60k a year???

[Perrotfish]

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A good way to look at debt is to look at its impact on your pre-tax lifetime earnings. 300K in debt (60 K tuition + 20 K living expenses) compounds to about 450K of debt by the end of a 5 year residency. Over a 20 year repayment plan you end up paying back 750K of after tax dollars. With taxes you have to earn about a million pretax dollars to pay it off.

The average high school graduate in the country will earn 1.2 million pretax dollars in an entire career. An average college graduate will earn 2 million. A normal physician (meaning a doctor who works one full time job for an employeer) at today's salaries will earn a pretax career total of 5 million (pediatrics at 150K/year for 35 years) - 15 million (surgery at 500K/year for 30 years).

Should you go to a cheaper school if you can? Of course, this kind of debt means you will spend literally years of your life energy just servicing the f-ing debt, and it might push you away from lower paying fields of medicine that you might love. Is there an upper limit to what you should pay for tuition? Again yes, at the very least it makes no sense to make an investment that is going to lower your after tax after debt lifetime earnings. Is there a single medical school in the country that doesn't make sense to go to, financially? I don't think so, no. You could be a Pediatrician from the most expensive school in the country and you'd still make twice as much as an average college graduate, after taxes and debt.

Now whether this profession is worth the heaping pile of stress and abuse that goes with it is another question.

 

[TheBoneDoctah]

A good way to look at debt is to look at its impact on your pre-tax lifetime earnings. 300K in debt (60 K tuition + 20 K living expenses) compounds to about 450K of debt by the end of a 5 year residency. Over a 20 year repayment plan you end up paying back 750K of after tax dollars. With taxes you have to earn about a million pretax dollars to pay it off.

The average high school graduate in the country will earn 1.2 million pretax dollars in an entire career. An average college graduate will earn 2 million. A normal physician (meaning a doctor who works one full time job for an employeer) at today's salaries will earn a pretax career total of 5 million (pediatrics at 150K/year for 35 years) - 15 million (surgery at 500K/year for 30 years).

Should you go to a cheaper school if you can? Of course, this kind of debt means you will spend literally years of your life energy just servicing the f-ing debt, and it might push you away from lower paying fields of medicine that you might love. Is there an upper limit to what you should pay for tuition? Again yes, at the very least it makes no sense to make an investment that is going to lower your after tax after debt lifetime earnings. Is there a single medical school in the country that doesn't make sense to go to, financially? I don't think so, no. You could be a Pediatrician from the most expensive school in the country and you'd still make twice as much as an average college graduate, after taxes and debt.

Now whether this profession is worth the heaping pile of stress and abuse that goes with it is another question.

Good post. Anyone have comments to add?

 

[TheWeeIceMan]

Ok this a completely different recommendation than everyone else
Haha

Most of the people saying "it's all gonna be fine. Don't worry about debt. You'll be making 500k a year and driving a lambo." are pre-meds. The residents are a lot less optimistic (and for good reason).

 

[TheWeeIceMan]

A good way to look at debt is to look at its impact on your pre-tax lifetime earnings. 300K in debt (60 K tuition + 20 K living expenses) compounds to about 450K of debt by the end of a 5 year residency. Over a 20 year repayment plan you end up paying back 750K of after tax dollars. With taxes you have to earn about a million pretax dollars to pay it off.

The average high school graduate in the country will earn 1.2 million pretax dollars in an entire career. An average college graduate will earn 2 million. A normal physician (meaning a doctor who works one full time job for an employeer) at today's salaries will earn a pretax career total of 5 million (pediatrics at 150K/year for 35 years) - 15 million (surgery at 500K/year for 30 years).

Should you go to a cheaper school if you can? Of course, this kind of debt means you will spend literally years of your life energy just servicing the f-ing debt, and it might push you away from lower paying fields of medicine that you might love. Is there an upper limit to what you should pay for tuition? Again yes, at the very least it makes no sense to make an investment that is going to lower your after tax after debt lifetime earnings. Is there a single medical school in the country that doesn't make sense to go to, financially? I don't think so, no. You could be a Pediatrician from the most expensive school in the country and you'd still make twice as much as an average college graduate, after taxes and debt.

Now whether this profession is worth the heaping pile of stress and abuse that goes with it is another question.

I mostly agree with this, but let's not sell ourselves short here. Most of us that got into medical school could make more than the "average college grad," which evens out to 50k a year for a 40 year career. Now I'm not saying we could have been ibankers or CEOs (like most on SDN jump to assume), but most* of us could shorten the earnings gap a lot more than those numbers imply (not counting the time value of money).

*unless you're a bio major or "pre-med" major, in which case you may be lucky to make 50k a year for life outside of medicine.

 

[Perrotfish]

nvm