Does graduating from med school debt free increase the financial desirability of medicine?

Discover Your Odds of Getting into Medical School
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barack_yomama

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Yeah, It's a big difference. Makes residency a hell of a lot nicer, and frankly 40-50k or so is a pretty comfortable income without kids or 20k a year in interest, so you can actually save a bit during residency.

Figure for comparison, you do engineering. Maybe a 5 year program with a masters. And you start at 50-60k, top is usually 120k-ish, unless you end up as an executive. They still work you like a dog, too. There's only 3 years you aren't making any money, but you also have no expenses, since they're covered. And even the average pediatrician makes more money than that.
 
Doctors don't become wealthy? What anesthesiologist do you know that doesn't have a house on a lake with at least 1 boat?
 
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barack_yomama said:
So there are tons of articles describing why doctors don't become wealthy, and from a financial perspective you're much better off if you work in your 20s since you can start accumulating a portfolio, etc. However, it seems as if a lot of those articles cite student debt as a major cause of this.

Let's say that you were hypothetically able to graduate from medical school with no debt (this means no undergraduate debt as well) -- either someone paid for you or you got a scholarship. You'll still have a late start of course, but in this case would you still have benefited more financially from working in your 20s?
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The other big assumption in here is that you start saving and investing in your 20's. How many BS / BA graduates get good career-track jobs straight out of college and then have the maturity and discipline to actually start saving and investing? If you spend all you earn through most of your 20's, the 'start work early' advantage all but disappears.
 
mimelim said:
My brother is a high school teacher and I will not have as much purchasing power as him until I'm in my 40s.
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"Purchasing power (sometimes retroactively called adjusted for inflation) is the number of goods or services that can be purchased with a unit of currency"

Unless you or your brother live in a time machine or a device travelling at a significant fraction of c, you both have the exact same purchasing power.
 
Taken to the extremes, and assuming your finally smart when your young...the difference can be pretty drastic. 60k a year for 15 years is 900k. Not to mention at least 300k of debt, your talking a 1.2 million difference in wealth. That's the difference at age 40 between a public school teacher and a CT surgeon. Kind of alarming.

But the longer specialties usually end up with higher pay. So in 10 years you'll likely blow past them.

But for me, at the end of the day...I knew what I was getting into when I signed up. Yes it sucks to see your friends buying houses, doing fun things when your poor and studying...but that's life and I chose it (not only chose it, but worked very hard to do it). I do think medical education (and education in general) is way too expensive but that is a separate discussion. And its not because I think the government should pay for it.
 
Doudline said:
"Purchasing power (sometimes retroactively called adjusted for inflation) is the number of goods or services that can be purchased with a unit of currency"

Unless you or your brother live in a time machine or a device travelling at a significant fraction of c, you both have the exact same purchasing power.
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This is why I think that every student, including pre-meds, should take introductory economics, so they don't wikipedia something and think they have a handle on basic economic terms. Its like you can't comprehend that there might be two definitions of a phrase, never mind that the far more common use of 'purchasing power' refers to money/credit available for consumption of goods/services.

gonnif said:
I think @mimelim was implying that his brother the teacher, soon after college in his 20s has a certain level of purchasing power. When the brother and mimelin are their 40s, they will finally be on par. Purchasing power is often used not for the currency but for the goods it can buy (ie 2 hours of pay at average wage can get you a pair of shoes). Comparing one person to another implies how much each one can purchase.
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mimelim said:
This is why I think that every student, including pre-meds, should take introductory economics, so they don't wikipedia something and think they have a handle on basic economic terms. Its like you can't comprehend that there might be two definitions of a phrase, never mind that the far more common use of 'purchasing power' refers to money/credit available for consumption of goods/services.
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I was being facetious. I am well aware of the common -nevermind incorrect- use of "purchasing power" by non-economists.
 
I'm actually very curious how loans vs. no loans will affect lifestyle, work balance etc.

My uncle is a surgeon in a very well paying speciality but he always tells me medicine isn't worth it because even with all he's making he was still paying off debt into his 40s. How much of a financial burden would be removed by not having to pay for school?
 
mimelim said:
This is why I think that every student, including pre-meds, should take introductory economics, so they don't wikipedia something and think they have a handle on basic economic terms. Its like you can't comprehend that there might be two definitions of a phrase, never mind that the far more common use of 'purchasing power' refers to money/credit available for consumption of goods/services.
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This may steer a bit off topic, but reminds me of a recent conversation with my father. I was upset due to my own financial situation. I told him I was feeling a bit 'worthless' as, outside of time, I've not contributed much in resources to the community. He reassured me that it couldn't be the case. I owed a ton of money, and was actually a lot less than worthless. Ha, dads. 🙁
 
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mimelim said:
Uh huh. Keep digging.
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well I mean he is...
hqdefault.jpg
 
To some extent, you can see the difference in practicing medicine without debt in Europe. Med school is covered as a public good. There's a smaller salary differential between specialists and primary care docs. Primary care docs make pretty close to what they do in the US, specialists make less, but still more than primary care. Both still pay a very comfortable salary.
 
Haha almost no one in here actually answered OP's question

To OP: I think if you can do the eight years debt-free then most of the financial "shortcomings" of medicine disappear. 45k on no debt and without kids is plenty to live on for five years of residency.
 
According to data in "The Millionaire Next Door", most doctors accumulate less wealth than one would expect based on their income. The author calls such people "Under Accumulators of Wealth". However, I suspect that overall, physicians have more savings than the general population. Incidentally, teachers and engineers are "over accumulators of wealth".

Even with debt, if you are careful with your money, and invest well, you should end up with more money than most people. See the medscape reoport on physician debt and net worth ( a link is below but I think you will need to log in ). See if you like the numbers you see there for net worth at various ages.
The other thing you can do is find some online debt calculators and investment calculators and run the numbers yourself.

http://www.medscape.com/features/slideshow/compensation/2015/debt-and-net-worth
 
goldy490 said:
I'm actually very curious how loans vs. no loans will affect lifestyle, work balance etc.

My uncle is a surgeon in a very well paying speciality but he always tells me medicine isn't worth it because even with all he's making he was still paying off debt into his 40s. How much of a financial burden would be removed by not having to pay for school?
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I'll let you know! 😀
 
goldy490 said:
I'm actually very curious how loans vs. no loans will affect lifestyle, work balance etc.

My uncle is a surgeon in a very well paying speciality but he always tells me medicine isn't worth it because even with all he's making he was still paying off debt into his 40s. How much of a financial burden would be removed by not having to pay for school?
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A lot. I don't know of any full ride scholarships to med school, but I got full tuition after a full ride to undergrad. My only loans were for cost of living and came out to about $70,000 for the four years. I could have lived more frugally and taken less than the full COA balance, but I lived in a gated apartment complex and shopped regularly at Whole Foods. I then made nominal payments during residency-- again choosing a more expensive lifestyle (nicer apartment, kept a car I didn't truly need) because I had less debt to worry about. When I figured out that my dream job was to be a low-paid academic, the low debt load let me go down that path without a hint of hesitation. Then started the aggressive payments to be debt free within 18 months of starting practice. It could have taken me even less time, but I like dining out, last-minute trips, and good seats at sporting events.

TL;DR: going to med school for free, if you can, makes a difference. Going to undergrad for free is a lot more likely to happen and helps a lot.
 
22031 Alum said:
TL;DR: going to med school for free, if you can, makes a difference. Going to undergrad for free is a lot more likely to happen and helps a lot.
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A big question I am asking is whether the prestige of a school outweighs a full tuition scholarship in terms of overall career opportunities and life happiness.

I don't know where you went, but looking back, is there any medical school you would have gone to over the one that gave you a full ride? Ivies? UCs? NYC schools? Idk. Especially given that you ended up wanting to be in academia..?
 
If I go to med school for free, I'll be set for life. I really don't need much to be happy, and I think FM/EM or FM/Psych would do me quite nicely with no loans to consider.
 
You know what...it's time to find a wealthy partner then...what can I say? #golddigger
 
goldy490 said:
I'm actually very curious how loans vs. no loans will affect lifestyle, work balance etc.

My uncle is a surgeon in a very well paying speciality but he always tells me medicine isn't worth it because even with all he's making he was still paying off debt into his 40s. How much of a financial burden would be removed by not having to pay for school?
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How much financial burden would be relieved? That answer is pretty straight-forward. It's the burden each student acquires and varies with each student's circumstances.
  • For those with parents who pay the whole way, it makes no difference at all.
  • For those with parents who help, who attend a low-cost school, or who get full-tuition, it's relatively minor to moderate.
  • For those who take out loans for the entirety of their medical school costs, it's HUGE.
edit: I should clarify. For some people, making "The Big Bucks" is not a goal specifically because it's necessary to pay off medical school debts. It's important because to them, more money is always much better than less, or because it's associated with "winning" at life or higher status, or because certain sub specialties themselves are associated with higher status.
 
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pageantry said:
A big question I am asking is whether the prestige of a school outweighs a full tuition scholarship in terms of overall career opportunities and life happiness.

I don't know where you went, but looking back, is there any medical school you would have gone to over the one that gave you a full ride? Ivies? UCs? NYC schools? Idk. Especially given that you ended up wanting to be in academia..?
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I was very fortunate in that I never had to choose between wildly disparate "tiers." I did choose full tuition at Vandy over a couple of Ivy admissions. Similarly my undergrad scholarship was to a top 20 school.

That said, I have seen enough people do quite well (better than me, even) from "low-tier" undergrads that I'll never be convinced that large amounts of undergrad debt are worth it. There are tons of scholarships and honors programs out there. Better to save the debt load for med school, which can make more of a difference.

I've also seen people end up in top-tier residencies from lower-tier med schools, but their path was a little tougher. Not because residencies dismiss applicants from certain schools, but because some schools' missions don't align as well with producing that caliber of applicant. The school I work for now, for example, has the primary goal of producing PCPs for the state. It'd be hard for a student who wasn't intensely driven from the start, to put together an application for a top nationwide program. Not impossible, but hard. So to that end, it may make more sense to choose to pay more for Harvard versus going to MCG (just an example!!) for free. It's a highly individual decision- and can be easier if you don't already have a ton of debt.
 
goldy490 said:
I'm actually very curious how loans vs. no loans will affect lifestyle, work balance etc.

My uncle is a surgeon in a very well paying speciality but he always tells me medicine isn't worth it because even with all he's making he was still paying off debt into his 40s. How much of a financial burden would be removed by not having to pay for school?
Click to expand...

I'd be interested in how long it will take for undergrads with the mountains of debt (10, 20, 50, 100k?) to pay down the loans on careers frequently paying less than a surgical specialty. Yes, medicine has a high cost. Some schools are downright ridiculous. Some students (given large undergrad debt) should definitely consider the consequences when paired with large medical school debt. But paying loans until you're 40 is probably increasingly common for those inside and outside of medicine.

That said -- education without debt would certainly provide freedom of choice. People could pursue interest rather than vying for X-specialty because it pays more. If the OP is a real person with a real opportunity (through parents or whatever), the relief would be... substantial, I assume.
 
gonnif said:
There was a great graphic I saw at a meeting once where the UPS driver was ahead of the doctor (including accumulated retirement benefits) somewhere into their late 40's. From a purely financial perspective, medical school seems a much more difficult route for money. Additionally, the emotional toll on the training, relationships, etc, must be taken into account.
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That article had a lot of shady assumptions. Garbage in garbage out.
 
barack_yomama said:
So there are tons of articles describing why doctors don't become wealthy, and from a financial perspective you're much better off if you work in your 20s since you can start accumulating a portfolio, etc. However, it seems as if a lot of those articles cite student debt as a major cause of this.

Let's say that you were hypothetically able to graduate from medical school with no debt (this means no undergraduate debt as well) -- either someone paid for you or you got a scholarship. You'll still have a late start of course, but in this case would you still have benefited more financially from working in your 20s?
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So... if you enter med school late, you can do it debt free. I think I'll be taking out some loans my 4th year because I don't want to sell my townhome. Anyways, I did a MS and worked as an engineering (somewhere low 6 figures) for a bit, saved up some, became a teacher --> bought a home half off because I was a teacher in the last market crash, matriculate close to mid 20's. Should have enough cash for 2 years for sure, may need to work during MS1-2 for MS3 tuition, and either sell or loans in my 4th year. So yes - it's doable - but it's not financially sound. Each year you spend "earning money" - is a year of physician salary you give up.
 
barack_yomama said:
This is pretty much the case. Money is not the reason I want to go into medicine, but at the same time I don't want to do anything financially unwise.
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Going a step further: if you have the money, then there are other considerations as well. Medical school is an expensive investment in yourself; even if you can pay in cash, there's an opportunity cost for it not growing elsewhere. Borrowing money, you are charged with interest. If you have the money, you're sacrificing interest. If you graduated and worked a reasonably well paying job within a few years (high 5, low 6 figures), you'd still need 10+ years to 'break even' going the medical route. For example, if you had 250k laying around and, instead of paying for medical school, you got a job with room to grow... you could find yourself in a very comfortable place by investing the money and letting the money grow from an early age. Spending it for more school means you lose years of compounding interest and then need to rebuild the fund (and more) to catch up.

All that said, many people consider medicine to be financially worth it even with >100-200k debt, and freedom from the debt would be very nice and allow you the opportunity to follow interest (assuming you can suppress the need to make mo' money).
 
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ConfusedChemist said:
I'm sorry....but did you not just ask another way of saying
"If I don't have debt is this better financially?"
......
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ridethecliche said:
Obviously the answer is yes. How is this even a question?

If you had to pick between graduating with debt or without debt, all other things equal, what would you do?
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I'm pretty sure the question was whether it would be better financially to go to medical school and graduate with little or no debt or start working in your early 20s, which is a less silly question.
 
WedgeDawg said:
I'm pretty sure the question was whether it would be better financially to go to medical school and graduate with little or no debt or start working in your early 20s, which is a less silly question.
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Yep, this exactly.
 
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Real world example if this helps at all:

My aunt and uncle (married) are both anesthesiologists and both walked into their salaries within a year of each other (met during residency). They both did the navy so after deployments they had zero debt. That's a topic whose pros and cons I won't even get into. But here's the fun part... Within two years of being full fledged docs they bought a $900,000 mansion and a Maserati. Not a bad start

So id say having no debt changes things a bit. But in their case you have to consider the value of the years they traded to the navy
 
NotaCop said:
Real world example if this helps at all:

My aunt and uncle (married) are both anesthesiologists and both walked into their salaries within a year of each other (met during residency). They both did the navy so after deployments they had zero debt. That's a topic whose pros and cons I won't even get into. But here's the fun part... Within two years of being full fledged docs they bought a $900,000 mansion and a Maserati. Not a bad start

So id say having no debt changes things a bit. But in their case you have to consider the value of the years they traded to the navy
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Soooooo anesthesiologist=Maserati? Sign me up!
 
shallsen said:
Ya but then what happens from age 40-60 and retirement?
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I will most likely have more purchasing power, assuming that he continues doing what he is doing and I continue on my current track. Very true. But, that doesn't diminish the fact that for 20+ years, he will have much more free time and more financial resources than I will.
 
not having to spend 200k+ to finance med school is always nice
 
Pacna said:
Doctors don't become wealthy? What anesthesiologist do you know that doesn't have a house on a lake with at least 1 boat?
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When I did my OR rotations for paramedic school, one of the anesthesiologists (as far as I could gather without being too probing/annoying) only worked 1 or 2 days a week. He probably didn't own a boat, but it did seem like his life was pretty awesome.
 
mimelim said:
My brother is a high school teacher and I will not have as much purchasing power as him until I'm in my 40s.
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Assuming you started medical school within a couple of years of college, and assuming your brother makes within two standard deviations of the average for a high school teacher, I don't see how this can be true. A surgeon graduating from residency in his early 30s should surpass the total lifetime earnings of an average high school teacher by the time he's in his 40s. If you lived on an average HS teachers salary and earned an average Surgeons salary you should be able to erase you debt and far surpass the average HS teachers savings/assets within three years of residency graduation.

Heck, if your brother has an average high school teacher's salary, you should have been just about even with his paycheck on day one of residency.
 
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Perrotfish said:
Assuming you started medical school within a couple of years of college, and assuming your brother makes within two standard deviations of the average for a high school teacher, I don't see how this can be true. A surgeon graduating from residency in his early 30s should surpass the total lifetime earnings of an average high school teacher by the time he's in his 40s. If you lived on an average HS teachers salary and earned an average Surgeons salary you should be able to erase you debt and far surpass the average HS teachers savings/assets within three years of residency graduation.

Heck, if your brother has an average high school teacher's salary, you should have been just about even with his paycheck on day one of residency.
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A couple of reasons my brother and I are not a good comparison:
#1 Geography
#2 I'm married (have been for 6+ years), my brother is single.
#3 I own property, he does not (which in my case has risen significantly in value).

Reasons we are:
#1 We went to the same undergrad.
#2 We were the same major (Physics).
#3 We are close in age.
#4 We both took zero time 'off', no gap years.
#5 We grew up in the same household (same parents, high school, upbringing, etc)
#6 We graduated from undergrad debt free.

I mention this because we certainly are not your typical 'physician' or 'high school teacher', but I think most things balance out and it isn't a crazy statement.

I don't make nearly what he does as a a PGY-4 resident. For starters, Physics teachers make more because they are in high demand and can aggressively negotiate. They also get bonuses for higher level education (masters etc). Then there is the fact that they have a 3 month Summer break and ample opportunities to work/teach to increase their annual income.

So...
#1 4 year head start earning
#2 7 years of earning significantly more than me
#3 Zero debt vs. compounding interest on several hundred thousand in loans.

Translates into 11 years of positive cashflow which allows for aggressive investments and putting him further ahead. It will be hard to pay off student loans in 3 years on an academic attending salary. Private, doable for most people, but if you took out the full amount for medical school, unlikely.
 
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