Diminished returns with attending salary?

[Tenk]

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If you max contribute Roths and IRAs for a spouse and yourself throughout med school and residency for about 10 yrs w/ investment return of 10-15% and then 100-120K of saving for your first three years as an attending, you will be surprised to know that my 2 mil benchmark is a lot more realistic than your initial expectation.

But, pls feel free to do whatever that suits you.

You are bad at math.

I'll apply a fast 3 year residency and even give you a med school tuition of $30,000, a resident salary of $50k, and an attending salary of $400k. Let's begin.

MS1: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -45,000
MS2: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -90,000
MS3: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -135,000
MS4: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -180,000

We are already at -$180,000 four years in. These loans will now start to accrue interest at we'll be nice and say 6%.

PGY1: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 38,500. Loan debt: -180,000 + -10800 = -190,800
PGY2: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 80,850. Loan debt: -190,800 + -11448 = -202,248
PGY3: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 127,435. Loan debt: -202,248 + -12134 = -214,382

Graduate to attending and now earn a nice 400,000. Hell, I won't even include taxes AND I'll contribute 200,000 a year just to show how UTTERLY wrong you are. Hell, for fun, we will also say you pay off all your 214,382 in loan debt too! You're just THAT wrong!!!! AMAZING!

PGY4: 400,000 salary, 200,000 in investments = 360,178
PGY5: 400,000 salary, 200,000 in investments = 616,195
PGY6: 400,000 salary, 200,000 in investments = 897,814.

Yup, even when I give you: a magical land without taxes, a higher attending salary than what you quoted, the ability to pay off all your debt in 3 years, a magical 10% interest rate that starts BEFORE you even put any money into the investment (normally all these calculations would happen over time but I gave you the extra money in advance), extra money on investments in residency, a low tuition cost, an above average resident salary and DOUBLE what you quoted as your attending investment price, your net worth is still less than 1 million dollars. If you actually factored in taxes into this, that number would probably be half as much if not less than half.

You. Are. Wrong.

After reading some more posts you are 100% a troll. A good troll too. I'm not going to respond to you anymore. You earned a spot on my ignore list, congrats! Your mother would be so proud.

To the OP and anyone else who actually cares about this topic: money is nice, it lets you do fun things outside of work, whatever hobbies you may have. Higher salaries are always nice as they allow you to work less and play more. Unfortunately a lot of doctors get caught up in the money grind and keep working even though they don't NEED the money to accomplish their life goals. All in all it comes to a balancing act that you need to learn yourself with time. But in the end, more money is always nice!

 

[68PGunner]

You are bad at math.

I'll apply a fast 3 year residency and even give you a med school tuition of $30,000, a resident salary of $50k, and an attending salary of $400k. Let's begin.

MS1: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -45,000
MS2: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -90,000
MS3: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -135,000
MS4: -30,000 for tuition, -10,000 for rent, -5,000 for everything else. = -180,000

We are already at -$180,000 four years in. These loans will now start to accrue interest at we'll be nice and say 6%.

PGY1: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 38,500. Loan debt: -180,000 + -10800 = -190,800
PGY2: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 80,850. Loan debt: -190,800 + -11448 = -202,248
PGY3: +50,000, -10,000 for rent, -5,000 for everything else. = 35,000 to invest at a 10% rate gives 127,435. Loan debt: -202,248 + -12134 = -214,382

Graduate to attending and now earn a nice 400,000. Hell, I won't even include taxes AND I'll contribute 200,000 a year just to show how UTTERLY wrong you are. Hell, for fun, we will also say you pay off all your 214,382 in loan debt too! You're just THAT wrong!!!! AMAZING!

PGY4: 400,000 salary, 200,000 in investments = 360,178
PGY5: 400,000 salary, 200,000 in investments = 616,195
PGY6: 400,000 salary, 200,000 in investments = 897,814.

Yup, even when I give you: a magical land without taxes, a higher attending salary than what you quoted, the ability to pay off all your debt in 3 years, a magical 10% interest rate that starts BEFORE you even put any money into the investment (normally all these calculations would happen over time but I gave you the extra money in advance), extra money on investments in residency, a low tuition cost, an above average resident salary and DOUBLE what you quoted as your attending investment price, your net worth is still less than 1 million dollars. If you actually factored in taxes into this, that number would probably be half as much if not less than half.

You. Are. Wrong.

Have a nice day. 8)

It's more like this assuming 12% annual return

MS1: 11K in Roth, 17-18 K in 401, totaling 29K
MS2: 32.5K plus another 29K
MS3: 69K plus another 29K
MS4: 110 K plus another 29K

PGY1: 155 K + 29K
PGY2: 162 K + 29K
PGY3: 213 K + 29K
PGY4: 271 K + 29K
PGY5: 336 K + 29K

Attending Life w/ about 120-130K in saving
Yr 1: 408 K + 125K
Yr 2: 597 K + 125K
Yr 3: 810 K + 125 K
Yr 4: 935 K + 125 K *** 1 mil mark hit
Yr 5: 1,187 K + 125 K
Yr 6: 1,470 K + 125 K
Yr 7: 1786 K + 125 K
Yr 8: 2,140 K + 125 *** 2 mil mark hit

As for med school tuition, I won't bother to talk about it. That's for another topic. With the numerous programs out there for debt forgiveness from the private and public sectors, any student debt under $250K doesn't even deserve to have much discussion.

 

[Lucca]

This is your friendly reminder to keep it civil everyone.

 

[michaelrack]

8 years ago I wanted to buy some Berkshire but I figured that Buffett would die soon so I didn't.

 

[libertyyne]

8 years ago I wanted to buy some Berkshire but I figured that Buffett would die soon so I didn't.

Him dying might be the best time to buy.

 

[Osteoth]

Based on this data, I think we can at least agree that 10-15% annual return isn't as realistic as many are led to believe especially if you diversify your assets between BRK and other funds, especially in the realm of passive investment.

On the topic of Berkshire, I calculate BRK performance vs the SP500 performance within the past 1 year. SP500 return was bet 15-20% return. BRK return was between 25-30% return. The old man still has the magic touch.

Even with a VERY generous 20% year on year appreciation on your portfolio, it would still take the $20k you invest 5 years to become the $50k that an orthopod can invest in bonds. You will never be able to out save him, period. The math does not work out, all else equal.

And I wasn't saying that BRK is a bad investment, far from it. Its the most expensive stock on the market for a reason. All I'm saying is that you're not going to tie your entire financial freedom to one organization, and you probably wouldn't even be betting 100% of your life savings on stocks, because that also contains some level of risk. So realistically that 20% assumption would be much much lower. Like previous posters have said, if you're generating 20% return year/year you should drop out and run your own fund, because not even Berkshire has been able to do that consistently.

 

[michaelrack]

At this point, I don't know how good BRK is as a stock... I would like to point out that at this time BRK/Buffett are not "stock pickers"; BRK's returns mostly come from 1) owning/running subsidiary businesses and 2) investments that are not available to the average person

 

[libertyyne]

At this point, I don't know how good BRK is as a stock... I would like to point out that at this time BRK/Buffett are not "stock pickers"; BRK's returns mostly come from 1) owning/running subsidiary businesses and 2) investments that are not available to the average person

Buying brk is buying a diversified conglomerate at this point . A value fund , with no management fees. They have run up against the problem of having too much capital to reinvest since the 70's and Warren has gotten loose with the definition of a value stock with munger whispering in his ear. It's fairly valued at this point but may become cheaper than the sum of it's parts once Warren dies, which would also make it an excellent time to buy imho.

 

[FindingNismo]

It's more like this assuming 12% annual return

MS1: 11K in Roth, 17-18 K in 401, totaling 29K
MS2: 32.5K plus another 29K
MS3: 69K plus another 29K
MS4: 110 K plus another 29K

wait how do you get 29k a year to invest while in med school

 

[evilbooyaa]

Step 1: Get an MBA
Step 2: ????
Step 3: Profit

My avatar approves this message

 

[neoevolution]

wait how do you get 29k a year to invest while in med school

Could be making a high hourly at a part time job or misusing student loans? I know some MCAT tutors who charge crazy high hourly rates, $29k a year is def possible

 

[Chelsea FC]

wait how do you get 29k a year to invest while in med school

He pulls it from his a*s, just like he does his terrible advice.