A question for other non trads

[ChandutheMagici]

So here I was reading good ol' SDN when I came across vtucci's post that said..

If $$$ is your motivator, unless you go into plastic surgery or some other of the most competitive fields, you will not be happy. Keep in mind even if you want to be a plastic surgeon, you need the grades and the step scores to accomplish that task and should plan accordingly before starting medical school.

In order to not hijack that thread I'm starting this one.

First of all, I completely agree with Vtucci in that money should not be your motivator. For me personally, it's job satisfaction.

Secondly, I've heard phrases like this (on this forum) numerous times. That if you want money or that's why you're getting into medicine (which, lets be honest, it is for quite a few people) then you need to go into one of these super duper competitive residencies.

I guess my question is, and what I really don't understand, how people don't consider 160k a lot of money? According to

http://www.allied-physicians.com/salary_surveys/physician-salaries.htm

That's what the average FP guy makes without OB and less than two years of practice. If I'm doing the math correctly, lets see here

160,000 x .4(the max they could ever take out for taxes) = 64,000

160, 000 - 64,000 = 96,000 a year

That means per month you'd be making 8 grand. I'm sorry, but that seems like a hell of a lot of money to me. The most my wife and I ever made together post taxes was roughly 6000 (together) a month and we were making double car payments, paying on principle to our mortgage, saving money, and going on vacations.

Sure, you're not going to be the next Donald Trump, but 8k a month is a pretty nice life. Not to mention the FP I worked for was easily raking in 300k in his private practice setting. So it's not like you're stuck at this forever. Maybe my idea of a lot of money is relative, I don't know.

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[student1799]

So here I was reading good ol' SDN when I came across vtucci's post that said..



In order to not hijack that thread I'm starting this one.

First of all, I completely agree with Vtucci in that money should not be your motivator. For me personally, it's job satisfaction.

Secondly, I've heard phrases like this (on this forum) numerous times. That if you want money or that's why you're getting into medicine (which, lets be honest, it is for quite a few people) then you need to go into one of these super duper competitive residencies.

I guess my question is, and what I really don't understand, how people don't consider 160k a lot of money? According to

http://www.allied-physicians.com/salary_surveys/physician-salaries.htm

That's what the average FP guy makes without OB and less than two years of practice. If I'm doing the math correctly, lets see here

160,000 x .4(the max they could ever take out for taxes) = 64,000

160, 000 - 64,000 = 96,000 a year

That means per month you'd be making 8 grand. I'm sorry, but that seems like a hell of a lot of money to me. The most my wife and I ever made together post taxes was roughly 6000 (together) a month and we were making double car payments, paying on principle to our mortgage, saving money, and going on vacations.

Sure, you're not going to be the next Donald Trump, but 8k a month is a pretty nice life. Not to mention the FP I worked for was easily raking in 300k in his private practice setting. So it's not like you're stuck at this forever. Maybe my idea of a lot of money is relative, I don't know.

I worked in a high-paying profession (Wall Street) for 20 years and quit to do this instead, so you can see that money isn't what makes me tick. (If it was, I'd be nuts to do this, because leaving a lucrative profession for medicine is economic suicide.) But I heartily agree with vtucci's observation that medicine isn't terribly rewarding from a financial point of view.

First of all, you have to consider where you want to live. If you are in a rural or low-cost area like the Midwest, $160K is a nice living. But in a major urban area like NYC, Chicago or San Francisco, it's peanuts. I live in NYC myself, and TWO people each making $160K would barely be able to afford a decent-sized Manhattan apartment, let alone pay for child care, private schools, etc. (Just recently, I heard a story on the news radio about a recent government study which determined that to be "middle class" in New York, a family needed to make at least $150K.)

Second, you have to consider your opportunity cost to enter medicine: the tuition you have to pay during med school, as well as the years of depressed earnings you must put in during residency. (And if you're switiching careeers, your opportunity cost would include the money your could have made in your old profession during med school and residency.) Med school is longer than any other professional school, and is the only profession to require additional years of extremely low-paid work before the graduate is considered fully qualified. If you went into business or law, your total tuition expenses would be 25-50% less, and you would start earning good money immediately after professional school; on top of that, these professions generally pay significantly more than medicine even in the peak earning years. And when you consider that physicians generally have less leisure time and less control over their hours than other professionals, you'd expect them to earn more, not less.

I'm doing this for love, but I can't help wondering why medicine has to demand so much economic as well as non-economic sacrifice from its practitioners. We must give up huge parts of our lives for premed studies, med school, residency and day-to-day medical practice, yet the earnings are looking increasingly paltry compared to the opportunity costs (which continue to rise at double-digit rates). I really do ask myself how anyone can afford to go into this profession.

 

[vtucci]

How do we consider 160K to not be a lot of money?

Simple, many of us will have close to 200K in student loan debt-- this results in 1400+/month of student loan payments.

You will also needs to factor in taxes and rent, other expenses (some hospitals require that you pay for parking- in Boston it was 135/wk!!!). Oh and BTW when I lived in NYC as an attorney, I had 63% taken out in city, state and federal taxes so the figure of .40 is not always correct for max taxes.

In addition, many other careers, law for example, can make far more than 160K. I started off at 140K as a first year attorney. By year 5, many attorneys are making 250-300K. Law school is one year shorter than medical school and does not have residency or a similar set up for apprenticeship where new attorneys make 40K per year for 3-9 years.

 

[vtucci]

Depending on the state, malpractice premiums may be really high as well.

As a FP, you will also have office and staff overhead to pay for. 300K sounds great unless you have >100K for office overhead.

 

[ChandutheMagici]

Okay, so don't live in New York then . It seems to be a pretty high cost of living area. I guess that's why my view is relative. My in-laws for instance live on less than 160k combined (or maybe right around there) and they have a very nice life (Vacations, Great home, Nice cars, Hot tub ) However, they also live in Mid-Michigan. Perhaps I just don't see the benefit of living in an urban type environment. It seems like the cons far outweigh the pros.

The opportunity cost I certainly understand. Even so, with 200k in debt as vtucci put it, that's 1400 a month. So you're still making 6600 dollars a month.

And dang, you guys must have been or know some pretty good attorneys . My friend who graduated from U of M Law school made nowhere near that when he came out.

Chandu

P.S. - 63% in taxes and 135 per week in parking...whew, no way will I move to a big city.
P.P.S. - He was easily making 300k after overhead. I actually quoted 300k as a low ball figure. He had a patient base of about 5000, did different therapies, and different procedures. He was a pretty business savvy guy.

 

[student1799]

Okay, so don't live in New York then

What if we live here already? The Midwest is home to you, New York is home to me.

And what is a place like New York supposed to do for doctors, if they have to be content with $160K in wages? The fact is, even though practicing physicians in this region do make somewhat more than the national average, it isn't really enough to cover the differential in the cost of living. And in the case of residency, there's barely any difference at all in salaries between high-and low-cost areas (<10% differential), while the cost of living in those same areas can vary by 100% or more.

 

[ChandutheMagici]

What if we live here already? The Midwest is home to you, New York is home to me.

And what is a place like New York supposed to do for doctors, if they have to be content with $160K in wages? The fact is, even though practicing physicians in this region do make somewhat more than the national average, it isn't really enough to cover the differential in the cost of living. And in the case of residency, there's barely any difference at all in salaries between high-and low-cost areas (<10% differential), while the cost of living in those same areas can vary by 100% or more.

I wasn't trying to instigate a fight. I was seriously wanting to know. It seems that you're being a bit defensive. And if you're asking me seriously, I would move. I mean it. If it cost that much to live compared to what I made as a physician, the choice would be made for me. It seems pretty simple, cons>pros = time to go.

The fact remains in the majority of places in the United States, 160 grand is a lot of money. And I think I speak on a high ground concerning this one as I have lived in 7 different states. Also, my father has lived in two states that I have not (Seattle, Wa and Denver, Co), made nowhere near 160k at either place, and managed to live quite comfortably. I think your perspective might be a bit narrow.

Chandu

 

[CremasterFlash]

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[Pghboy18]

Good post. It is unfortunate for docs that medicine is not an efficient market.

 

[student1799]

>500 sq ft per family member

I completely agreed with your post, but the above phrase had me on the floor laughing. In Manhattan, 500 sq ft per person is the impossible dream, unless you're seriously well off. When my husband and I were first married, we SHARED a 250 sq ft studio, and many one-bedroom apartments (800-1,000 sq ft) are shared by 2 or even 3 people (extra walls are put up to subdivide the living room into more bedrooms).

But I guess even those cramped quarters are luxurious to someone from Hong Kong; I read tonight that their apartments average 32 sq ft per person of living space.

 

[Scottish Chap]

Agree with vtucci. This is a career that should not be entered unless you are comfortable with working very hard and having a huge debt burden that takes years to clear. I'm going into a "lower paying specialty" because it's what I'm good at and it's something I enjoy. That's why I came to medical school. Medical students start residency with a massive debt burden with compounding interest. By the time you're in the position to make a realistic dent in 200K borrowed, it is 400-600K at the end of payback and, if you're older with a family to support, you can see it takes time. You'll never starve, though, so keep it all in perspective.

 

[njbmd]

If you are not currently completing residency, those figures that you are "salivating" over are very likely not going to apply to you. The health care system in this country is changing. Reimbursements to physicians are due to drop again. Anything past does not predict the future.

When I came out of medical school, I had $40K in debt at 2% interest. My guess is that most people coming out today will not be in the same situation. The other thing is that even I won't make as much money in medicine as a sub-specialty surgeon as my father did as an internist because the system that I practice under is quite different. He had zero debt and ran his own private practice without any third party payers for the most part.

I am not in any danger of ending up on the poverty line but medicine is not a one-way ticket to prosperity. You have to consider the entire picture and you have to be realistic. In short, you can't count your chickens before they have hatched because the fox is in the hen house and you might not have any hens or any eggs for that matter.

Go into medicine because you love the career and are suited to practice well. Any other reasons are not very sound judgement at this point because you can't count on what is going to be out there by the time you get to practice especially if you haven't started medical school or residency at this point. Our entire payment system and health care system is about to be changed radically. How do I know this? I am one of those people making the changes.

 

[student1799]

When I came out of medical school, I had $40K in debt at 2% interest. My guess is that most people coming out today will not be in the same situation.

No need to guess: it's a fact. The interest on Stafford (government) loans for med school is 6.8%, and the average student borrows about $150K. And this is on top of the debt that many people already have from college.

There's no question that our parents' generation had it better than we did economically, but the comparison is even more skewed when we look at physicians, because the education is so expensive and virtually the entire cost must be borrowed.

 

[zebalong]

don't forget as well that compared to your law school friend, you have to complete at the very LEAST an extra year of school + 3 years of residency... if he is pretty good at what he does, when hes 4 years into it he'll be making around the same amount of $ + he will have had 4 years past of earning potential. And when you are done with residency.. esp for us non trads who will be finish later in life, if we don't own a house already we will probably be looking to set roots down (at the very VERY earliest i would finish around 35ish = want to settle down somewhere), and quite frankly bills add up when you factor in med school debt... 160 = not much.. im leaving my job that pays more then that to pursue this. I'll probably never recoup the loss in earning potential + med school debt even if i do very well in medicine.

Something non-trads are good at doing is crunching numbers!
If i do GP with a 3 year residency + 4 years of med school that is a total of 7 years of loss earning potential. I average around 150 a year right now so thats 7 x 150k = 1.05 million dollars
Plus approx 200k in debt for med school (im CA and if im LUCKY to get into a UC it'll be less but can't count on that so probably will have to be private, if you do state school yours will be cheaper in this part of the calculation.) that is 1.25 million dollars
earning 40k x 3 years for residency = 120k earned

1.13 million dollars total cost of pursuing medicine just to end up with the same salary i would have if i decided to continue with my current career, which despite the economic turn down is still VERY stable. So 160k for some of us really doesn't help make up any of the $ it costs to pursue this which can lead to the conclusion that it isn't much money at all- therefore other factors such as job satisfaction, personal motivation for medicine, and drive factor into the decision to do this.

I did crunch those numbers before i decided to do this, and even after doing the numbers over again im still satisfied with my choice... i am a bit crazy

 

[ChandutheMagici]

I wanted to thank you guys for all your replies. They've been very insightful, especially the number crunching bit.

I did want to ask njbmd if this comment..

If you are not currently completing residency, those figures that you are "salivating" over are very likely not going to apply to you. The health care system in this country is changing. Reimbursements to physicians are due to drop again. Anything past does not predict the future.

was directed at me? If so, I wasn't really salivating over a salary. I was more so confused at how people didn't think it was a lot of money. Now I've been informed

Also, is there anyway we can read any of the planned or possible changes to healthcare? Are they on your blog?

Chandu

 

[futureboy]

Vtucci, your $140k starting salary as an attorney is great, but not typical. Other than Ivy grads, only the top 10 or maybe 20 percent of the class makes that kind of money right out of school. I agree that law school involves less school time and cost than medicine, but it takes most attorneys 5 or 10 years to work up to the $140k range.

People shouldn't go into law for the money any more than they should go in to medicine for the money.