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It may be harder for primary care physicians to reach Financial Independence.

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  • It may be harder for primary care physicians to reach Financial Independence.

    What do you think?  On average they make less money and so that is likely true.  On the other hand many PCPs seem to have a more modest lifestyle.  Many have less expensive hobbies and have lower financial expectations.  I know a few who have done very well for themselves.  I know an orthopedic spine surgeon who has seven high-end cars and another who owns a plane.  I have a PCP friend who takes every Wednesday off and uses much of that time to pursue reading and investing.  He has done very well for himself.  Any of you PCPs out there who would like to share your struggles or your success?   I spoke to Family Practice residents about personal finance and investing.  The talk was well received and there was tremendous interest in the topic.  My presentation may not have been the greatest but I will share it here in case there is interest: http://wealthydoc.com/blog/wealthy-doc-gave-a-talk-to-fps-about-finance-investing  You can click on the picture to advance the slides (little arrow in the upper right of the slides).

  • #2
    I enjoyed the slides - it would have been nice to hear what you said :-) but it appears that you packed a lot of good information in.

    If I could make one suggestion (other than the obvious bond comment), it would be to clarify that people need a Fee-Only advisor, not a Fee-Based Advisor. Fee-Based advisors are NOT Fee-Only advisors. They can sell commission-based products, take referral fees, be paid by mutual funds for representing their products, etc.

    The reason they created the descriptor "Fee-Based" is to confuse smart people like you. It works quite well because I get this from doctors all the time: "I called you because I want to work with a Fee-Based advisor!" If you find an advisor who refers to himself as Fee-Based, you can be sure that you are not using a Fee-Only advisor. Please help spread the word.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3




      I enjoyed the slides – it would have been nice to hear what you said ? but it appears that you packed a lot of good information in.

      If I could make one suggestion (other than the obvious bond comment), it would be to clarify that people need a Fee-Only advisor, not a Fee-Based Advisor. Fee-Based advisors are NOT Fee-Only advisors. They can sell commission-based products, take referral fees, be paid by mutual funds for representing their products, etc.

      The reason they created the descriptor “Fee-Based” is to confuse smart people like you. It works quite well because I get this from doctors all the time: “I called you because I want to work with a Fee-Based advisor!” If you find an advisor who refers to himself as Fee-Based, you can be sure that you are not using a Fee-Only advisor. Please help spread the word.
      Click to expand...


      Thanks Johanna,

      I actually did know that at one point but I get tripped up, forget, or get sloppy with my diction at times.  I can't be reminded too much.

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      • #4
        Yea, I got burned by the "fee-based" thing so I can totally understand how someone else might.

        As far as PCPs, I think they do have a harder time becoming FI because the cost to become a doc is exactly the same, but the salary might be much lower than another field.

        Say PCPs spend less or whatever is a lame excuse. They spend less because they make less, not because they're fundamentally different from a specialist. Triple FP salaries and they'd spend like orthopedists.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5




          Yea, I got burned by the “fee-based” thing so I can totally understand how someone else might.

          As far as PCPs, I think they do have a harder time becoming FI because the cost to become a doc is exactly the same, but the salary might be much lower than another field.

          Say PCPs spend less or whatever is a lame excuse. They spend less because they make less, not because they’re fundamentally different from a specialist. Triple FP salaries and they’d spend like orthopedists.
          Click to expand...


          Well sort of.  I wouldn't say the cost is "exactly" the same.  In our area at least family doctors can start with a sign-on bonus and often around 200K after only 3 years of training.  Most specialist have to wait much longer before earning a "doctor-type" salary.  I'm sure if they earned more they would spend more.  I guess what I was saying is I hear some FPs say "I could never get rich or do well financially because PCP salaries are so low."  I have heard this even from residents who have minimal or no loans at all.  I think it is possible to achieve FI even on an income of 200K or less.  Many throughout the country (especially in other careers) have done just that.  The game becomes more one of "defense" (planning, saving, investing, watching costs) than "offense" (salary/income).

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          • #6
            It's awfully hard for us humans to decouple income from spending. They don't have to be correlated, but human behavior shows that the correlation is fairly strong for most. FWIW, I've looked at the time to FI with various salaries ($200k, $300k, $400k, $500k) on the same budget of $100k. Table attached, and full post here.

            At the low end (think FP), FI is achieved in 19 to 28 years with real returns of 2% to 6%

            At the high end (ortho, etc...) FI is achieved in 8 or 9 years with the same investment returns.

            Best,

            -PoF

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            • #7
              I think some primary care docs (and specialists) have a bit of apathy.  Sure it is tougher the less salary you get, but there are lots of options to increase income like picking up moonlighting opportunities and leveraging mid-levels.

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              • #8
                Many PCP's sell themselves short. There are opportunities in primary care to make 50% - 150% more than the "average" PCP. My experience suggests this can be done without seeing a gazillion patients a day (we all have heard of that solo guy seeing 60/day). The higher pay in our practice stems from leveraging geography/COL (north Alabama), practice structure (democratic), practice size (economies of scale), ancillary services (including procedures that are available due the paucity of sub-specialists in the area), side gigs (hospice and prison consulting, imaging center, etc) and mid-levels. A PCP in an urban, hospital-owned practice is sacrificing more income than they likely know.

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                • #9
                  No personal experience, but do know a few colleagues (<5 years out of training) as well as older family members that are PCP's and they all seem to do ok.  The younger ones got job offers of at least $200k all across the country, and the older PCP's are still seeing a ton of patients and are making specialists salary and spend accordingly (expensive homes, private schools, etc.)  Nevertheless, I think good money can still be made in primary care, enough to become FI, though possibly at a slower rate.

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                  • #10
                    I'm a FP doc in CA.  WealthyDoc is correct.  I have personal experience, it does take longer time to reach financial independence as primary care doc in CA because average FP income is on the low end of salary spectrum. CA has high cost of living with high state income tax.  I don't see any FP friends drive Lamborghini or Porsche cars around.  But I don't feel sorry about my field at all.  FP hours are better than other specialists. There are no overnight, and no calls. I'm generally very happy at work.   If being super rich is the ultimate goal in life, I will feel like I have failed living this life.  I am not envious at those who are super rich though. They do well. Good for them.

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