For the Private Practice Attendings: Does Money Matter

[Pilot Doc]

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When I ask happy/successful attendings at my program about their professional goals and aspirations, a recurring theme is their feeling that they make "plenty of money" to the point that all of their reasonable financial goals are met and that if their salary increased 50 or 100% they would find little practical use for the money.

Any thoughts from the other side? What do you get out of the last 30-50% of your salary? Do you spend more so that you're still living paycheck to paycheck? Do you save it so that you can live 5 years without a paycheck? Do you buy more toys? Do you fund your own charity, etc? Does it make a noticeable difference?

 

[dralex]

Hi Pilot Doc,
First of all let me preface my statements by saying I am not an anesthesiologist. I have a particularly soft spot for them since almost all of the ones I have met have been wonderful people and I learned so much from them when I was in medical school 10 years ago.
With that being said, the financial issue is a relative thing.
Ask the same question to unhappy docs and see what they say (if they even bother to reply).
You reach a point in your professional and family life where money is not the end-all-be-all of your existence. If you have no bad debt, your ed loans are paid off, you have a good family and a good practice, what else is there?
If you are banking a decent sum of cash, have a nice house (or two), "toys" you like what does extra money buy you? More toys, a third house? These things make no difference any more.
I have made a lot of money the past five years but it has been outside of the medical field. I really yearn to get back into the OR/angio suite. I will gladly take my big fat paycheck and trade it back in for a tiny resident's paycheck if that's what it will take.
My opinion, not that of the majority. Take it for what it is. Focus on being a good doctor, the money should then take care of itself.
Good luck to you!

 

[BLADEMDA]

When I ask happy/successful attendings at my program about their professional goals and aspirations, a recurring theme is their feeling that they make "plenty of money" to the point that all of their reasonable financial goals are met and that if their salary increased 50 or 100% they would find little practical use for the money.

Any thoughts from the other side? What do you get out of the last 30-50% of your salary? Do you spend more so that you're still living paycheck to paycheck? Do you save it so that you can live 5 years without a paycheck? Do you buy more toys? Do you fund your own charity, etc? Does it make a noticeable difference?

Strange question. Since the average salary is around $340,000 plus benefits are you asking me if that is too much? My answer is NO because the governement gets a BIG chunk of it.

One more thing- After Clinton wins the next election you won't be asking this question as taxes are going to increase. Also, Capital Gains will go up significantly 35-40% on investment profit.

Earn a good living while you can and invest, save for a rainy day.

Blade

 

[leaverus]

Strange question. Since the average salary is around $340,000 plus benefits are you asking me if that is too much? My answer is NO because the governement gets a BIG chunk of it.

One more thing- After Clinton wins the next election you won't be asking this question as taxes are going to increase. Also, Capital Gains will go up significantly 35-40% on investment profit.

Earn a good living while you can and invest, save for a rainy day.

Blade

Clinton won't win. The US isn't ready for a woman to be captain of the ship <--- not what i think but simply my assessment of this country still being conservative (backward?) in that sense compared w/ most of the rest of the world. Of course, i certainly also hope that she doesn't win because you're right - her policies would adversely affect my potential income.

 

[BLADEMDA]

Clinton won't win. The US isn't ready for a woman to be captain of the ship <--- not what i think but simply my assessment of this country still being conservative (backward?) in that sense compared w/ most of the rest of the world. Of course, i certainly also hope that she doesn't win because you're right - her policies would adversely affect my potential income.

Okay,

Obama would be worse for taxes and Medicine than Clinton. With the unpopularity of the war all the Polls show a Democrat is more likely to win the White House. Last night on cable the 'experts' think that the Democrats are more likely to win the White House next year. If this happens then expect 5-10% increase on your income taxes, a doubling of capital gains taxes and massive social spending programs (increased Medicaid, Medicare). These are NOT good things for a new graduate in Anesthesiology.

Blade

 

[Khalid]

Since the average salary is around $340,000 plus benefits are you asking me if that is too much? My answer is NO because the governement gets a BIG chunk of it.
Blade

Agree that the govt. takes WAY to much, but "$340k plus benefits" is NOT the average salary throughout the US--its so locally and regionally varied that it makes salary surveys virtually irrelevant.

If you're making $340k PLUS benefits in any major/minor metro area (hence where the vast majority of Anethesiologists want to live), then 340k plus benefits is doing very, very well and will exceed the "average."

Again, you're RIGHT ON with the taxes taking far to big a bite out of income...

 

[Gern Blansten]

In general, you're lifestyle will grow to match your income(unless you are very disciplined). Best to put off the big homes and nice cars for a couple of years to pay off some loans. The government does get way too much, but it is still a comfortable living.

On the political aspect, the democrats are poised to get into the white house so easily by just putting up a candidate that is even remotely likeable. Unfortunately for them, they do not have one. Seriously, a pile of gravel could win this election. Clinton, Obama, Edwards, Kerry, or Gore cannot. The republicans should just nominate "a pile of gravel" as their candidate. The legitimate choices that we have as candidates is pretty sad in both parties.

 

[BLADEMDA]

Agree that the govt. takes WAY to much, but "$340k plus benefits" is NOT the average salary throughout the US--its so locally and regionally varied that it makes salary surveys virtually irrelevant.

If you're making $340k PLUS benefits in any major/minor metro area (hence where the vast majority of Anethesiologists want to live), then 340k plus benefits is doing very, very well and will exceed the "average."

Again, you're RIGHT ON with the taxes taking far to big a bite out of income...

Okay,

here are the FACTS as published by the ASA in April's Newsletter (2007) in the practice management section. Please review the numbers for yourself. These are MEDIAN values and includes all benefits in them:

1. ACT Practice- $400,000
2. Trauma Center (private practice)- $414,000
3. 11-30 FTE Doctors- $390,000

Thus, you can see the MEDIAN published data supports my comment of $340,000 plus benefits.

Blade

 

[badgas]

In general, you're lifestyle will grow to match your income(unless you are very disciplined). Best to put off the big homes and nice cars for a couple of years to pay off some loans. The government does get way too much, but it is still a comfortable living.

On the political aspect, the democrats are poised to get into the white house so easily by just putting up a candidate that is even remotely likeable. Unfortunately for them, they do not have one. Seriously, a pile of gravel could win this election. Clinton, Obama, Edwards, Kerry, or Gore cannot. The republicans should just nominate "a pile of gravel" as their candidate. The legitimate choices that we have as candidates is pretty sad in both parties.

We will have 3 candidates to chose from. First there will be the ultra super liberal/socialist (hillary or obama), then there will be the liberal (rudy) and then there will be the ever present independent party (pile of gravel). I have high hopes for our independent candidate this election.

 

[Gern Blansten]

We will have 3 candidates to chose from. First there will be the ultra super liberal/socialist (hillary or obama), then there will be the liberal (rudy) and then there will be the ever present independent party (pile of gravel). I have high hopes for our independent candidate this election.

If anyone is interested in contributing to the candidacy of "Pile of Gravel," please let me know. I have contributed $2000 already. It should be a spirited campaign.

 

[Noyac]

Pilot Doc, I feel that once you reach certain minimum income you are pretty much happy with that income and anything above and beyond is just gravy. If you are someone that keeps pushing for more income in the field you will frequently be disappointed. But if my income went up 50-100% I wouldn't be any happier. I would retire earlier, however. I don't do this job for money. I if I did I'd still be at my last gig.

 

[dralex]

I truly believe that the "Pile of Gravel" stands up for the issues that really matter to us.
My vote is for "Pile of Gravel" for president.
The POG for the GOP...

 

[proclivity]

Strange question. Since the average salary is around $340,000 plus benefits are you asking me if that is too much? My answer is NO because the governement gets a BIG chunk of it.

One more thing- After Clinton wins the next election you won't be asking this question as taxes are going to increase. Also, Capital Gains will go up significantly 35-40% on investment profit.

Earn a good living while you can and invest, save for a rainy day.

Blade

i highly doubt capital gains will go up to 35 or 40%. The repercussions will be felt through the economy if this is allowed to happen. Too much wealth has been created by private equity firms in the past 7 months with their race to consolidate the sectors and offer a more balanced portfolio to their large investors.

Taxes, in general, are another thing. I am not so sure about that.

 

[badgas]

I truly believe that the "Pile of Gravel" stands up for the issues that really matter to us.
My vote is for "Pile of Gravel" for president.
The POG for the GOP...

POG for GOP >> the other POS for GOP.

 

[zippy2u]

My dos centavos: Make the most money ya can when you're young and able. Money = freedom; more money = more freedom. Everybody and their momma wants to take your money from ya when ya make a lot-- there are no exceptions. Hilliary will win the next election with Obama or Edwards as VP. USA is not ready for a black Pres although I'd welcome it. The line to become an ex-pat of the USA will lengthen in the future-- I'll be in that line BIGTIME. Your state medical boards are becoming cash cows, issuing fines for Mickey Mouse shiit for all medical professionals especially physicians. Strive with all your heart and soul for cash, check or credit card.... Regards, ---Zip

 

[Planktonmd]

My dos centavos: Make the most money ya can when you're young and able. Money = freedom; more money = more freedom. Everybody and their momma wants to take your money from ya when ya make a lot-- there are no exceptions. Hilliary will win the next election with Obama or Edwards as VP. USA is not ready for a black Pres although I'd welcome it. The line to become an ex-pat of the USA will lengthen in the future-- I'll be in that line BIGTIME. Your state medical boards are becoming cash cows, issuing fines for Mickey Mouse shiit for all medical professionals especially physicians. Strive with all your heart and soul for cash, check or credit card.... Regards, ---Zip

I couldn't agree more 😀

Welcome back Zippy.

 

[lushmd]

Michael Bloomberg for Prez anyone?

 

[GeddyLee]

Increased income taxes wouldn't be so bad if they changed the tax bracket to make it fair. Why should your 340K be taxed at the same rate as these CEOs making in the millions? If anything, an additional bracket should be added to hit the mega millionaires rather that people just making a living. Personally I think income taxes are already far to high in this country. Increase tobacco taxes...how about an obesity tax?...hit the people who use the most the hardest.

Or just pull out of Iraq and there will be loads of money for the feds to waste elsewhere. But make no mistake about it, the ugliest republican candidate would be far better than either Clinton or Obama for our interests.

 

[harryh]

I live on less than 60K per year. The rest after taxes goes into saving. So the more I make the more I can save. My goal is to add 15K per month of new money to my savings or about 500 per day.

I just finished reading Dave Ramsey "total money makeover". Dave Talks' about a "balance point" Where your savings generates enough money to cover your living expenses. Dave Ramsey assumes a withdrawal rated of 8% (12% rate of return- 4% rate of inflation =8% a bit optimistic) so I would need 750K in savings to generate enough money in returns to cover the money I need to live on. However, I am a little more conservative than Dave Ramsey and hope to avoid any possibility of running out of money in my 70's or 80's and think a 4% withdrawal is safer, I also want to have at least 100K per year of passive income so my goal is 2.5M.

The more I make the faster I can get there. While I probably will not retire from medicine, but I may slow down to part time. As Zippy so eloquently said, having money is freedom, and if work becomes a drag or reimbursement go down having money gives you the freedom quit and do what you want with out it negatively affecting your lifestyle.

 

[Trisomy13]

I just finished reading Dave Ramsey “total money makeover“. Dave Talks’ about a “balance point” Where your savings generates enough money to cover your living expenses.

I haven't read this book, but it reminds me of a graph my brother-in-law created for me (he's a financial advisor/planner and knows his game well). He made some basic assumptions when plotting out my future financial needs, one being that the client "dies penniless", i.e. how much do you have to save in order to break even and die at the age of 95 without a cent. Not entirely plausible, but it provides a starting point from which you can manipulate the variables to your expectations. What stood out was not the balance point, which is indeed important, but the steep plunge that occurs when you stop living off interest, and start living off savings. It is a rapid decline and really drove home the importance of saving early and conservatively.

Now of course, if you drive like I do, and plan on having a car that enables an early accidental departure, you can tweak that age down from 95 considerably and save less 🙄

 

[BLADEMDA]

i highly doubt capital gains will go up to 35 or 40%. The repercussions will be felt through the economy if this is allowed to happen. Too much wealth has been created by private equity firms in the past 7 months with their race to consolidate the sectors and offer a more balanced portfolio to their large investors.

Taxes, in general, are another thing. I am not so sure about that.

My info. comes from The WallStreet Journal. During the Carter years Capital Gains were taxed at the personal income tax rate which will return to 39.6% if Clinton or Obama wins.

I should clarify that I hope the top rate will only go back to 39.6%. During the Carter years the top rate was over 50%. Also, expect the top rate to apply to a lot more people (those making over $300,000 per year). This will be required to pay for the trillion dollar social programs like Medicare, Medicaid, Social Security, more Govt. Medicare for the uninsured, etc. The tax increase is not IF but when and how much.

Blade

 

[proclivity]

My info. comes from The WallStreet Journal. During the Carter years Capital Gains were taxed at the personal income tax rate which will return to 39.6% if Clinton or Obama wins.

I should clarify that I hope the top rate will only go back to 39.6%. During the Carter years the top rate was over 50%. Also, expect the top rate to apply to a lot more people (those making over $300,000 per year). This will be required to pay for the trillion dollar social programs like Medicare, Medicaid, Social Security, more Govt. Medicare for the uninsured, etc. The tax increase is not IF but when and how much.

Blade

here is my rationale: The more the feds tax investors, the less that they will invest in the capital gains arena. I know i will be included in that group and it is my contention that many of you -ologists will do the same.

My personal opinion, the capital gains tax should be 10% or less. Why?, you ask......let me expand: in order for wealth to be created we need a system that allows for wealth to be reinvested. At a tax rate of 40%+, IMO, it is certainly reasonable and understandable for a particular investor to forgo investing, in the classical sense (stocks, mutual funds, small business ventures) when these same individuals could simply work additional hours and see a larger percentage of the money that they earn relative to earning the same amount as an -ologist.

Case in point: ologist #1 invests 100k during year X and makes 100% on their investment inside of a year and pays a 40% capital gains tax. That is 40% on the return, $40k ending in a total 160k in their account....60k of which is the amount of gains. Ologist #2 does not invest anything and earns an additional 100k on top of his/her 300k salary to make a 400k salary for this particular year X. It certainly seems like ologist #2 would be keeping more of his/her total earning as compare to ologist #1 with this higher capitial gains tax.

If this wealth is taxed at such a high rate, the investors will see smaller rates of return and will be reluctant to reinvest a portion of their gains if they reinvest at all. In the immediate paragraph above, ologist #2 was certainly less stressed during year X since s/he was in cash and instead made the additional 100k doing what s/he loved to do......this is all separate from the fact that you could actually diversify in such a fashion (you had better have at least 5 stocks in discernibly different sectors) to actually gain 100% on your investment.

What would all of you do with the above scenario or a similar scenario?

 

[badgas]

here is my rationale: The more the feds tax investors, the less that they will invest in the capital gains arena. I know i will be included in that group and it is my contention that many of you -ologists will do the same.

My personal opinion, the capital gains tax should be 10% or less. Why?, you ask......let me expand: in order for wealth to be created we need a system that allows for wealth to be reinvested. At a tax rate of 40%+, IMO, it is certainly reasonable and understandable for a particular investor to forgo investing, in the classical sense (stocks, mutual funds, small business ventures) when these same individuals could simply work additional hours and see a larger percentage of the money that they earn relative to earning the same amount as an -ologist.

Case in point: ologist #1 invests 100k during year X and makes 100% on their investment inside of a year and pays a 40% capital gains tax. That is 40% on the return, $40k ending in a total 160k in their account....60k of which is the amount of gains. Ologist #2 does not invest anything and earns an additional 100k on top of his/her 300k salary to make a 400k salary for this particular year X. It certainly seems like ologist #2 would be keeping more of his/her total earning as compare to ologist #1 with this higher capitial gains tax.

If this wealth is taxed at such a high rate, the investors will see smaller rates of return and will be reluctant to reinvest a portion of their gains if they reinvest at all. In the immediate paragraph above, ologist #2 was certainly less stressed during year X since s/he was in cash and instead made the additional 100k doing what s/he loved to do......this is all separate from the fact that you could actually diversify in such a fashion (you had better have at least 5 stocks in discernibly different sectors) to actually gain 100% on your investment.

What would all of you do with the above scenario or a similar scenario?

You did not include that ologist#2 has to pay 35% federal and 5+% state income taxes on that extra 100K from working. Capital gains taxes will basically become equal to income taxes at 40% or more. And people won't stop investing. They'll piss and moan, but in the end those same people will bend over and take it... then will go vote to re-elect Hillary.