St. Peter famously said, “love covers a multitude of sins.” The physician finance correlate is that a physician income covers a multitude of errors. But it can't cover them all up. You've got to at least do a few things right. You've got enough income to do anything you want, but not everything. Let me give you some examples.
A physician cannot choose to pay for an undergraduate education at an expensive institution with loans, get married, have two kids, have a stay at home spouse, borrow the entire cost of medical school including living expenses, go into a low-paying pediatric subspecialty, defer the loans during residency and fellowship, then spend 3 years at an academic center before becoming a hospital employee at a non-501(c)(3) in order to spend more time with the kids. Meanwhile buying a fancy physician home in a high cost of living area, get two nice cars on credit, have three more kids during training, put them all in private schools, vacation in Amsterdam, buy a boat, retire early, and choose a high-cost “financial advisor” who sells them lousy investments. It just cannot be done. There's isn't enough income to cover all those choices. You might be able to do about a third of them and still be financially successful. Let me show you what that looks like:
ExpensiveInexpensive undergraduate schoolBorrow undergraduate expensesWork through collegeGet married as undergradDelay marriage for a couple of years into med schoolStay at home spouseSpouse works for a couple of years to pay med school living expenses- Kids born in
undergradresidency - Choose low-paying Pediatric subspecialty
- Loans in
defermentREPAYE during residency and fellowship - Stay on as faculty for
34 years and get PSLF before taking employee job - Buy a
fancy physician2X gross salary home inhighmoderate cost of living area with good public schools - Buy
twoone nice car on credit and one beater - Have two kids during
medical schoolresidency and the other three as an attending - Put kids in
privatepublic schools - Vacation in
AmsterdamCalifornia - Buy
a boatmountain bikes - Retire
earlyat 63 High-pricedLow-cost advisor who givesbadgood advice
Do a few things right early on and you can visit the Norwegian fjords guilt-free before mid-career
That modified plan probably works out fine. You still get to practice the specialty you want. You still get the lifestyle and family you desire. But the numbers work. As a doctor, you don't get a pass on math.
I don't know why, but I see this huge divergence in physicians. Really, I could probably divide them up into four segments. These segments, however, aren't all the same size.
Doctors Who Get It Right
At the top is a group of docs who make all or nearly all of these big financial decisions “right” (in a financially optimal way). This might be 5% of doctors, although it might feel like more if you spend too much time on sites like this one. Maybe this is what their choices look like:
- Work their way through undergraduate
- Chose Anesthesia
- Got married as a resident to a successful realtor
- Had two kids as an attending
- Refinanced private loans as a resident, did PAYE/MFS for direct loans and refinanced them with attending contract in hand
- Joined lucrative private practice in low cost of living area
- Stomped out $150K in student loans in first year out of residency
- Kids in public schools
- Vacation using miles and credit card reward points
- Learn to love hiking
- Became a do it yourself investor
- Realized she was financially independent at 40
Doctors Who Get It Mostly Right
Next is a much larger group. Perhaps 60% of doctors. They make a few mistakes, but eventually get it figured out and end up very successful.
- Borrowed a few thousand for undergraduate
- Chose Internal Medicine
- Got married as an MS3 to a nurse
- Had two kids in residency, and one as an attending
- Deferred loans during residency
- Worked as a hospitalist but lived like a resident for 3 years to pay off loans, then joined a private group with minimal call
- Went to a moderate cost of living area, but put the kids in public schools
- Take an expensive vacation every couple of years, but none for the first 5 years out of residency
- Borrowed for one car, bought the other cash
- Bought a boat, but not until the first million was in the bank at 45
- Fired their initial “financial advisor” and hired a real one a couple of years after residency
- Cut back to halftime at 55 and work until 65
These docs do just fine. They have nice happy, healthy careers, families, and lives. They pay for their grandkids' educations and endow chairs at their alma maters.
Doctors Who Get It Right Enough
The third group is surprisingly small. I can't quite figure out why it is so small. Maybe it is 15% of doctors. These are the ones who get it just right. Barely. They do just enough things right to keep the ship from floundering. Never super successful, but they get everything they really want out of life and still end up without a financial catastrophe.
- Borrowed $50K for undergraduate
- Chose academic neurology
- Married a pediatrician with $400K in student loans
- Had a surprise kid in medical school and had to borrow the cost of child care—two more in residency, extending her residency by six months
- Enrolled in IBR, but not until PGY3 year
- Ended up getting PSLF, but not much was left to be forgiven
- Stayed in high cost of living area after training
- Bought a 3X house right out of residency
- Go heli-skiing once a year
- Drive his and hers Audis
- Pay a 1% AUM advisor for a reasonable investing plan
- Both work into their 60s and then enjoy a comfortable, upper-middle-class retirement in Arizona
I think the reason this group is so rare is that it is a very thin razor. Very few people can get it just right. You either fall onto one side of the knife-edge ridge or the other. Let's take a look at the other side of the ridge.
Doctors in Chronic Financial Trouble
The fourth group lives on a financial glacier, covered with crevasses with thin snow bridges across them. Their financial life is a veritable minefield. They do a few things right every now and then, but they get the big things wrong. They struggle financially throughout their lives, work harder and longer than they wish, and end up living mostly off Social Security in their short, sad retirements. Maybe one version of this story looks like this:
- Had a first career as a teacher
- Went back to medical school before the undergrad loans were ever paid off
- Got married during medical school to an attorney, but not before racking up $550K in student loans and credit card debt
- Chose family practice
- Got divorced in residency after having one kid—got lousy deal on alimony
- Stayed in high cost of living area
- Got married again to a business owner—business always needed an injection of cash, so no retirement savings at all in 30s and 40s
- In-laws moved into your basement
- Major burnout episode in 40s and practice failed—worked as hospitalist for a couple of years, then as an employee of another doc
- Got divorced again due to in-law issues
- Moved to another high cost of living area and started over at 52
- Have a car payment for entire life
- Continued to use the same commissioned salesman as a financial advisor—lost thousands in whole life insurance premiums and high-cost mutual funds sold at the bottom of bear markets
- Still paying student loans well into 50s
- End up working until they become disabled at 64 and have to start taking Social Security early
- Rent an apartment with a roommate and four cats and kids won't come visit due to cat allergies
This sort of scenario is entirely too common. Perhaps 20% or even more of doctors. Look around you. You'll see them. The details change, but the bottom line is that they made too many financial errors/expensive choices to overcome with their income.
Get as many things right as you can so that you can afford to make your desired “less than financially optimal” choices. Avoid the unforced errors. Start early. Fail quickly. Don't beat yourself up over past mistakes. You don't have to get them all right to end up very successful. But you do need to get some of them right!
What do you think? Why do we look at all of our choices in isolation and not realize that what we lose in some areas of our lives we must make up in other areas? Comment below!
I’ve certainly made my mistakes before I knew better (forbearing on my debt during training) and even after I knew better (financing a car very intentionally that was no longer going to be made). I guess I technically fall into group number 2.
I am a believer in the idea that you can have anything (except an expensive house), but you cannot have everything when you finish. I think the 10% rule has done well for us. Got to spend 10% of the difference in increase that we made from training to attending life on whatever we wanted (a car and golf membership) and the other 90% has gone to debt and investing. Have paid off $150K in 15 months in student loans doing it this way.
I’ve heard you say that you can give yourself a raise after residency to maybe 70-80k, but that you can’t start spending it all. Whatever system you use to enjoy some of the increase while doing the “Right thing” with the vast majority is fine with me. People just need to be intentional about it.
TPP
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This might be my favorite post of so many great posts! The tale of four doctors. Who will you choose to be? Love it.
I think I have elements found in all 4 examples, so have no clue where I lie, but I would like to think I fall in the Mostly Right category (the divorce and some other mistakes I made don’t make it a perfect match).
You are right that a high physician income can overcome a lot of mistakes, but not every single one of them (although I am living proof that you can almost make every mistake in the book and still dig yourself out and have a great shot of retiring early with a high net worth).
The key is to realize your errors early enough and get motivated to really deploy your money into valuable assets instead of depreciating ones.
This is great. Too many people think in black and white. “Rich doctor” or “poor student.” Starving academic or “driving a beater.” There are kernels of truth in those stereotypes.
But the truth is more nuanced. More like the examples here. There are maybe 6-12 major decisions that highly predict one’s future financial status. You can mess up one or two and still recover because of the job stability and high income in medicine. Many have regrets if they make the wrong choice on 5 or more of these decisions. Or if they have a spouse who pushes them in the wrong decision.
The “doctors who get it right” describes my choices and results almost exactly, so I think all this rings true.
It’s “live like a resident” meets “afford anything, but not everything.”
Two lifestyle and finance philosophies that are tremendously powerful in creating financial freedom when combined with a high income.
They just happen to be the opposite of what we are taught for most of our lives! It takes a some real change in perspective to reframe how we think of our fancy doctor incomes and what they can buy.
It is incredible that our psychology and behavior guarantees that it is possible for people to be “paycheck to paycheck” at any income. And that we have to know ourselves and actively learn and try to avoid that fate.
If married with kids during undergrad and med school be sure to take advantage of financial assistance available to you, especially if you are considered a zero income family—pell grants, WIC, Medicaid, Food Stamps, discount memberships to the YMCA, etc. Then happily pay it all forward later 🙂
I’m glad I discovered Bogleheads as a first year med student and that you started this blog when I was a new attending. I can only imagine where I would be financially without these resources.
There is nothing sadder than a 70 year old doctor working because they can’t afford to retire. Although with an apartment full of cats, going to work is probably a nice break from the litter box smell.
This looks like the making of a WCI financial/lifestyle calculator.
I have made many of the mistakes and was oblivious or shielded from many others.
The timing and magnitude of mistakes can have a significant effect on the downstream negative impact.
The “doctors that get it right” “chose anesthesia”. Really? I know plenty of burned out anesthesia attendings that deeply regret the choice (mainly made for financial reasons). I know they are dabbing their tears with stacks of 100 dollar bills but it just doesn’t seem worth it. I think compensation should definitely be a factor in specialty choice but it should be much, much lower than overall happiness with what you do. As a general pediatrician (which you like to pick on on this site I have noticed), I make 220K / year, work 3 days / week, have a 2M net worth at 43, and plan to stop working when I fall asleep and start drooling in an exam room ( I can’t believe they pay me so much for what I do). I did this by following the recommendations on this site and others. A huge thanks to you Jim, this site, and this community for that. This comment is just some constructive criticism.
100 dollar bills are for nose blowing. Anesthesiologists prefer to dab their tears with gold bullion.
I had a medical student come to me recently and tell me he was “burned out” and was planning on going into something that “doesn’t matter like anesthesia”. Scary! I am secretly watching where he matches and where he ends up practicing so I can make sure my friends and family don’t have any procedures there.
I chose anesthesia as representative of a high income specialty, not a specific one. Admittedly I do often use peds as a low income specialty. It truly isn’t personal.
As you know intraspecialty pay variation often matters more than interspecialty pay variation.
Ben — did you go to a rural area to practice? Or see 60 patients in a workday? Or own the practice and run it with ruthless efficiency?
Basically I am curious how you make 220k in gen peds working 3d/week and got to 2m at 43. That net worth at 43 is fantastic for gen peds or any speciality really though.
I’m behind you –I am peds EM and will hit 7 figures networth in the next 3-5 years (if the market doesn’t go into a recession), but I did a 3.5 (yes, extra half year) fellowship then stayed at a low paying private university. 🙂
The net worth is mainly due to luck with real estate timing and not making big mistakes. We also save a ton and have no expensive hobbies. We have also benefited from an aggressive asset allocation and one of the longest bull markets in history. I see 24-26 / day and work in a large group hospital owned practice. The salary is mainly due to billing correctly (99214s when appropriate and not forgetting about the 25M). Pediatricians are notorious for under-billing and not wanting to “charge people” because we like our patients and don’t want to be mean. We undervalue our work and think we are harming patients by billing them for the procedures we do. I became a coding student and learned the E and M system well and bill appropriately (and legally). It is amazing how much my Salary increased when I started paying attention to this. We currently live in a HCOL area. I hear a lot about “geographic arbitrage” and how moving to the Midwest would drastically improve my Salary but when my wife was getting recruited to start a medical school in western NC we interviewed there and every job I was offered was twice the work for half the pay. Maybe this is just in peds since they were all small privately owned group practices. I think they cant negotiate with insurers for higher reimbursement like a large hospital can but I am not sure.
A gen peds by me in the midwest was pulling 350/yr (he didn’t work 3d/wk) because he hustled, did a lot of procedures, and knew how to bill. He was an old-school “if they need to be seen today, bring them in and we’ll work until the waiting room is empty” kind of guy and he moonlighted at a hospital every weekened. I don’t think it matters what specialty you pick, if you hustle you’ll make plenty of money.
Agreed. I’d love to run a post about a pediatrician making $600K.
I would love to read that article! I would be surprised if the 600K pediatrician would be able to achieve that without seeing >50 patients / day even with procedures and the right billing. It would be good to include a paragraph about the ethics of this. In my experience the pediatricians who see this many kids are able to do that by 1) triaging self-limited viral URIs to be seen in clinic and 2) triaging mental health (behavior/depression/anxiety) and functional abdominal pain out to the ER or a specialist. You simply can’t manage these problems in 7 minutes. I am all for people getting paid more for working harder but there limits. Part of the reason for my post is that you can become wealthy as a pediatrician without 1) moving to a rural area, 2) becoming a business owner / manager, or 3) seeing a bajillion patients a day.
CB — I don’t think I want to work that hard.
WCI — I know of at least one pediatrician whose income is amazing. Google “Priscilla Chan”
Ben — sounds like you don’t have kids. 🙂
I know it’s possible to raise kids “cheap” but there are a variety of non-lavious ways to raise kids that seriously dent net worth. I’ve had a post planned for PoF for a year that I need to get around to writing on that topic..
*lavish, not lavious
2 kids
One of the things I find funny is that many satisfaction/burn out surveys show peds as one of the most satisfied least burned out fields despite the lower pay. Perhaps its not just about the money. (Those same surveys have critical care with some of the highest rates of burn out so I’m not sure where that leaves us, the peds intensivists).
From a purely financial standpoint, peds itself is it’s own microcosm of pay disparity. A pediatrician working in an ivory tower academic job can make in the low 100s since the goal is to grant support your salary and make gains by academic promotion. However, pediatricians in private practice outside the north east can do pretty well as evidenced by Ben. Also, there’s a pretty big subspecialty gap between the higher paying procedural based specialities (like PICU and NICU) and those that are more outpatient and lower RVU producing like Infectious Disease. Peds EM is an interesting field since at some hospitals (like mine) PEM is part of the department of adult EM so they get paid like the adults. However, in other hospitals where they are part of pediatrics they get paid less. I also find there’s a lot of information asymmetry in all peds subspecialties. While there’s MGMA data, it seems to not match real salaries. It’s not like theres a national pediatric ICU salary (or other subspeciality) survey to really get a sense of what you should be getting. There’s also the spousal factor. 2 full time pediatricians making 150-200k a year basically have the same household income as the anesthesiology with a stay at home spouse.
I guess my point is that pediatrics is not a ticket to poverty. If you want to have a more “anesthesia” like income there are a few fields or job choices that can get you there.
The residents in my PICU are a mix of Peds and EM. I preach the WCI gospel but try to get the peds folks a little more money hungry since I feel there’s almost a learned helplessness. I feel like pediatrics as a field is so much about children and child advocacy (which is a very good thing!) however this causes many to not advocate for themselves. I like to let the younglings know that when they are attendings if they make good choices they can lead the good life and lead by example.
In the words of Jay Z, “I do this for my culture, to let them know What a n…. look like when a n… in a roaster” (roaster=rossa.. i.e. Ferrari) Granted I don’t drive a Ferrari but you get the idea. In all seriousness, I’d probably put myself somewhere between mostly right and get it right…
Your decisions do have consequences. I found if you get the right start, fewer corrections need to be made later. When I do one-on-one financial coaching, it is easy for me to point out where they are going wrong. It is very hard for me to convince them to change to a new path. They often want to continue to do the same things but want me to help them get different results. If you want different results, you have to take different actions.
Dr. Cory S. Fawcett
Prescription for Financial Success
“Have 2 kids during residency and the other 3 as and attending”….AHHHH.
5 kids…forget the financial impact, that is too many for my sanity! 😉
Great piece! I think this one really drops the knowledge in a way that even the newest of personal finance newbies can understand.
My only question is how you came up with your percentages of physicians that fall into each group? I don’t doubt the accuracy–I’m just curious about how you arrived at your figures? Personal experience? Academic source of some kind?
Great piece! I think this one really drops the knowledge in a way that even the newest of personal finance newbies can understand.
My only question is how you came up with your percentages of physicians that fall into each group? I don’t doubt the accuracy–I’m just curious about how you arrived at your figures? Personal experience? Academic source of some kind?
Nothing citable, just my best guess from interacting with lots of docs about their finances.
Another pediatrician with net worth of 3 million at age 46, with a SAHD hubby. 4 days a week with salary over 400k. We don’t wipe our tears with 100 dollar bills. We do spend a lot of time wiping snot off of children. And our shoulders.
That’s awesome, Jennifer. We need to hear more from physicians like you and Ben (commented above). So often, I hear this limiting belief repeated from docs in traditionally lower-paid specialties that they will never have “anesthesia money” or “derm money” or “[insert surgical subspecialty] money” because they chose a particular field.
I don’t know how you got yours, but you’re working fewer days for as much or more money than most anesthesiologists I know. “Doc G” from diversefi.com was making nearly 7-figures as an internist. Your stories should be shared.
Cheers!
-PoF
That’s impressive! Ben makes 220k at 3d a week and you make 400k at 4d a week. Are you gen peds or a subspeciality?
I’ve heard of gen peds employed positions that pay 300k but not sure I’ve heard of one that’s 400k.
Outpatient general Peds, hospital owned. I start seeing patients at 7 am, book through lunch, and done by 4:30 to 5. I usually will see 30-35 kids per day. I chart in the evenings for about an hour. I am very good at documentation and billing appropriately, as Ben is. Also, I worked in undergrad and medical school, and parents funded undergrad and gave me enough money to cover rent ($500/month- this was the 90s!). Got married in medical school. Started saving early!! Low COL area, 2 kids in private school.
That’s awesome!
I got married right after med school (wife is a nurse, now a NP).
We saved in Roth IRAs during my residency/fellowship and my wife always got her 401k match, but we didn’t start trying to do more than that until I became an attending. We’re well on track for a comfortable retirement but I’m nowhere near 400k with my own salary. My wife works part time so that helps, but our daycare costs functionally eat up most of her salary at the moment.
Another good post, well done.
The only thing I don’t understand is the reasoning behind why you suggest postponing marriage until a few years into med school, instead of during undergrad. Is that with the assumption that earlier marriage will lead to earlier home purchase, earlier birth of kids, etc? Otherwise I don’t see how that makes a large financial impact as an independent factor.
To add some context to my question: my wife and I got married when we were 19 (end of 1st year if college), before finishing college and attending professional school together (I’m a neonatologist and she’s a dentist). I would put us in the 2nd category. I try to follow the philosophy of this site but we’ve certainly made some errors, however, I don’t think getting married early was one of them. In fact, going from 2 separate college aged dependents of middle income families to an independent married couple in undergrad with zero income opened up a whole new world of financial benefits (Pell grants, need-based scholarships, reduced YMCA membership, etc).
I suppose marriage often speeds up house/kids etc, but it obviously doesn’t have to. It is unusual for married people to have 3 or 4 roommates splitting costs though.
Nice piece. Overall I agree with your points, but I think the part about paying for undergrad by working your way through is unrealistic. In general, the cost of college is just too high now relative to the pay you can get as an undergrad. As an example, in my state minimum wage is < $10/hr and the local state university in town is $17k/year for tuition and fees. It may be a rip-off b/c college board says the average cost of in-state tuition and fees is $10k/yr, but that's what we have here in a LCOLA. If I told my kids I'm paying nothing (which I won't do) but that I think they should work their way through college without taking out any loans, I think they would struggle to do that. Lets say my kid gets a job working at $10/hr and again being charitable the kid pockets all that money and is able to foot the bill for tuition and fees. And even though we don't feel like paying for tuition and fees we'll let our kid live at home to save on the cost of living expenses. That would require my kid to work 34 hrs/wk 50 weeks/yr to earn $17k. Obviously there are people who do that, but I think most of these folks aren't excelling in college b/c there are just so many hours in the day. It's hard to attend classes, do enough homework to really get a firm grasp of the subject matter so you can 1) get good grades and 2) actually learn something and then hold down what it almost a full-time work schedule (1700 hrs/yr). In my mind the whole point of college is to get a good education and hopefully learn a lot about the subject matter and yourself along the way, make good grades, and then parlay all of that into a better job at the end of college than you could have obtained without going to college. Part of getting the best job is being available for summer internships, etc that would not jive with having a regular full-time job and a lot of these internship have minimal or no pay b/c the carrot is that you are getting a good opportunity for future advancement. Basically I think it's important for parents and kids to focus on things they can control to hold down expenses (which is most of what you wrote about, but you can't control the cost of your state college's tuition — as you have said before you can choose the state university or a more expensive private option) but to not loose sight of the goals you should have in attending college. I think having a full-time job in college to pay for college rather than taking out some loans is a mistake for most people b/c you it will hamper your ability to excel in the course work and then get the best return on investment later on. Get a part-time job and take out some loans so you can really do well in school!
For what it's worth, I'm in camp 2. I actually made money attending college. I pieced together a range of scholarships worth more than the cost of attending college. Some of the checks were addressed to me rather than the university so I didn't have to use them for tuition and fees. But getting scholarships is a zero-sum game. When I got the award someone else didn't and that person had to write a check for tuition. Now I'm pretty sure I was working harder and more motivated than most of these folks b/c I wanted to get into a MD/PhD program, which I accomplished after college. But one of the biggest reasons I got into that program is that I had summer research jobs every summer in college that paid ~$2k/summer (included room and board). I could have made more money waiting tables or running a lawn care business, but I would not have been admitted to MSTPs if I had done that. Now if I had waited tables, attended the state medical school and rocked it and matched into neurosurgery, I would have had more money in college and now, but I did what I wanted and I make plenty of money so I'm satisfied with the choice.
If you pick the right college, you can still work your way through. Especially if you’re smart enough to go to medical school. If you can do that, you can find a college that will give you a major scholarship. Now, add in a little help from your parents and there’s little reason for anyone to have undergraduate debt. If you can’t afford $20K in tuition a year, don’t go to a school that costs $20K a year. Would it help if I made a list of colleges with tuition < $10K a year? I know of at least a half dozen in my state.
Let’s say you pick a college that costs $8K a year. You get a half tuition scholarship. Now you’re at $4K a year. You get some roommates so your rent is $500 a month and you manage to only spend another $500 a month (these are both 2X+ what I spent in college). That’s $1000 a month in living expenses. Let’s say you spend 8 months at college and 4 months at home. So $8K in living costs + $4K in tuition is what you need to make each year. Let’s say you get a job that pays $15 an hour (minimum wage in Seattle) during the summer and work 60 hours a week for 16 weeks. That’s $14,400. In that hypothetical situation, you don’t even have to do a part time job during school. Not sure why that math seems complicated. Now if you want to go to a school that costs you $40K a year and doesn’t give you a huge scholarship, I agree that’s going to be tough to work your way through. But while that might be a fair cost for medical school, it isn’t for undergraduate because there are so many places charge 1/4-1/2 of that.
I agree the math is simple, but most people aren’t going to be able to earn what you suggest.
I acknowledged that the cost of our local university is above average even though we live in a relatively cheap area when I cited College Board stats of avg in state tuition at ~$10k/yr. In fact I wondered whether our local state U is rip off at $17k/yr. But I don’t live in Utah and my kids can only get in-state tuition in our state (with the exception of a few out of state schools that offer majors not available in our state such as aerospace engineering). I was just thinking about how it would work for my kids or others in my city to attend state U in our town. While a college student could probably earn more money by moving to Seattle for the summer, doing that might get in the way of the internships I was alluding to unless said internship is in Seattle. If that internship or job that includes room and board, great, but if not cost of living in Seattle will really cut into that $15/hr even with roommates plus it’s expensive to get to Seattle when you live in the middle of the country or on the east coast. And that $15/hr only applies to large employers — smaller employers in Seattle can pay less. Also, I guess my college was stingy, but I didn’t have 16 weeks off in the summer — like I said I had a bunch of 10 week summer research jobs and I think I had about a week off before and after so I think we were getting about 12 weeks (my school had trimesters). While it would be great to have a job that pays $15/hr at 60 hrs/wk a lot of kids are not going to be able to get that many hours at that rate of pay. Seems like you are taking the best case scenario for earning potential and cost of college. Some students will be able to earn what you suggest, but many won’t be able to do so.
I’m not taking the best case scenario. I already inflated that. Here’s best case scenario:
College costs $6K/year.
Student spends $500/month in school, $0/month out of school.
Student gets full-tuition scholarship.
Student gets summer job making $25/hour and works 60 hours a week.
Student gets in-school job making $12/hour and works 20 hours a week.
Student starts investing in a Roth IRA as a freshman.
Seriously, there are lots of ways to skin this. Let’s take your local state U, at $17K.
You help your kid apply for scholarships, so your kid gets a $5K scholarship. Your kid also agrees to live at home. Now living expenses are $100/month. Now your kid needs to come up with $13K a year. So she finds a job making $10/hour and works it 50 hours a week for 10 weeks in the summer and 20 hours a week for 38 weeks at some point during the rest of the year. Boom, you’re there.
And this assumes zero help from her doctor parent.
Not sure why this seems so complicated. Am I missing something? Is there some reason a kid can’t work in the summer? Is there a reason a kid can’t get a $10/hour job? Is there a reason a kid can’t work while going to school? Are there no colleges in your town? Is it that hard to get a scholarship to the state U? Will you not let your kid live at home while going to college?
I agree that $17k is a lot for tuition at a state U, but that cost doesn’t deter working while in school. A lot of students hold down jobs and get where they need to in life. I worked 3 in college. At least from the residency side, I always asked people about any job experience during college and/or medical school because I could get a grasp for how prepared those individuals were.
If keeping costs down is a big factor (as it should be), what about community college or doing a bunch AP courses/dual enrollment? If you want your kids to focus on the important material in college and retain it, go ahead and knock out the low yield/101 courses while in high school or at a CC.
I will encourage my kids to consider college part-time while working part-time. Combine book knowledge with life experience. I don’t see why someone has to graduate college at 21-22 if they aren’t sure of their calling in life.
If, at age 17-18 they’ve somehow TRULY figured their lives out then they will know the best path to get there (financing the degree, school ROI, best side jobs/externships, etc.)
I did pre-Med then Med school without really knowing if it was my calling. People would ask and I would say ‘ask me five years after I finish Med school.’ I felt a certain sense of duty, and hadn’t been exposed to much else.
Medicine has worked out fine (love to go to work as much as the next person does) although my salaries were on the low end compared to other physicians, including my father. Fortunately (for me), our relationships with money are different.
Like most “K-MD” attendings I lacked life experience and made a few financial mistakes. There will undoubtedly be opportunities to make more mistakes.
Some parents push college on their kids, assuming that wonderful opportunities await everyone with a bachelor’s degree.
Same goes for certain graduate degrees: JD, MBA, PhD, and even MD/DO.
interesting idea. that could definitely add some valuable life experience. I agree with you that college or professional school will have better ROI if you have a clear idea of what you are aiming for. I wonder if that schedule that you propose would be compatible with having a scholarship? — just don’t know if you are required to be a full-time student for the typical scholarship granted by a university. but there are probably some scenarios where you could make it work out…maybe just take enough credits to be considered be full-time but with a schedule that leaves enough time to get the kind of work experience that you suggest. BTW, what is a “K-MD”
Full time student is only 12 credits a semester. That is pretty easy to achieve and work part time. Typical premed scheduled when I was in school was 18-20 credits and several of us worked in addition to that.
I played college sports, worked part-time, and managed a 3.8, graduating in 4 years (about 16 credits per semester.) I just don’t buy that most college students can’t work at least a little.
I’ll jump on the work bandwagon and say it is very possible and it was a huge benefit going forward. Worked full-time hours (35 hours, 5×7) through the entire year. All 4 years of college. It was out of necessity; I needed money to buy a car, to pay for school and groceries around the house. Always had 17 credits with the exception of the final semester. Fortunately had a job that allowed me to have a flexible schedule, and make up hours at night after classes ended. The last year of college I got a job as an EMT on Saturdays (in addition to my normal job) once I got certified to get some experience before med school. That added a 12 hour shift per week.
I leveraged this work experience on applications and interviews. While many interviewers really love those applicants that have early research and medical missions, occasionally I would run into some that were highly impressed with a college student working as much as I did, as it is not something they encounter much.
My only regret is I didn’t have more time for fun and partying. I mean I did have some great times, but it in no way was the “classic” college experience that a lot of my buddies had. It worked out for the better though.
I’ll second WCI. I carried a full load at Stanford, worked 10 hours a week during school and had a full time job in a plywood mill every summer. I also had a part time job during medical school as well as a Navy scholarship. You can go to school full time and earn some money along the way.
Dr. Cory S. Fawcett
Prescription for Financial Success
“K-MD” refers to one who goes straight through school from Kindergarten through medical school. I actually first heard the reference in regards to law students (“K-JD”)
Not everyone goes straight through. In my medical school about half the class was over age thirty, and came from other careers. Years later, while working my way through law school (while practicing medicine) I was in an evening section of other working adults and/or parents.
If one is laser-focused on medical school at a young age then yes he/she can work part-time (10 hours per week is fine) during the school year and full-time during the summer. But why stop classes at all during the summer if one has this focus and is trying to reach the goal as soon as possible?
My point about part-time work (or it could be full-time and take 4-8 college credits) is that there is not only one path to success. The job might lead to another opportunity outside of the intended academic pathway. Didn’t Bill Gates follow that route, dropping out of Harvard completely?
I think most doctors fall into the “get it right enough” category, in my (admittedly niche) experience. They save, but only 10-20% most of their careers. They buy real estate and end up building lots of equity over time, but they buy way too much house (and too many houses). They finance everything and rarely pay off loans early. They have the country club luxury car McMansion lifestyle, but they work until 65-75 (or will have to without a dramatic lifestyle cut in retirement).
I’m a private banker and have worked with dozens of physicians over the years in Dallas. Granted, that’s a specific geography, but it’s a fairly MCOLA city representative of many if not most urban areas in the US. Some were just starting out (applying for a physician mortgage with 0% down), but most were well into a career (applying for a lake house construction loan, a loan to buy into a surgery center or other business endeavor, a high 5 figure car loan, or any other thing). A few had 7 figure incomes, but most were in the mid/low 6 figure range. Most appear to live paycheck to paycheck just like most of the rest of America; they just have a bigger paycheck (and the ability to borrow relatively cheaply for most anything).
A key ingredient in preventing one of the disaster scenarios is knowing yourself and being honest with your abilities. Some people are terrible at marriage. And that’s okay. What’s not okay is being married six times, ruining a bunch of people’s lives, and ruining your own life because you can’t admit that it just doesn’t work for you.
Same thing as being a business owner. I know several people who are great doctors but couldn’t run a lemonade stand. Yet they keep trying and failing, even later in life in what should be their retirement years. It’s really sad to watch, but I’ve learned so much about how to live a good life by observing these people and seeing what not to do.