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How Are Physicians Doing Financially? 4 Surprising Stats and Trends

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  • How Are Physicians Doing Financially? 4 Surprising Stats and Trends

    https://www.doximity.com/doc_news/v2/entries/4762483?_eda_link_uuid=5d6d5784-dfd0-4481-9511-13a0977908a5&_r=1&_ref=digest&clicked=true&positio n=4&signature=a1fddfd92e4b68e7f14d0b2de78c760cc8ae 8ddb&source=email_doc_news%3A%3Amedical_business_d igest&token=5e002e254fa6df484934a71870e978a8062326 87&user_id_hash=93534008fe7265594565021977a6c7b882 581e52&login_from_email=Skostadinov%40wihri.org

  • #2
    Alright, I bit. Not much new (there that I can see), is there? Any particular reason these w/b called "crazy stats" (other than the obvious)?
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      I never cease to be amazed at how unprepared doctors are and how little they manage to save and invest.  e.g. that only 4% have >3M in their forties.  There were quite a few surprises in that report for me.  More here:  http://wealthydoc.com/blog/are-you-financially-prepared And there doesn't seem to be any improvement in financial knowledge (even a decline) despite all the work from WCI and other bloggers/authors.

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      • #4




        I think u are asking too much of docs if you expect > 3 mil in 40s.
        Click to expand...


        Yes, I guess I would agree with you on that, Rex.  I was just thinking that doctors should have a goal of FI.  For many doctors an income of 10K per month would allow FI.  10k/mo x 12 mo = 120/year.  120k/yr x 25 = 3M.  Striving for 3M by age 50 would be doable for many if not most physicians.  It is hard to work at a goal like that for 20 years (age 30-50) but it can be done.  I was able to do it despite working in academia and other activities that didn't maximize my profit.  Nevertheless I probably didn't pick the most surprising fact from that survey.  I personally think there were a lot of them.  For example:

        Only ½ have an updated will! (47% in 40s and 56% in 50s)
        18% are “very knowledgeable” about personal finance.
        1/3 of doctors in their 40s and 50s don’t max out their 401k/403b.


        I have a few others at the link http://wealthydoc.com/blog/are-you-financially-prepared, so I won't reprint them all here.

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        • #5
          Those numbers are fine but doctors dont come out making money at 25, or nowadays, without significant loan burdens. I was 36 when I got out and even then its only a partial year. Yes the pay is larger, but the net is lower, bills, etc...I'll still be totally fine, but unsure about 3m in my late forties unless the market performs exceptionally well. Definitely something to shoot for of course.

          None of this is counting real estate or their own house correct? That would change the overall scenario significantly, even for myself as I'd already be near a million all told in a couple years, but I dont count it myself. Im sure their net worth/overall asset base is higher, or rather I hope it is.

          I should have done a specialty with less years of training basically, or no fellowship.

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          • #6
            Yep, I'd need a new specialty and to live somewhere cheaper to reach 3m in my 40s. That's just not going to happen. Would be nice though!

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            • #7







              I think u are asking too much of docs if you expect > 3 mil in 40s.
              Click to expand…


              Yes, I guess I would agree with you on that, Rex.  I was just thinking that doctors should have a goal of FI.  For many doctors an income of 10K per month would allow FI.  10k/mo x 12 mo = 120/year.  120k/yr x 25 = 3M.  Striving for 3M by age 50 would be doable for many if not most physicians.  It is hard to work at a goal like that for 20 years (age 30-50) but it can be done.  I was able to do it despite working in academia and other activities that didn’t maximize my profit.  Nevertheless I probably didn’t pick the most surprising fact from that survey.  I personally think there were a lot of them.  For example:

               
              Click to expand...


              Unless you've discovered some way to earn $125k per year and not spend any of it, not have any of it go to taxes, and have all of it in tax-protected accounts/holdings, I don't see how you can get a net worth of >3 mil at that age.  I could see a very high earner living a non-lavish lifestyle age and saving being able to do it, but add in taxes, kids, and basic living expenses (non McMansion) that goal is hard to reach.  I graduated fellowship at 33 with a positive net worth and save regularly, but by the standards of this website I'm not a supersaver and doubt I'll hit 3M at age 50 (though I have to go back and look -- maybe I'll get close if the market does okay).
              An alt-brown look at medicine, money, faith, & family
              www.RogueDadMD.com

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              • #8
                My net worth (including house equity) just became positive...I'm gonna throw a party costing exactly the positive portion, now.  Everyone's invited.

                We're not all so fortunate to come out of the gate at age 29 with $400,000/year incomes and no debt.  I've still got $350,000 in liabilities (mortgage and student debt).  I'll finish fellowship just before my 34th birthday.  Assuming we get 6%/year, my wife's income stays the same when I get out of the military just before my 40th birthday, and we continue our current fairly high rate for our incomes, I'll have just over $500k saved at that time.

                Let's say I'm on my absolute last day of my 40s (49 yrs, 364 days), and I actually make a respectable income in my field (average is around $300k for you ************************ civilians), and we put away 25% of it (if my wife lets me); we'd have $3.2 mil in investments (not counting house) on that day, and I'd hit $3 mil sometime during age 48.

                I think it's a great goal to have, and is probably achievable for the average person, but the average-earning Peds and FM among us (no shade at you; just lowest-earning according to Medscape at about $205k/yr) without a high-earning spouse is going to have a really hard time getting there.

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                • #9
                  3M net worth would be hard. 3M in assets might not be so hard if you count your house and maybe an investment property or two.

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                  • #10
                    The "$3M in the 40's" is very loaded.

                    $3M by 40 is very unusual.

                    $3M by 49 1/2 is very doable, or at least has been in the past.

                    The forties are a key decade for wiping out debt (positive), hitting one's earning stride (positive), but also dealing with the expenses related to children (negative contribution to net worth).

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                    • #11
                      "...the 2016 report shows that 35% of physicians in their 30s have less than $50,000 in savings for retirement. "

                      Again, very misleading. Many (? most) in the early thirties are still in training. By the late 30's, most should have had the opportunity to put a significant dent in their retirement savings, $1-1.5M by age 40 is within reach for many, especially if they are in a higher paying specialty and their loan burden is not excessive.

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                      • #12
                        All that is true. The other thing thats true is that even if you arent there by then it wont be too far behind. As your debt gets eliminated and mortgages and the like dwindle away, you can go from negative----------->zero----->positive-->largely positive quickly as those assets start contributing to your NW and liabilities are naturally rolled off.

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                        • #13
                          Maybe too many of my friends are orthopedic surgeons or neurosurgeons but the path to multimillionaire doesn't seem that uncommon among my peers.  1M by age 35-37.  2M in early 40's.  2.5 - 3 M by late 40's or early 50's seems doable for many if not most.  The key is the first few years of practice where they need to dig out of debt and be frugal and invest like mad.  Accumulating additional capital later seems to get much easier.  As the multiple incomes streams grow and job income increases and investment opportunities pop up there is a growing momentum to wealth building.  It may be an obnoxious cliche but it is true that making the first million is the hardest.

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                          • #14




                            Maybe too many of my friends are orthopedic surgeons or neurosurgeons but the path to multimillionaire doesn’t seem that uncommon among my peers.  1M by age 35-37.  2M in early 40’s.  2.5 – 3 M by late 40’s or early 50’s seems doable for many if not most.  The key is the first few years of practice where they need to dig out of debt and be frugal and invest like mad.  Accumulating additional capital later seems to get much easier.  As the multiple incomes streams grow and job income increases and investment opportunities pop up there is a growing momentum to wealth building.  It may be an obnoxious cliche but it is true that making the first million is the hardest.
                            Click to expand...


                            It would be better if we can get stats by year out of residency, NOT by age. I finished residency at age 38. 1 year later I've managed to stash away > $50K into retirement accounts, not including starting to pay off student loans and have a small but growing emergency fund all in a pretty high HCOL. My goal is to get to the first million within 10 years.

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                            • #15




                              Maybe too many of my friends are orthopedic surgeons or neurosurgeons but the path to multimillionaire doesn’t seem that uncommon among my peers.  1M by age 35-37.  2M in early 40’s.  2.5 – 3 M by late 40’s or early 50’s seems doable for many if not most.  The key is the first few years of practice where they need to dig out of debt and be frugal and invest like mad.  Accumulating additional capital later seems to get much easier.  As the multiple incomes streams grow and job income increases and investment opportunities pop up there is a growing momentum to wealth building.  It may be an obnoxious cliche but it is true that making the first million is the hardest.
                              Click to expand...


                              Maybe I was a year or two late, but my residency/fellowship was not too much longer than ortho (but each year hits large) and similar to neuro (but they have high salaries of course) but find it hard to believe outside of some financial assistance (no student loans) are clearing 1M @35. That was my first 6 months in practice. Sure a neuro not living crazy could do  so by late 30s, but for most lower paid and longer residency specialties it would be hard.

                              There are those sweet spot specialties like ER, gas, and rads that allow one time and ability to moonlight/work with more than 1 employer that can really give one a head start as well. Med school never does tell you how important choice of specialty really is, how each year in training impacts your compounding and to maximize each additional year so it actually increases earnings, and all kinds of real life nuance. Oh well, the next generation will have all kinds of info at their fingertips to learn these things.

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