make a profit on the deal. The trainees cost the hospitals money. They only offer training slots if they get Medicare funds. You may wish to claim otherwise to feel better about taking the education and training money then bailing out. Look at the finances of medical education.
Working 80 hours per week or past the age at which their abilities fade would be dangerous.
First, who’s bailing out? I was in the ED all day today. I’ll spend most of the weekend there. How about you? Don’t you dare lecture me about practicing medicine. I would argue that the only people that really know for sure they’re doing it for the right reason are those who can walk away at any time.
Second, don’t you think it’s dangerous to have a doc practicing medicine who doesn’t actually want to practice medicine? Who wants that doc? I don’t.
Third, if you don’t think university hospitals are making money on residents you’re nuts. Now an intern? Sure, that costs you money. But a senior resident for $50K a year/$15 an hour? That’s a steal. Average it all out and the hospitals are doing just fine. Having residents allows an attending to see three times the patients in an ED and they all get the same bill whether seen primarily by the attending or by the resident. You can hire 5-6 residents for the price of an attending.
Fourth, if you think medical school class space is “scarce” open up a for-profit medical school. You’ll fill the class the first year, just like these guys are doing: https://en.wikipedia.org/wiki/Rocky_Vista_University_College_of_Osteopathic_Medicine
You still haven’t said how many hours and years a doctor “owes society” nor why you should be able to decide how other people spend their most limited resource. Is 30 years and 60 hours a week and 50 weeks a year enough for you?
You can look up the finances of medical education. These are facts, not opinion. If you don’t want to bother reading annual reports from teaching hospitals, medical schools and CMS, ask yourself how many for profit places have medical schools and training programs. If education made money the answer would be “all of them.”
Consider that the salary you were paid during training was a small part of the cost. In addition to cash benefits, like health insurance, they also paid your malpractice and the employer share of Medicare and Social Security. You benefited because your med school and hospital did not pay local, state or federal taxes on their revenue. Did not pay real estate taxes. Your hospital got paid teaching hospital rates because operating training programs makes the hospital more expensive. That was not seen as money in your pocket but it was a subsidy nonetheless.
Not a lecture. Just stating facts.
It is certainly opinion whether, having benefited from a subsidized medical degree – true of everyone, whether or not they got loans or scholarship- and subsidized training- true of everyone, no matter their salary as trainees- one owes society anything.
One opinion could be that all those people whose taxes helped pay for your education are suckers who made a bad bet on you. Too bad for them, but not your problem.
An alternative attitude is that you were given huge amounts of money and a privileged place in society in return for practicing a full career.
Not a “lecture”, just my opinion.
Give me a break.
Here’s a for-profit medical school:
https://www.rvu.edu/rvu-su/college-of-osteopathic-medicine/#1524584982612-53bf3ff5-8149
They charge $55K for tuition.
If they can make a profit at $55K/student, why do you seem to think that $55K elsewhere doesn’t even come close to covering the cost of that education?
Okay, now let’s move on to residency programs. Here is a for-profit residency program.
https://www.envisionphysicianservices.com/careers/clinical-job-search/emergency-medicine-residency-program-director-kissimmee-fl/jo000016828?ci=18
Yup. Owned 100% by a for-profit company in order to boost its bottom line. Guess what? It’s residents get paid about the same as other residents:
https://med.ucf.edu/academics/graduate-medical-program/resident-benefits/
So if this company can pay its residents that much and still make a profit, it seems that other residency programs are still likely coming out ahead on this deal.
You can extend your crazy reasoning to any other profession in this country. “Society spent all this money teaching you how to shoot a gun. You need to now stay in the Marines until you’re 60.” “We subsidized your accounting degree at State U. You now owe society not only working a full career, but should also do tax prep for poor people on weekends in April.” It sounds just as dumb when you apply that reasoning to doctors.
Pay off your student loans. Finish any contracts you signed. Then you’re free to do what you like with your life, guilt-free. If that’s medicine? Great. If it’s something else? That’s great too. It’s your life. It’s a free country.
While I agree more costs are borne by the public than meet the eye, the Public having access to well-trained medical care produces a positive externality of such disproportionate magnitude that it more than justifies the subsidized cost of training them. That’s the entire argument behind subsidizing education at all levels.
Some physicians work longer than others and produce different levels of returns on that public investment. Much like an investment portfolio, not all investments have a positive return (or a high magnitude positive return) but in the aggregate, you hope to receive a positive return. Therefore, I don’t see a physician retiring early as selfish. It merely lowers the potential return on society’s investment. It also lowers the phyiscian’s return on their investment on their side of the equation as well.
And WCI, you’re partly correct about the working until you kick logic, however the 80-hour exhaustive work week after work week without maternity time, vacation, or any other benefit which allows them to be paid while being away from work, doesn’t hold as much water. If a lifestyle like that was maintained it would severely hinder productivity and possibly lead to unnecessary loss of life. That would change the cost/benefit calculus behind the public’s investment. Not saying some physicians don’t live like that, but for the physician population, I don’t think it would be sustainable. If that was what was required to be a physician, I think you’d have a lot fewer people wanting to go into healthcare.
Exactly. Society heavily subsidizes medical education and training in return for docs working long careers.
Some docs hold up their end of the bargain. Some cannot, often for health reasons.
Others could but choose not to.
As long as enough docs keep at it the system functions.
The system can be exploited. Take all the subsidies you can and quit as early as possible. Some people do that.
Free country and they got a good deal. But it is silly to deny the subsidies were there.
Afan- I made a deal with society: to pay off my student loans and give the Army 4 years as staff; and residency before then if they wanted me for that. I fulfilled that deal and then some as I worked another 8 years FTE (and counting). If I could work a 40 hour work week; 4 weeks vacation paid or unpaid, I’d probably work until 75. Especially if medicine was as it was during med school and training- no tedious often nonfunctional EMR gumming up and slowing down my work day, ability to spend a good 10-20 minutes face to face with my patients as needed without running late or being cussed out by admin and or patients waiting, malpractice low risk and not a threat to my family’s financial security. I fulfilled my obligations and was willing to continue beyond my pay back/ paid off time. I freely admit they’d get more work out of me if I earned lower pay. However who (able to qualify as a physician) would accept the deal enough of us now tolerate, f or even less money than now?
Aside from which: Pennsylvania and the Army on top of other resources subsidized my training. I never practiced a day in Pennsylvania, and certainly received no funding for my earlier training from Great Britain where I later worked. (They did subsidize my mandatory retrain in the UK, but they got a pretty good deal in me being way ahead with 6 months of their training, than of many younger less trained docs they’ve subsidized for a decade or so.
True or False: Doctors’ salaries are subject to the normal rules of supply and demand. Clearly this is false. Society has concluded that healthcare falls outside the normal rules of capitalism. Every wealthy nation in the world has concluded that its citizens must be provided quality universal healthcare. The exception to this is the US, which hasn’t yet fully committed to universal healthcare. If left to the invisible hand, the rich would receive outstanding healthcare, the middle would get substandard care, and the poor no healthcare at all.
The citizens of the other wealthy democratic countries have agreed to assign healthcare planning and economic matters to the appropriate governing bodies. These bodies have established systems that insure quality healthcare for all, at a cost of approximately half of the US healthcare cost. The US system remains a hodgepodge due to partisan politics.
This article explains the economics of doctors’ salaries in the US:
https://www.politico.com/agenda/story/2017/10/25/doctors-salaries-pay-disparities-000557
Doctors’ salaries also average double that of the other wealthy countries. If the US were brought in line with those countries the salaries would be cut in half. The important point is that the people of the US and not market forces would be making this determination. The author notes that there is a sentiment in the US for doctor salaries to be set at a higher level than that in the other countries. That is fine, but then don’t the doctors owe society something in return? How does FIRE fit with all of this?
Engineers, teachers, tech workers, entrepreneurs, and most other professions are also paid more in the US than in other countries. That’s a dumb argument.
The people of the US can decide what they’re willing to pay me to work, but they can’t decide whether I’m going to work for that or not.
The other wealthy countries set the doctor’s pay level as low as possible, but high enough to retain the necessary quantity and quality of doctors. Of course, as you suggest, some aspiring doctors may decide to forego medicine for higher paying professions. An open position might then be filled by a young highly qualified doctor from India. I do think, however, that most people will believe that doctors’ salaries are set too high if many such doctors become financially independent and retire at age 45.
If most people believe the salaries are too high, they should go to medical school. Then they can FIRE at 45 like all those doctors.
Seriously though, I can count the doctors I know who have FIRED at 45 on one hand. This is hardly a systemic issue. Even the most famous FIRE loving doctor out there is working full time right now.
I do think, however, that most people will believe that doctors’ salaries are set too high if IT IS POSSIBLE FOR such doctors TO become financially independent and retire at age 45.
A lot less early retiring docs would do so if we could work less than the ‘average’ American’s work life- =(65-18)yr*50weeks/yr*40hrs/week = 94,000 hours. I’ll count med school as 50 hours/week 48 wks/yr, college not at all, residency as (for most of us current staff docs) 80 hrs/wk 50 wks/yr and 4 years average to total 25,600. Gives us 34 more years to work off those hours IF we could get 40 hours a week. Or retire at 63. Now, how many of us work 40 hour weeks? At 60 hrs/wk it’s retire at 52. 70 hrs/wk, retire at 49. So many of us are working longer than we should?
Ha ha. Mr. Money Mustache retired at 31. I didn’t even finish residency until 31. I guess tech worker’s salaries are set too high too. In fact, if you talk to all those FIRE blogger folks, they think anyone can retire in their 30s, much less their 40s.
Canadian physician salaries are quite high.
In most developed countries physicians occupy about the same place on the percentile income scale as they do in the US. The difference is that the range from high to low is much broader in the US.
So being at 90th percentile here equates to a lot more money. But those other countries tend to subsidize education more generously than the US, making it possible to go all the way through degree and training without ever paying any tuition. Much less debt to start makes it possible to become a doc with an expectation of a lower lifetime income.