How much do you make in a year as a psychiatrist?

[brainmedicine]

I think a lot of people get this wrong. Everything is negotiable. You do not have to automatically give your agent 3% to sell your home. Have a multi million dollar home in a nice area? You think you can't tell your agent to take a hike and then find someone else willing to sell your home for 2 percent? Happens all the time around here.

What about negotiating the rate when you are buying?

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[Merovinge]

It may be mostly trivial and uncommon but it still happens. Had a friend in grad school who got "evicted" from their duplex because the landlord was moving and decided to sell the property to a family instead of continue renting. They were pretty upset about having to move since they'd been there for years, but didn't want to buy. Obviously that's more of an issue with renting a house than an apartment but the point is that this isn't something that one needs to worry about if they buy. For those who prefer a downtown/apartment-like lifestyle plenty of places have condos available to purchase.


Eh, some of this is fair but some of it doesn't apply to physicians. Down payments aren't necessary and physician loans often come at a lower interest rate than standard loans (ours was about 0.6-0.8% lower than the standard 30 year fixed at the time). The point of sunk costs with interest payments is fair, but if you live somewhere with lower COL or get a cheaper home you can overpay and dramatically cut down those costs. I did the math for our own mortgage at one point and by paying an extra $500/mo on a ~3k/mo mortgage for 10 years it'll directly save us ~350k in interest on a ~$550k home (gross payment over the course of the loan would drop by about 25%). Sure, we could have done a down payment, but instead have invested what would have been that down payment. So after 30 years we'll have our house + the earnings from investing the down payment - the interest payments instead of just having paid $1.08mil over 30 years into renting. As physicians we get a huge leg up here compared to the average buyer like the article talks about.

Yes, there are costs to maintaining a home, and if you buy an older home or "fixer upper" then the costs can be far more significant. That's part of being an educated buyer though and some of those can be negated through the buying process. We got a new roof put on our house at no cost to us before purchasing through some negotiations. That's a cost we shouldn't have to worry about for 20+ years unless there's damage.

On the flip side, you may not have to pay for major maintenance or some upkeep with renting, but there's still hidden costs. We bought our house during an October and our lease on our rental went through the following April. Sounds dumb, but we were showing the rental to get out early. We left for holiday in December and came back to a burst line in the freezer that leaked for likely most of the week and destroyed 2 floors. House was unlivable and the rental company/landlords who had previously been great were suddenly terrible. We dealt with them for literally 2+ months trying to get everything straightened out before we threatened to get lawyers involved and they retroactively cancelled our for January onward. If we had still been living there it would have been a nightmare living out of a hotel and probably putting it all on our credit cards and paying while trying to get an unresponsive rental company to work with us. Yes, the same can happen when you buy, but I've found homeowners insurance to be far more reliable and responsive than landlords and rental companies (I had also previously had to sue a prior landlord in grad school for breach of contract). When you own you also don't have to worry about landlords or agencies coming into your dwelling while you're away, which is another issue I've dealt with despite the lease saying landlord would not enter premises without 24 hour notice.

Regardless, renting is "throwing away money" either way. Money is also "thrown away" when owning a home, but at least you're also building equity. People buying homes just don't always understand full costs or what to look for and can end up "throwing away" more than if they'd just rented. Sure, sometimes renting is the right option, I won't argue that at all. But there's a huge difference between physicians and average homebuyers as well as right and very wrong ways to become a homeowner.

TL;DR Renting isn't always bad, but it is 100% sunk money. At least with buying you get equity out of it, you just have to be educated and thoughtful about purchasing and being a homeowner.

The big thing people miss is the expected value of the money you are saving renting in VTI over the years. In some locals if you simply save the difference in rent vs buy and invest it 100% (of course many people don't do this, you need to actually have ideal money management skills) you are almost certainly going to come out ahead.

Super rough example just to make the point:
Rent is 4k all in for home
Buy is 6k/month all in for home

Buy has $xx equity after 15 years however rent has $2k/month invested in the markets which in some (maybe now many) locations is > than amount of equity.

 

[Merovinge]

What about negotiating the rate when you are buying?

That doesn't work, it's all done on the seller side. However pending this most recent lawsuit and settlement, it is likely changing in the next few months (I believe June).

 

[psychmd03]

I think a lot of people get this wrong. Everything is negotiable. You do not have to automatically give your agent 3% to sell your home. Have a multi million dollar home in a nice area? You think you can't tell your agent to take a hike and then find someone else willing to sell your home for 2 percent? Happens all the time around here.

This was pretty set in stone but with the current settlement from the NRA there will be a massive shift but mostly this was “negotiable” but not really. The NAR was found to function like a cartel and was price fixing at least per the jury in the lost lawsuit

 

[psychmd03]

The big thing people miss is the expected value of the money you are saving renting in VTI over the years. In some locals if you simply save the difference in rent vs buy and invest it 100% (of course many people don't do this, you need to actually have ideal money management skills) you are almost certainly going to come out ahead.

Super rough example just to make the point:
Rent is 4k all in for home
Buy is 6k/month all in for home

Buy has $xx equity after 15 years however rent has $2k/month invested in the markets which in some (maybe now many) locations is > than amount of equity.

This is exactly what I do except it’s 2800 v 5-7k depending on what I’d buy and that’s not accounting for all other costs like repaired, taxes etc, just purely rent v mortgage.

So I invest all the extra plus a lot more. But YMMV depends on interest rates and location and of course psychological characteristics

 

[calvnandhobbs68]

Yes buying just adds stability for a lot of people and a sense of "I can do whatever I want to my house it's my house now" even if it's not your "forever house". You can't (and wouldn't even want to since it's not "your house") switch out light fixtures or get a nicer front door or redo your bathroom sinks in a rental. So you basically just have to live with whatever the landlord wants to do as long as it's functional. You also have the sense that you can just be kicked out at any time year to year...even if you aren't evicted for any reason and pay on time every month they can just decide not to renew your next lease and now you have to find a new place to live. Oh and by the way you might have to fight them for your security deposit back every time you move if they decide to be a dick. If you have pets and kids, this gets even harder. If you pay your mortgage on time, that can never happen to you and you will never have to go looking for another place to live...psychologically thats a huge difference.

 

[psychmd03]

Yes buying just adds stability for a lot of people and a sense of "I can do whatever I want to my house it's my house now" even if it's not your "forever house". You can't (and wouldn't even want to since it's not "your house") switch out light fixtures or get a nicer front door or redo your bathroom sinks in a rental. So you basically just have to live with whatever the landlord wants to do as long as it's functional. You also have the sense that you can just be kicked out at any time year to year...even if you aren't evicted for any reason and pay on time every month they can just decide not to renew your next lease and now you have to find a new place to live. Oh and by the way you might have to fight them for your security deposit back every time you move if they decide to be a dick. If you have pets and kids, this gets even harder. If you pay your mortgage on time, that can never happen to you and you will never have to go looking for another place to live...psychologically thats a huge difference.

Agree it’s a massive difference if all those points hold true. Some people have no desire to change up a living environment beyond furniture and decoration but that’s a small point. The idea of being randomly kicked out or not renewed at least, at least for those in this forum, I’d wager is a low probability event….very low. We represent the best tenant one could hope for. We are high earners with extremely stable income with likely high credit scores and little chance of destroying property. It gives us leverage to sign longer leases, better rent, and a much lower chance for a landlord to want to let us go. And for being kicked out at any time that’s just illegal even in the states with the most landlord friendly laws. And for the ones that are more protective to renters IE all blue cities it’s wildly difficult to kick someone from their residence and the longer you’ve resided the harder it is.

Just presenting counter points since so few people even explore the idea of renting as a better option.

 

[TexasPhysician]

This was pretty set in stone but with the current settlement from the NRA there will be a massive shift but mostly this was “negotiable” but not really. The NAR was found to function like a cartel and was price fixing at least per the jury in the lost lawsuit

False. This was always negotiable. Lawsuit was lost on technicalities. From someone in real estate, the majority of investments I’ve been in have a cut that is different than 6%. The numbers we see over the last few years are unlikely to change. There have been flat rate brokers for years and years.

The total amount of damages was “high”, but the amount is equal to damages of about $8 per home sale. That’s a fat nothing.

 

[calvnandhobbs68]

False. This was always negotiable. Lawsuit was lost on technicalities. From someone in real estate, the majority of investments I’ve been in have a cut that is different than 6%. The numbers we see over the last few years are unlikely to change. There have been flat rate brokers for years and years.

The total amount of damages was “high”, but the amount is equal to damages of about $8 per home sale. That’s a fat nothing.

Sure this was technically always negotiable but the vast majority of homebuyers and sellers (esp first time homebuyers/sellers) either had no idea they could negotiate this or were heavily discouraged even bringing it up by realtors. I'm acutely aware this is true as someone who recently bought a house in the last year. Even pure buyers agents were not typically "flat rate". I had no stated option to go just pay my realtor a few thousand bucks to show me houses, when all the realtors just tell you that their fee "is just half the commission" and don't worry about it.

Probably different for someone who is buying real estate or houses to invest in who has done this many times and is savvy enough to shop around and negotiate commission percentages...but most people will only buy primary residences and only do this maybe a few times in their entire life.

"Her real estate agent presented her with a form that detailed how much commission they would pay, with choices in four boxes: 6 percent, 7 percent, 8 percent or 9 percent.

Ms. Burnett was instructed to select one, and she picked 6 percent.

The rest of the form, which stipulated that the commission would be evenly split among the buyer and seller agents, was already filled out; Ms. Burnett asked if she could lower the commission paid to the buyer’s agent, but her agent told her doing so would discourage agents from showing her home. “I shop sales,” Ms. Burnett, 70, said with a laugh. She spent three decades as a stay-at-home mother while her husband, Scott Burnett, 72, worked for a waste management company and spent 20 years working as a local legislator. “I’m always looking for a break. But when I asked her if I could negotiate, she said, ‘No, you really can’t.’”

The Homeowners Who Beat the National Association of Realtors

Six home sellers in Missouri successfully argued that the powerful real estate trade group’s rules on commissions forced them to pay inflated fees.

www.nytimes.com

 

[TexasPhysician]

Sure this was technically always negotiable but the vast majority of homebuyers and sellers (esp first time homebuyers/sellers) either had no idea they could negotiate this or were heavily discouraged even bringing it up by realtors. I'm acutely aware this is true as someone who recently bought a house in the last year. Even pure buyers agents were not typically "flat rate". I had no stated option to go just pay my realtor a few thousand bucks to show me houses, when all the realtors just tell you that their fee "is just half the commission" and don't worry about it.

Probably different for someone who is buying real estate or houses to invest in who has done this many times and is savvy enough to shop around and negotiate commission percentages...but most people will only buy primary residences and only do this maybe a few times in their entire life.

The Homeowners Who Beat the National Association of Realtors

Six home sellers in Missouri successfully argued that the powerful real estate trade group’s rules on commissions forced them to pay inflated fees.

www.nytimes.com

Realtors don’t want to lower their commissions. The forms may look different to comply with the lawsuit, but they are going to fight for their cut. I don’t see prices changing much in the near future. You could always negotiate lower, and you’ll need to continue to negotiate lower. This media discussion on it is a blip on the radar. People will forget or realtors will convince them that it isn’t important.

In our world, this is similar to Medicare cutting our rates by 1% and then saying we can do some quality metric to get the 1% back. We can give up the 1% and do less or fight for our percentage.

Some realtors will lower their cut from 3 to 2%, but you’ll need to continue to negotiate that and plenty will say no.

 

[calvnandhobbs68]

Realtors don’t want to lower their commissions. The forms may look different to comply with the lawsuit, but they are going to fight for their cut. I don’t see prices changing much in the near future. You could always negotiate lower, and you’ll need to continue to negotiate lower. This media discussion on it is a blip on the radar. People will forget or realtors will convince them that it isn’t important.

In our world, this is similar to Medicare cutting our rates by 1% and then saying we can do some quality metric to get the 1% back. We can give up the 1% and do less or fight for our percentage.

Some realtors will lower their cut from 3 to 2%, but you’ll need to continue to negotiate that and plenty will say no.

Sure but it'll be a lot more transparent and realtors will have more of an incentive to actually undercut each other because there will be a lot more scrutiny of "cartel-like" behavior....so if all the realtors in an region refuse to drop under a 3% commission for buyers for instance or everyone refuses to do any type of flat fee, there's a lot more support to say "sounds like price fixing". There's a lotttt of wiggle room to undercut when we're talking about 10s of thousands of dollars on each side of the split...if I can advertise I'll show buyers houses for thousands of dollars less than the guy down the street, you can bet it's gonna drive business.

It's not really gonna matter if they don't "want" to lower commissions. You may also get a more tiered price structure where the more popular/experienced realtors can set higher prices as buyers agents but people try to break into the business are willing to significantly undercut them to get clients. The way it used to be, you'd basically pay everyone the same no matter what.

On the lower end of the market, sure a lot of buyers won't be able to come up with a few thousand bucks to pay an agent and the difference will be a lot smaller. But if for instance, if I'm shopping around for 700-800K houses so my typical "buyer side" of the commission would be 20K+ at the sale, I'm not gonna want to pay 20K upfront for an agent to show me houses and write a few offers that they fill out of some standardized form anyway. The commission structures always been outrageous but since it was rolled into this much larger purchase price, people just didn't think much about it.

This isn't just me, you're a significant outlier in the opinion that this won't lower commissions.

 

[Merovinge]

Sure but it'll be a lot more transparent and realtors will have more of an incentive to actually undercut each other because there will be a lot more scrutiny of "cartel-like" behavior....so if all the realtors in an region refuse to drop under a 3% commission for buyers for instance or everyone refuses to do any type of flat fee, there's a lot more support to say "sounds like price fixing". There's a lotttt of wiggle room to undercut when we're talking about 10s of thousands of dollars on each side of the split...if I can advertise I'll show buyers houses for thousands of dollars less than the guy down the street, you can bet it's gonna drive business.

It's not really gonna matter if they don't "want" to lower commissions. You may also get a more tiered price structure where the more popular/experienced realtors can set higher prices as buyers agents but people try to break into the business are willing to significantly undercut them to get clients. The way it used to be, you'd basically pay everyone the same no matter what.

On the lower end of the market, sure a lot of buyers won't be able to come up with a few thousand bucks to pay an agent and the difference will be a lot smaller. But if for instance, if I'm shopping around for 700-800K houses so my typical "buyer side" of the commission would be 20K+ at the sale, I'm not gonna want to pay 20K upfront for an agent to show me houses and write a few offers that they fill out of some standardized form anyway. The commission structures always been outrageous but since it was rolled into this much larger purchase price, people just didn't think much about it.

This isn't just me, you're a significant outlier in the opinion that this won't lower commissions.

Right, and as is usually helpful, just look at the rest of the Western world for comparison. If it helps, almost every country functions on a 1.2%-4.5% total payment to real estate agents. Almost no chance we don't at least drop to be in line with the highest reimbursed agents from the rest of the Western world.

Personal experience n=1: I bought a house in a small town with the RE agent recommended by other docs in the area. He was great and helped us look at almost 20 homes (total buyers market). We ended up listing with him and as he was drawing up the contract said "I told you I'd sell this for 4 right?" He had not, but the man already knew at the time keeping all the most expensive home commissions was worth the 33% off on our specific house. We had 3 docs ask us on the way out who use and you better believe he was the recommendation to all of them.

 

[TexasPhysician]

Sure but it'll be a lot more transparent and realtors will have more of an incentive to actually undercut each other because there will be a lot more scrutiny of "cartel-like" behavior....so if all the realtors in an region refuse to drop under a 3% commission for buyers for instance or everyone refuses to do any type of flat fee, there's a lot more support to say "sounds like price fixing". There's a lotttt of wiggle room to undercut when we're talking about 10s of thousands of dollars on each side of the split...if I can advertise I'll show buyers houses for thousands of dollars less than the guy down the street, you can bet it's gonna drive business.

It's not really gonna matter if they don't "want" to lower commissions. You may also get a more tiered price structure where the more popular/experienced realtors can set higher prices as buyers agents but people try to break into the business are willing to significantly undercut them to get clients. The way it used to be, you'd basically pay everyone the same no matter what.

On the lower end of the market, sure a lot of buyers won't be able to come up with a few thousand bucks to pay an agent and the difference will be a lot smaller. But if for instance, if I'm shopping around for 700-800K houses so my typical "buyer side" of the commission would be 20K+ at the sale, I'm not gonna want to pay 20K upfront for an agent to show me houses and write a few offers that they fill out of some standardized form anyway. The commission structures always been outrageous but since it was rolled into this much larger purchase price, people just didn't think much about it.

This isn't just me, you're a significant outlier in the opinion that this won't lower commissions.

Because they could ALWAYS undercut each other. This isn’t new. My spouse is a realtor essentially for our investments and friends. She has taken a lower cut for years to help peers. Just because people here haven’t heard of it doesn’t mean that agents across the USA haven’t been negotiating rates for decades. Even before my spouse was an agent, we negotiated rates with agents.

The NAR lost because it required home sale listings to provide an offer to buyer’s agents up front higher than 0%. It could be 0.0001% but not 0. This represented collusion in the courts.

The standard 6% will stay the standard unless negotiated lower.

There is actually downsides to this. Sellers now can negotiate to pay buyer agents 0%. Buyer agents will stop showing those houses or require buyers to sign agreements to pay them. Buyers won’t want to do this. This could slow down the housing market. There are laws against dual agency, so seller agents don’t want to show the house to every prospective buyer. If not paid more, seller agents won’t want to show the house at all. I get that they should, but many won’t and good luck catching this.

Some agents have started charging above their 3% because brokers are giving a “little” flexibility. They can start at 8% and negotiate lower.

This brief press about the lawsuit will die down.

In a hot market, houses can fly off the market without help. When the markets cool (currently), a better agent is helpful.

 

[milesed]

Is that $140k additional into retirement accounts plus a separate 50% pension at 27 years or are you referring to the same pot/payment/pension with those two 50% figures?

No, the state requires employers pay 50% of salary sent into the state pension fund only. It was much less when I started but was terribly underfunded, so has been raised over the past 15 years to 50%.

I have 457, 401k and 401k Roth available (no matching) that I max out as well. I can retire at age 57 and never work again if I want, but will likely scale back to 2-3 days per week or will work 2 full weeks then take 2-4 weeks off to travel.

 

[Stagg737]

Checking in and looked at the survey responses again. Seems like most of us (~2/3) make between $200k-$500k/yr which seems pretty in line with my personal encounters.

I'm baffled by the 14.6% of people who responded that they make <$100k/yr. Are these residents that are responding and skewing the results or are there actually that many of us making basically nothing for our work? Or do we have that many people on SDN (27) who are just starting a PP or only work part time?

 

[littlefred]

Checking in and looked at the survey responses again. Seems like most of us (~2/3) make between $200k-$500k/yr which seems pretty in line with my personal encounters.

I'm baffled by the 14.6% of people who responded that they make <$100k/yr. Are these residents that are responding and skewing the results or are there actually that many of us making basically nothing for our work? Or do we have that many people on SDN (27) who are just starting a PP or only work part time?

One of the beauties of psych is that you can work very little time in a month (1 hour a month, why not?), if you'd like. Not many specialties can do that.

That minimal amount of work would probably put you on that income bracket.

 

[finalpsychyear]

Checking in and looked at the survey responses again. Seems like most of us (~2/3) make between $200k-$500k/yr which seems pretty in line with my personal encounters.

I'm baffled by the 14.6% of people who responded that they make <$100k/yr. Are these residents that are responding and skewing the results or are there actually that many of us making basically nothing for our work? Or do we have that many people on SDN (27) who are just starting a PP or only work part time?

Yeah the poll doesn't mean much if you don't include hours. I think a better survey would have been what would you make for a 40 hours FTE

 

[Merovinge]

Checking in and looked at the survey responses again. Seems like most of us (~2/3) make between $200k-$500k/yr which seems pretty in line with my personal encounters.

I'm baffled by the 14.6% of people who responded that they make <$100k/yr. Are these residents that are responding and skewing the results or are there actually that many of us making basically nothing for our work? Or do we have that many people on SDN (27) who are just starting a PP or only work part time?

Clearly some residents/fellows filling this out. It's pretty hard to get under 100k even part time. Most places aren't hiring 0.2 FTE.

 

[Stagg737]

One of the beauties of psych is that you can work very little time in a month (1 hour a month, why not?), if you'd like. Not many specialties can do that.

That minimal amount of work would probably put you on that income bracket.

Yeah the poll doesn't mean much if you don't include hours. I think a better survey would have been what would you make for a 40 hours FTE

Sure, but even people working PT are probably working at least 15-20 clinical hours per week. Making $150/hr at 15 hours per week for 45 weeks still puts you over $100k/yr. I'm somehow very doubtful that 15% of us on SDN are working that little AND being paid that poorly. I also doubt that there are that many of us just starting up a PP without any other gigs as attendings.

Clearly some residents/fellows filling this out. It's pretty hard to get under 100k even part time. Most places aren't hiring 0.2 FTE.

That's what I think it's got to be. Would be nice if residents who responded either remove their answer or update it to reflect what they're going to be paid as an attending if they've signed a contract. Or if those who are making <$100k can clarify what they're doing unless it really is just that many of us doing a single PT position without supplemental income, which would frankly be shocking to me.

 

[ObsequiousAplomb]

Sure, but even people working PT are probably working at least 15-20 clinical hours per week. Making $150/hr at 15 hours per week for 45 weeks still puts you over $100k/yr. I'm somehow very doubtful that 15% of us on SDN are working that little AND being paid that poorly. I also doubt that there are that many of us just starting up a PP without any other gigs as attendings.


That's what I think it's got to be. Would be nice if residents who responded either remove their answer or update it to reflect what they're going to be paid as an attending if they've signed a contract. Or if those who are making QUOTE]I'm currently just working my solo private practice. 8 hours per week since January. The pace is picking up and is closer to 20 now, but if I had a small single day a week practice for the year I'd come in under $100k. It wouldn't be the worst thing in the world if my new patient pace stayed at two or fewer per week and I stayed under 20 hours.

 

[Stagg737]

@ObsequiousAplomb , right. I know you and a couple others on here who are doing PT PP and are fairly early on, but 27 people said they make less than $100k. Which would be a lot more early entrepreneurs without side hustles than those who actually post...

 

[Cath Up]

the results are not viewable unless you vote. That is the most logical option for a resident to select.

 

[Merovinge]

the results are not viewable unless you vote. That is the most logical option for a resident to select.

Hah so you are saying it's time for a new poll that is viewable to all without voting. Good call digging up that very relevant tid bit.

 

[calvnandhobbs68]

Agree it’s a massive difference if all those points hold true. Some people have no desire to change up a living environment beyond furniture and decoration but that’s a small point. The idea of being randomly kicked out or not renewed at least, at least for those in this forum, I’d wager is a low probability event….very low. We represent the best tenant one could hope for. We are high earners with extremely stable income with likely high credit scores and little chance of destroying property. It gives us leverage to sign longer leases, better rent, and a much lower chance for a landlord to want to let us go. And for being kicked out at any time that’s just illegal even in the states with the most landlord friendly laws. And for the ones that are more protective to renters IE all blue cities it’s wildly difficult to kick someone from their residence and the longer you’ve resided the harder it is.

Just presenting counter points since so few people even explore the idea of renting as a better option.

Just to circle back to this, here’s a post just from today. So again, yeah maybe lower probability than a lower income less stable renter but not unheard of in any case to be suddenly told you need to move in 3 months and then someone pulling that crap. I’ve also had a similar experience with crappy landlords trying to withhold petty stuff from security deposits.