[Editor's Note: This guest post came out of an email discussion I had with a hospitalist who wishes to remain anonymous. He took exception to many of the posts on the blog that advocate frugality and taking the attitude that physicians should consider themselves upper middle class or HENRYs (High Earners, Not Rich Yet.) As part of the discussion, I posted a poll on Sermo, which I will summarize in our next post as a bit of a “Pro/Con” on this question. Truthfully, after reading his submitted post, our disagreements are fairly minimal and our “argument” was mostly just he and I talking past each other. The writer and I have no financial relationship.]
Many of us at one point in our lives glanced at the television while an episode of “Lifestyles of the Rich and Famous” gave us a whirlwind tour of opulent mansions and extravagant lifestyles. Today we hear about executives and Wall Street financial professionals of the top 0.1% that make approximately two million dollars a year, many of whom have millions in assets. Physicians entering their first years as attendings, exhausted from grueling hours in unforgiving residencies and fellowships while nursing enormous student loans, know one thing: Their lives are completely different than that, and people who lump them together with the ultra-rich simply don’t understand.
Doctors Aren't Super-Rich
Physicians are not what most Americans would consider the “super-rich”, those with financial holdings valued in the millions and an annual income over a million. Furthermore, many physicians in academic positions or primary care make less than half what many specialists are paid and fit in more with upper middle class professionals such as engineers, attorneys at small firms, and pharmacists.
The Average Doc Is Rich
But what about the majority of physicians whom are specialists and surgeons? Let’s skip the higher paid surgeons and focus on specialists: the most recent surveys point to about seventeen specialties averaging about $250,000 a year in income plus or minus approximately $40,000. A physician’s income of $289,680 is in the top two percent of incomes in the wealthiest country on Earth, an income of $236,000 is in the top three percent. So while they aren’t super-rich, are they rich? I believe that they are for the reasons listed below, and I believe they should be proud about their financial success rather than trying to convince everyone they are middle class.
Comparing Disposable and Discretionary Income
Let’s start with a Middle Class family of four which we will define as one with the national median household income ($52,726), living in a house of the median national value ($186,200). They will be compared with a physician’s family of four which will live in the same value house and receive $250,000 of income per annum, as most non-family medicine/non-pediatrics/non-academic positions pay in that range (of course some make much more). To try and make it even fairer to the physician, we will put them both in a state with a progressive state income tax. Also both families will each put $5,000 a year into their 401k/403b for employer matching funds. I used EFile and Paycheck City online calculators and assumed New Jersey residency to arrive at the following figures:
-
- The Middle Class family would pay $4,036 in federal payroll taxes, approximately $1,300 in state income tax, and no federal income tax. This leaves them with $42,390 after their income taxes and the $5000 tax deferred retirement contribution.
- The Physician’s family would pay $11,124 in federal payroll taxes, approximately $14,500 in state income tax, and $44,143 in federal income tax. This leaves them with $175,233 after their income taxes and the $5,000 in tax deferred retirement contributions.
The point becomes even clearer when one examines the difference in discretionary income instead of disposable income. As both have the same family size and same house, they’ll both need $1,400 for mortgage payments (including property tax and insurance), $350 for utilities, $150 for gas, $100 for phone/internet/television, and $500 for basic groceries. A total of $30,000 in necessary expenses, which does not even include items such as cell phones, auto loans, undergraduate student loans, child care, basic life insurance or any other increasingly standard American family expenses.
-
- The median income middle class family has only $12,390 in discretionary income for the entire year.
- If we include an additional $15,000 a year in medical school loans, that increases the necessary costs for the physician’s family to $45,000 a year. Yet, the physician’s family still has $130,233 in discretionary income.
Doctors Have A Lot More Discretionary Income
Here we arrive at the heart of the issue: After both breadwinners give their families a solid middle class life, that median American would have a few thousand dollars to spare for all the other family expenses. On the other hand, the physician has enormous sums of money to spend however he wishes, the cautious and responsible physician will set up a lavish retirement account, expensive disability insurance plans to cover every reasonable contingency, win acclaims through generous charitable contributions, and take many family vacations, any of which the middle class families would love to imitate. A more adventurous physician could use that sum to easily afford a million dollar home, new luxury cars, private tutors, and regular international travel. Either path is well above the middle class family experience in the United States.
Compare Assets AND Income, Not Just Assets
While I sympathize with physicians who hate it when people ignore all the time you’ve put in, how long the path has been, and how much debt you have from the whole process, it would be an overreaction to try and claim that low or even temporarily negative net worth pushes you all the way into middle class territory.
Assets are not indestructible units of value and a physician’s career income is not some wildly fluctuating sum based on luck. First, assets lose value on a regular basis and are sometimes completely lost. Which would you rather be, someone who just put their inheritance of millions into a diverse investment package with Bernie Madoff, or a radiologist fresh out of fellowship with several offers? Second, American physicians live in a country that pays their profession better than any other in the world, there is currently a doctor shortage with an aging population and expanding insurance rolls, and not only is this country incredibly wealthy but also the most stable in the world. There is a reason places like Bank of America have a special mortgage option just for American physicians to skip all the down-payment and debt-to-income ratio requirements of every other profession, even when the physician has hundreds of thousands of dollars in debt, yet receiving only a paltry residents salary: Financial experts know being a physician in America is a virtually certain guarantee of being rich.
So what would be an accurate measurement? Take your reasonably projected career income and minus the student loan debts you accrued in medical school, and compare the adjusted number to other reasonably projected middle class career incomes. You will still find a wide disparity in the physician’s favor, which should cheer you up: you picked a great career.
Other Physician-Specific Factors Are Much Less Relevant
Physicians do have a serious issue with educational debt, and this is a legitimate concern in any discussion to the financial health of physicians. However once you get past that issue, other physician-specific issues have little to do with determining one’s wealth:
- Loss of economic opportunity or income potential through medical education, residency and fellowship: In this context such terms usually deal with someone forced off their career path, such as a salesman who is bed-ridden for years or an accountant with multiple lengthy maternity leaves. One wouldn’t say a Harvard MBA had such issues because he started his career after school at 24 instead of out of high school at 18, as it is simply part of the required training to achieve the position.
- Expensive disability insurance plans, tax shelters and retirement plans: As physicians are keenly aware, medical tragedies happen to everyone, and every middle class family would love to have that security, but having the guarantee of a high income even if you become disabled is a luxury, not a middle class feature. In the 21st century most middle class families have to make due with Social Security and a small 401k.
- Physicians are charged more by sellers who assume they can afford it: Oddly enough hospitals engage in a similar practice of using charge master prices for those it assumes are wealthy foreign nationals. The point being that overcharging anyone as much as you can is a problem everyone faces.
- Physicians do not start out with “Cadillac health insurance plans” and do not receive pensions: The vast majority of Americans do not receive such benefits, healthcare reforms are reducing the practicality of such plans and pensions are even being ended for public servants. Both sets of benefits are in their twilight.
- Many specialties are very demanding and easily lead to burnout, so I can’t compile my lifetime income: Yes you can, you just go from today until you are 65. Significantly changing your chosen career for less stress and less money is not an option for most middle class families. Throwing away millions in income for a happier existence is not that different from a millionaire giving away most of his estate he hated managing. Misery does not preclude one from being rich. Just because a rich person purposefully damages his finances for non-financial goals does not mean that person was never rich.
Definition Of “Rich”
The origin of the word “rich” is from many centuries ago that more accurately meant “powerful, mighty, ruler, royalty”. In the original sense it would not strictly apply to millionaire hedge fund managers who are simply highly compensated professionals without the power of sovereign lands, title or regional influence. Many terms describing wealth do not perfectly fit physicians because they originate before the rise of professionals in a modern economy.
However, in the informal conventions of everyday speech, people are talking about someone with significant financial success who is well above middle class.
Physicians should embrace being rich
Perhaps you think embracing being rich would have negative social ramifications. But quite the opposite, denying that you are rich and telling your friends and family that you are still part of the middle class is the position that can actually cause resentment.
If being a financially successful person in the middle class means having ten times their discretionary income, what does that make them? Even if you try to explain that your children’s college will be expensive, you put a lot of it into retirement, or that you spend a lot on things such as different comprehensive insurance policies, you are in all cases simply reminding them that they cannot afford a comfortable retirement, they have no choice but to sign up their children for massive student loans, and that they have to worry about a tragic event destroying their finances.
Even worse, some may take it as passive gloating. Such as a medical school classmate who laments he “only” got into Stanford Medical when he really wanted to go to Johns Hopkins. Don’t risk projecting yourself as arrogant or detached from reality. It’s sensible to temper people’s speculation by saying you have a lot of medical school debt, professional expenses and pay a lot of taxes, so you aren’t that rich. Own your success but clarify it.
You worked very hard to get where you are, enjoy the financial rewards.
Stay tuned for the next post, where some minor rebuttal is in order. Or sound off below in the comments section!
All bar graphs/statistics aside, yes, physicians do earn more that the average middle income family. Yes, it is also true that most spend 7+ years (mostly 8-10 from what I’ve seen) during their 20’s or early 30’s slaving away. It is also conceivable why many physicians remain in debt, even years into practice–they’ve worked pretty hard to get where they are, so the discretionary spending is sort of a “release”.
I don’t even make as much as is described in the post (about $180k) (BUT I live in the midwest where the cost of living is near the bottom in the country) and I know I’m rich relative to the worldwide population, and even the US population.
And dentists don’t even have to do residency.. I finished school and started working at 23 y.o… not much different than someone with a regular 4-5 year college degree.
I sure don’t “feel” rich though.
I’m sure most of that feeling comes because i live a very “by the book” personal finance life. I have a goal to retire at between 55 and 59.5 and I know that takes a lot of sacrifice to achieve.
But a lot of people making less money than me drive nicer cars, have nicer homes, have nicer gadgets, dress nicer, etc.
I realize that the average american consumer does this through a debt driven lifestyle, isn’t saving (or isn’t saving NEARLY enough) for even a regular retirement, and is just a small disaster away from either having to go bankrupt or make immediate downsizes in their lifestyle… whereas there is almost no disaster that could harm me through multiple degrees of insurance, emergency funds, assets, etc.
But I just don’t feel rich unless i compare myself to the welfare class or like the african population of starving people.
The 50K millionaires live better than me in the near term.
agree!
Rich is subjective. I would guess most physicians who moan and complain about their finances have spending problems.
I make less than the average physician in my specialty, but consider myself rich by every possible definition of the word. I live very well on 20-25% of my pre-tax gross income, and that includes 6 to 8 nice vacations in an average year. The rest of what’s left after taxes goes toward my retirement. Many physicians I know who make much more than I do choose to spend their money on boats, vacation houses, a new car every 3 years, and “once in a lifetime business opportunities” to try to strike it rich (what they consider rich) and then constantly complain about how short they are on cash. I have absolutely no sympathy for these people.
Dear Anonymous,
I would like to respectfully disagree with your article in that I do not believe that the “Average Doc is Rich.” I believe you make some very unrealistic assumptions in your calculations. The reasons I say this are the following.
You say “Let’s start with a Middle Class family of four which we will define as one with the national median household income ($52,726), living in a house of the median national value ($186,200). They will be compared with a physician’s family of four which will live in the same value house and receive $250,000 of income per annum, as most non-family medicine/non-pediatrics/non-academic positions pay in that range (of course some make much more).”
You make a big assumption by saying that a physician family of four will be able to live in the same value house with a medial national value of $186,000. If you are living in Texas or Florida it may not be as much of an issue, but try and find a house in this price range around Philadelphia where I live and see what you get. You can’t even buy a 1 bedroom/1 bathroom apartment in the city for this amount if you want something half decent. For people that live out on the west coast or in the New York area it is even worse. If you live in a major city in California good luck trying to find something in this price range.
You also say that “as both have the same family size and same house, they’ll both need $1,400 for mortgage payments (including property tax and insurance).” Most physicians I know including myself are interested in living in a neighborhood (not lavish or extravagant) in a good school district so they can provide their children with the best education possible. I can only speak for the surrounding area in which I live but if want your kids to go to a good public school, your real estate taxes are going to be at least $8000 per year, not including the mortgage.
I have friends in New Jersey that make me happy I live where I do, real estate taxes there are insane and I have friends paying over $1000 per month. I am not talking about big mansions or 4,000 plus square foot houses on a 2 acre lot. I am talking about a 2500 square foot home in a nice neighborhood with a decent school district.
Also, family/general practice/internal medicine/pediatrics make up over one-third of all practicing physicians. So while the average family physician certainly makes good money, they make significantly less than $250,000 per year I don’t know if I would go so far to classify them as “rich.”
So while I would absolutely agree that doctors are much better off than the average non-physician, I don’t think one can look at the end result and say “the average doc is rich.” In my opinion, being rich is not just about how much money you make but it is also about your state of mind and quality of life. I think the average physician (and people in general) are not smart with their money but I would say most physicians want to live in a nice house, send their kids to a good school, and enjoy life a little. I think your assumptions are not realistic and therefore lead to the false conclusion that the average physician has over $10,000 per month in discretionary income.
Of course the points I state above can be argued. I guess if I wanted to uproot my family and move to Texas I could. If I didn’t want my wife and son to go to karate I could protest, but that is not life. Most physicians I know aren’t even concerned so much about them but wish to provide their families with a comfortable life, pay for their children’s college, and save a little for themselves in retirement. Even a family practice physician can do all these things if they are smart with their money, but I would not consider them “rich.”
Felix
I think the things you are talking about are considered things that that rich people do:
Rich: living in 2500 home in nice neighborhood
Rich: sending kids to good school
Rich: enjoying life a little
Rich: nuclear family in many cases with kids at home
Poor: rent apartment, rent home, not nice neighborhood
Poor: crappy school district, poor education, cycle of poverty continues
Poor: still can enjoy life, but in a different way… fun derived from camping vacation at state park or shooting potato guns in the backyard, or a low cost hobby like disc golf or watching TV
Poor: divorced, or never married, father no presence in child’s life, etc.
all relative.. all relative.
It’s just that doctors compare themselves to different people.
The welfare class think their doctors are rich because they can take vacations and drive a BMW.
The doctors think pro athletes are rich because they can drive Maybach’s and live in 10,000 sq. ft. homes.
Pro Athletes think their owners are rich because those guys buy Jets and yachts. Famous Shaq quote: “Heck, I’m not rich, the guy writing MY paycheck.. now He’s rich”
Pro Sports Owners think guys like Warren Buffet, Bill Gates, and the Waltons Shieks are rich because those guys have multi-generational wealth and can afford entire companies, mega-yachts, etc.
1) Just because housing values are higher in Philadelphia does not mean it affects a national measure of middle class or physicians (whom are everywhere in rural, urban and suburban settings). Living in a very expensive region is a luxury, as stated you could move to many other beautiful and cheaper places.
2) Internal Medicine can engage in hospitalist positions. I still think it is fair to exclude surgeons as a highly paid subgroup and family doctors as a lowly paid subgroup.
If you have any specific questions I’d be happy to address them
I agree with GK in that rich is subjective. Everyone’s definition of rich will be different. I do agree with much of what you say in the article, but have one major issue. That is that you did not place in the definition of rich as someone who owns their own time or is financially independent. To say that a new doctor with a negative net worth is rich is crazy. Yes, that physician should be rich in the future (unless they are not good with the money he or she makes), but not for years because they have to work to pay off their debt.
15K in student loan payments for the year is laughable for current graduates. Most who financed their own education will have payments 2-3x that, plus significant undergraduate debt in many cases.
While many physicians will graduate with zero debt, the average is usually reported at around $150,000, which is ten payments of $15,000 + ten years of interest on parts of the loan.
Some will have more, but thanks to IBR you will not have physicians making $250k and paying $50k a year in loan payments.
I think the average debt burden is now up to 208k (it was 170k when I graduated 3 years ago). My classmates turned up their noses at my choice of apartment and lifestyle choices in med school. However it resulted in 65k of total debt at graduation without family help, and this took 2 years of residency to pay off (I am married with no kids, my wife has avg 25k in additional income).
This argument would seem to be more about the dwindling of the American middle class. I think many Americans are no longer in the middle class and don’t realize it. If you are living paycheck to paycheck, have a negative net worth, and aren’t saving for retirement, you’re NOT middle class. You may be living the middle class lifestyle, but it’s a mirage.
Basically all physicians are guaranteed to be middle class, and many will finish at the upper end or even retire “rich”. I think many physicians disagree with being classified as “rich” when the only ones who ever will be will do it by living a middle class lifestyle, and won’t achieve that status in terms of assets until retirement (when likely they will continue that middle class lifestyle).
Very impressive to pay off med school in residency. That is very rare these days, and impossible for many.
I agree that many who think they’re middle class are not.
I agree “rich” is totally subjective. I have been to countries where you are considered rich if you have a car (even an old beater) or carpet.
IMHO “rich” is often connoted with the ability to live well off one’s wealth without the necessity of regular employment, as implied by the poster above.
Couple points:
1. Residents are not poor. We have a guaranteed salary of at least 48k/yr with full health benefits.
-48k is a very reasonable starting salary for new college grads.
-most residencies are 4yrs and you get out at 30-32yrs old.
-On top of that there is moonllighting
2. Having stable income, retirement, nice schools/safe neighbrohood and high discretionary income is rich.
3. I think that most docs that say they are not rich are in their late 40s to late 50s and come from a completely different generation that did see a time when physicians were very highly compensate and had little to none medical school debt. If you look at MedScape burnout survey (http://www.medscape.com/features/slideshow/lifestyle/2013/public) you will see that most dissatisfied are in that age group. Why on earth are they so bitter? They have no school debt (of at least 150k at 6.8%) they have had 20yrs of high income.
4. Current generation of residents (i.e. those that are now 25-28yo) have grown up in the exponentially rising tuition years (we all spend 8-10yrs in college, and saw each year tuition go up by 3-10%). We were in med school or early residency during the financial crisis from 2008-2012. We have seen our government loans go from 3% interest to a fixed 6.8% rate while tuition skyrockets.
We have friends (high school, college friends) that are struggling quite a bit now and will face career-long stunted growth due to the financial crisis. Heck, we all know friends that moved back with their parents, that can’t find full time-work, that can’t afford to pay their student loans and live on their own, that have miserable jobs without benefits. Having high student debt is the new normal, what matters is whether you can afford to pay it off and live on your own at the same time.
So yes, I think current generation (25-28yo) do consider themselves fortunate and rich as physicians.
We can live a nice life and afford to pay off our loans. We have high discretionary income. Want to go to beach vacation; just moonlight a couple of times and you got it.
We are children of financial crisis, and see things in a different light.
Just curious, what is the age of the original article writer?
30-something
A comment like “physicians are rich” completely disregards a number of obvious confounding variables. Although the author’s points are well taken I feel that the general timbre – as well as that of many of the responses to the original article – is as inflammatory as saying something like “humans walk on two legs”
First of all “Rich” is not subjective – it is easily calculable by evaluating ones net worth. Most doctors finish residency with a negative net worth and many – in spite appropriate financial management will continue to have a negative net worth for a long period of time. This is often regardless of their lifestyle – although many do stay poor (again using the objective measurement of net worth) by living without regard to monthly cash flow.
Secondly I believe the average income and average expenses of being a physician are minimized to an extreme: $15,000 a year in loan repayment is far too low, what about the thousands of dollars per year for state licensure/DEA/DPS/malpractice insurance/disability insurance/continuing education, this list goes on and on.
Others who have commented on their own situations (particularly as residents) including average pay and moonlighting are also making very general assumptions such as the ability to moonlight (many programs prohibit this) and are not taking into account the negative interest of 6.8% on their loans for 3-7 years of residency (many residents cannot afford to pay their loans during residency)
I do appreciate the comment on negative social ramifications of complaining about a high salary and agree to a point. Overall I appreciate the effort put into developing the article but feel that several faulty base assumptions result in a conclusion that is way off the mark.
If “rich” is easily calculated using one’s net worth, please enlighten us as to what that exact number is and how it was objectively determined.
If a 75 year old retired doctor’s net worth is 2 million dollars, of which 90% is the value of his massive 10 bedroom house and his car with the tiny wipers on the headlights, and his annual fixed living expenses are $500,000 a year, is this person rich?
What if a 40 year old woman’s net worth is also 2 million dollars, but invested entirely in a 50/50 mix of stock/bond Vanguard index funds and her annual expenses are $30,000 a year and she still works making 200 grand a year?
There is clearly a difference.
What net worth is “rich” to you? Is it defined in any financial literature that you are aware of? Is there a standard quality of life that must be met before one can be rich? If you asked all of the people that read this blog what that number would be you would get different answers. And if you asked people from a lower socioeconomic class what that number would be I believe it would be much lower. So the definition of “rich” is all a matter of personal perspective (i.e. subjective).
Clearly someone with a negative net worth is not “rich”, but one can not discount the fact that young physicians in higher paying specialties have a very high future earning potential. Even with high student debt taken into consideration. IMHO, the guest poster minimized the net worth aspect of being “rich” too much and emphasized the income aspect of being “rich” too much. They both matter as having an income in the top 2-3% makes achieving an equally high net worth much easier.
I will again say that true wealth or being “rich” only comes when one has complete control over ones time. By this definition, young doctors are clearly not “rich” as they must actively work to support their standard of living. Income is NOT wealth (unless it is generated passively). This quote is from a separate blog I read and I can not say it any better, “No matter how much money you make, unless your days are spent doing the things that really make you happy – the things that you enjoy so much that you would pay to do them – and you have control over your time, you aren’t wealthy.”
Even multimillionaires have to worry about financial ruin (or at least severe degradation) of their financial assets.
To get to the level of “I have so much money diversified in so many ways that I can live in a mansion on the beach for my entire adult life without any care” you need more than a few million.
And really, I would advise against playing the “I’m only a multimillionaire, I’m not wealthy or rich” card in public.
1) Rich is a very ancient word, not a modern scientific one of exact value. I also don’t think there is any reason to limit the discussion to net worth, as my article examines.
2a) $15,000 is a lot of money to pay a year in educational debts…you are paying off $150,000 every ten years (the average educational debt of physicians at graduation)
2b)
-malpractice insurance is usually either covered by a hospital or part of a business expense used before profits are calculated for taxable profit
-State licensure/DEA fees are often reimbursed by practice/hospital, same with CME
-disability insurance is a luxury
If you have any other questions I’ll check back to answer them
Ok – I will accept that “rich” may be somewhat subjective – however it is fairly simple to objectively state that those with a negative net worth are not rich – a state that many, if not most physicians find themselves in – for an extended period of time.
The statement about 15,000 per year for educational debt is also true – it is a lot of money. However, it is not even in the ballpark of most physicians graduating from residency these days (please refer to WCI’s post from today – he states it better than I can).
The most ridiculous statement, however, is the totally baseless assertion that disability insurance is a luxury. If you are the type of person that is going to argue that being married is a luxury and packing a lunch is a luxury because people should eat only 1 or 2 meals a day – fine. But for the rational/responsible adult this statement is ridiculous.
I would love to see a post on this one because this is even more off base than the comment about loans. A luxury? Are you kidding me? For a physician with all of this “income potential” people are throwing around and massive educational debt burden – disability insurance is an essential. If one were to become disabled the federal student loans do not magically disappear – they continue to grow at 6.8%. If you have a family to support the cashflow issue rapidly worsens. That monthly loan check (even if one were to use your artificially low value of 15k per year) has to draw from somewhere.
You only seem to take issue with disability insurance:
Everyone would like comprehensive disability insurance. Especially those Americans that work jobs much more likely to cause disabling physical injuries in fields that make a job involving manual labor impossible. How are middle class families supposed to pay for all their expenses when they are disabled without a comprehensive plan? They don’t
Federal loans are a perfect example to discuss some of this: A physician in the IBR program with $0 income due to a disability owes $0 to his federal loans, and in 10-25 years of $0 payments the loans would be completely discharged.
Alan said it best. “No matter how much money you make, unless your days are spent doing the things that really make you happy – the things that you enjoy so much that you would pay to do them – and you have control over your time, you aren’t wealthy.”
This.
wealthy means i wouldn’t have to goto my job.
wealthy means you can make money while you sleep.
if you have to do things consistently that you don’t want to do because you need money, you aren’t rich.
This part of the conclusion is 100% right — “Perhaps you think embracing being rich would have negative social ramifications. But quite the opposite, denying that you are rich and telling your friends and family that you are still part of the middle class is the position that can actually cause resentment.”
Amen. As a corollary, there are few things worse than a rich cheapskate, like a specialist surgeon MD I know whose wife got them kicked out of our wine group for always bringing a $10 bottle of wine when the host requested everyone bring a $25-$30 bottle. Actually, it was the fact that when called on it she lied about the price – in the age of Google – that was the final nail in the coffin. Look, it’s great to be frugal, but when it amounts to petty theft, and everyone knows you make over $250k/year and the military paid all your loans – yes it causes resentment.
Don’t think for a minute that the military didn’t get its money’s worth by “paying all your loans.” The military paid me 1/3 of what I make now in exchange for paying $50K worth of tuition (total). Does that sound like they got a bad deal to you?
I’m not so sure that friends and family that make less than a doctor want the doctor telling them he’s rich any more than they want him telling them he’s middle class. No wonder no one talks about money and doctors continue to get ripped off.
Guest Poster,
150k seems a bit low when estimating the current debt medical students accrue during their years of medical school and subsequent residency years. Most students graduate medical school with ~160-180k of debt, then spend 3+ years deferring @ 6% interest. By the time they finally get out and start paying back that debt is has ballooned to well over 200k.
You also can’t take the debt and divide by 10 to figure out your 10 year payment plan. You need to take into account interest rates which can significant raise the amount of $$ you need to pay back that 200k loan over the 10 year period. A better figure to use might be 10 payments of 30k/year when all is said and done.
You also assume that the middle class median income level is 1099. Many of these 50-60k/yr jobs include some sort of benefits package such as paid retirement and health insurance. These benefits are not factored into the yearly income and should be accounted for to make a fair comparison. With all that being said, after the numbers are crunched, I suspect physcians will do just fine.