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Are you in the top 1%

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  • Are you in the top 1%

    "one-percenters" got a bashing in the last economic recession.  Many physician specialists are in this group.  Despite the protests though we have little or no political or economic clout (at least as an individual).  I recently dug around to see what the 1% even is and I found it interesting.  You get different numbers from different sources but there is some consistency.  I hate to hear doctors complaining about money or pay cuts.  All the doctors I know are in the top 5% of US or higher (around 215K).  Most specialists I know are in the top 1-2% of U.S. based in income or assets.  Here are a few of those points I ran across:

    World wide top 1% income: 32K

    World wide top 1% net worth: 770K

    Top 1% US income: 360-440K

    Top 1% US net worth: 4-7M

    Doctors do very well in the US, especially when compared to the rest of the world.  Nevertheless, it is the 0.01% (worth 125M) who really have the political influence in the U.S.

    For more if interested:

    http://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/

    http://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp

    http://wealthydoc.com/blog/how-rich-is-rich

  • #2
    Nope.

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    • #3
      Docs may often approach top 1% in income, and a minority of the supersavers approach US 1% net worth BUT we......

      1). Sacrifice years of earnings and retirement savings during training at slave wages.
      2) Accumulate massive debt
      3). For these troubles and sacrifice, start off our productive years at a very negative net worth, but still have the crap taxed out of us by the government to the tune of over 50%+ when all federal income, state income, sales, SS, Medicare, unemployment, and double corporate FICA taxes are imposed.
      4). Is this mid 30s MD with 500,000+ student loan, almost as negative a net worth, and neglible retirement savings truly a "top 1 percenter"? Sigh...
      5). Yet those that inherit massive wealth and don't work can largely avoid taxation.

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      • #4
        Well if 4-7 mill means welcome to the top 1% then I guess I made it.  I certainly don't feel rich however.

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        • #5




          Well if 4-7 mill means welcome to the top 1% then I guess I made it.  I certainly don’t feel rich however.
          Click to expand...


          I hear ya.  There are always richer people, no matter where you are on the wealth scale.  Per Thorp's analysis (which was pretty rigorous) that net worth value of 1% is the 4M level.  That is definitely obtainable for late-middle or end career for a specialist who made good money choices.  That is the target for FI for many of us since it would generate 160K at the 4% SWR.  Most doctors have no hope of reaching those higher levels discussed on my blog post unless they hit a non-clinical jackpot with a patent, biotech start-up, VC, etc.

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          • #6
            Most docs are on the very lowest rung of the 1%, at best.  Warren Buffett we are not (and in most cases, never will be).

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            • #7
              The big difference for physicians is the income vs. net worth. While many are in the top 1% in income most do not reach those net worth numbers until late career, if ever. This is the great difference most people don't understand. Just because you have a high income for a short duration of time (starting later and with great amounts of initial debt burden) does not automatically mean you are "rich" or wealthy by many standards. Now if you are on this forum and follow WCI style it's likely you will be, but it may not happen in your 30s or 40s like non physicians at similar income levels.

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              • #8
                I think of it this way

                1. Lowest level: your neighbors, doctors, possibly dual teachers etc - retirement account + home equity. Mostly people on this blog.

                2. Next level: Making money from mony - the patels, the 2-3 small business/shop owner, or some dude who hit it big and is generating ..uh..lets say 500K in complete passive income. Wakes up, sleeps etc, makes that without doing anything active. Doctor stops working, stops earning. Not in this class (can get there with LARGE nest egg ... very very few from clinical income; suppose high end specialists who started early savings can).

                3. Realy F rich: That F is for filthy. Dropping dollars on expensive resturaunt like it aint a thing. 50K watch? Ferrari? Yea got that. Making lets say 2+mill a year. NW of 25 mill+

                4. The real top i.e. 0.01% ers or the baby Rockafellarz: 10+ mill income. 100+ mill NW. Enough said. They own that mall your wife frequents.

                5. Real real real top - ehh lets say 0.001%? These are you Zuckerberg, Musk, etc etc. Billionaires. On all the lists.

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                • #9
                  I was feeling really good today until I read this thread

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                  • #10
                    Doctors are interesting because many have the income to hit the top 1% at a young age but to achieve the net worth figure for most requires aggressive savings. I achieved newbie 2 from ob/gyn and aggressive savings in the 30s and fourties.  Level 3 for me would require a powerball win.  I had the wrong parents for level 4.  Level 5 requires a patent and a business plan hatched in college and a successful ipo.

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                    • #11




                      I was feeling really good today until I read this thread ?
                      Click to expand...


                      Too funny.

                      We just have to keep reminding ourselves of the drivers of happiness.  A number on this scale isn't one of them.

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                      • #12

                        There are about 7.5 billion people on the planet. I hate paying taxes as much as the next guy and we all worked hard to get where we are today. However, I would suggest if you look at that worldwide 1% number and all you can think about is climbing higher up among the 50 million and not how much better off you are than the 7.45 billion, you might be thinking about this all wrong. Half the 1% in the world live in the US. Being born here is a good start.

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                        • #13
                          We were fortunate enough to just getting into 1% income for the first decade until wife decided to hang it up and be a full time mom.

                          We're just skirting the net worth now and on 'cruise control' for the next 10-20years.  Beach bum -Retire Early station coming up about 8-10 years depending on kids postgrad and insurance situation

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                          • #14







                            Well if 4-7 mill means welcome to the top 1% then I guess I made it.  I certainly don’t feel rich however.
                            Click to expand…


                            I hear ya.  There are always richer people, no matter where you are on the wealth scale.  Per Thorp’s analysis (which was pretty rigorous) that net worth value of 1% is the 4M level.  That is definitely obtainable for late-middle or end career for a specialist who made good money choices.  That is the target for FI for many of us since it would generate 160K at the 4% SWR.  Most doctors have no hope of reaching those higher levels discussed on my blog post unless they hit a non-clinical jackpot with a patent, biotech start-up, VC, etc.
                            Click to expand...


                            Sure except the time value is not taken into account or given proper weight. As you mentioned, attainable for late-middle or end career specialist. 

                            Point I'm trying to make is that the accumulation for an MD/preofessional or level 1 (see above) takes time. Which really is a big "drag". Enjoying 4 million in 60's < In 40s.

                             

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                            • #15










                              Well if 4-7 mill means welcome to the top 1% then I guess I made it.  I certainly don’t feel rich however.
                              Click to expand…


                              I hear ya.  There are always richer people, no matter where you are on the wealth scale.  Per Thorp’s analysis (which was pretty rigorous) that net worth value of 1% is the 4M level.  That is definitely obtainable for late-middle or end career for a specialist who made good money choices.  That is the target for FI for many of us since it would generate 160K at the 4% SWR.  Most doctors have no hope of reaching those higher levels discussed on my blog post unless they hit a non-clinical jackpot with a patent, biotech start-up, VC, etc.
                              Click to expand…


                              Sure except the time value is not taken into account or given proper weight. As you mentioned, attainable for late-middle or end career specialist. 

                              Point I’m trying to make is that the accumulation for an MD/preofessional or level 1 (see above) takes time. Which really is a big “drag”. Enjoying 4 million in 60’s < In 40s.

                               
                              Click to expand...


                              What's also interesting is that if you hit $4M in your 40's, you still may not have enough to hang it up, assuming that you have children to raise, educate, and launch. My retirement target was $4M, which we hit a few years ago, but our ongoing expenses, especially related to the kids, were such that it would be way too risky to stop working at that point. So $4M in your 60's may be better than $4M in your 40's, in a convoluted fashion.

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