Here's a real life example of a new doctor's salary...

[rama kandra]

and now it is 500k, which is more than double and nearly triple its value as inflation and economics have taken form. Doctors are still stuck in the gutter dawg. I'm just playing, but I am excited to see how it changes in the future.

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[zinciest]

and now it is 500k, which is more than double and nearly triple its value as inflation and economics have taken form. Doctors are still stuck in the gutter dawg. I'm just playing, but I am excited to see how it changes in the future.

I don't want to hijack the thread so this is my last post on this topic, but it is not outpacing inflation. It was 200K in 1969. The median income was around $9000. Median income is now ~35000, and the president's salary has doubled. It is 400K, not counting all of the perks, but the same perks existed in 1969.

http://en.wikipedia.org/wiki/President_of_the_United_States#Compensation

I agree that it is a ridiculous salary, though.

 

[yeastfan21]

success and enterprise - your salary Does determine your success and enterprise. I hate to shatter the myth but someone who earns a good salary and has a important job, or provides entertainment or purpose has enterprise. I have no idea where this opinion comes from, that someone who is making lots of paper is somehow not contributing or deserves it. $$ matters, dont be under the impression that you can slide through any hoops just by 'returning value to society.'

True, $$ matters. And one's salary is a reflection of one's "enterprise," at least in the most literal economic sense. Which is what you seem to be talking about.

My point about enterprise (not sufficiently explained above) was simply to question the assumption that what one earns before taxation (or after taxation, for that matter) is a reliable measure of what one deserves. The two problems I see with this view are:
1) The value the market places on certain kinds of economic activity is often incompatible with their societal utility. Private equity firms are probably a good example of this disconnect, as they make millions for a small number of people but do not necessarily (the jury's still out on this though) produce any net benefits for the brands they purchase, the employees of these firms, or consumers.
2) More importantly, where the market does successfully reward ingenuity and skill and hard work and all that jazz, it fails to do so proportionally. Yes, the average CEO has worked harder and has a much rarer set of skills than an average worker from his/her firm. But CEOs today make 350x what their average employee makes. Does the CEO really work 350 times harder, or is he/she really 350 times smarter or more creative? And does he/she really deserve a 350-fold greater share of society's resources?

The outcomes of a market are generally the most efficient. They're not, however, the most moral. Often far from it, in fact. Which is why I think that progressive taxation is not exactly an oppressive punishment against the more talented people in society (which is how I interpreted, correctly or incorrectly, melanoleuca's comment that "success and enterprise are punished by our corrupt ruling class").

 

[rama kandra]

You are arguing semantics - they Do deserve 250 times the salary because their companies are earning a heck of a lot more than that. These boards elect officers and vote on pay, thus a public company is paying what is basically agreed upon. There are some moral issues here in what you have said and it sounds like a good MCAT essay but reality dictates otherwise.

Private equity? The definition of private property is essentially respect for ones own - I am allowed to do with my money what I please and if a pool of investors want to make a huge return they can risk their private capital. This is why I am going into private practice because I feel I can respect private property and capital better than anyone else can dictate. The market can be efficient but I believe I am moreso capable of running my own medical practice. I have that right and should never be suggested that morally speaking I am better off providing public service.

We could argue in circles about it, but philosophically I view intelligence and private property as hand in hand. It takes a leap of faith for me to go up a notch and include a moral argument just as it would be a step down for morality to be excluded from another. To each, his own.

Good arguments though - nothing wrong about questioning the status quo.

 

[mwall003]

Single, no kids compared to the other 30 some year old who got a quantitative finance degree and has 1,000,000+ in the bank from good i-banking skills.

Doctors should be given some sort of loan forgiveness or higher pay. Just my 2 cents

 

[rama kandra]

Worse is lawyers who now face a true oversupply and lack of consistent hiring and retaining salaries. Doctors are still earning very high salaries, and paychecks. Private practice allows you to work to your own goals - but there are inherent difficulties working in finance and investment banking. Very few people actually wind up at the position where they are taking home 1 million and have a stable job. There are plenty of shakeups - while medicine is a very long term job and the rewards are decent but nothing dizzying.

 

[RunningDiva]

Single, no kids compared to the other 30 some year old who got a quantitative finance degree and has 1,000,000+ in the bank from good i-banking skills.

Doctors should be given some sort of loan forgiveness or higher pay. Just my 2 cents

Many post-residency positions offer at least some loan forgiveness as a recruitment tactic. The classified ads in the back of NEJM have some examples.

I feel like I need a crash course in finances before MD employment. I got check book balancing skills but thats its...

 

[armybound]

Many post-residency positions offer at least some loan forgiveness as a recruitment tactic. The classified ads in the back of NEJM have some examples.

I feel like I need a crash course in finances before MD employment. I got check book balancing skills but thats its...

A lot of schools will run electives on business sorts of considerations for students. If not, be pro-active and set up some lectures for your classmates.

 

[RunningDiva]

A lot of schools will run electives on business sorts of considerations for students. If not, be pro-active and set up some lectures for your classmates.

Good call. I feel like just even a little bit of saviness can help in the long run for saving, retirement, debt repayment, etc. knowledge. Its downright scary to think of 200 grand debt and not know the basic economics behind it.

 

[morning]

It must be fun going through life believing that:
--one's pre-tax salary can be equated with one's "success and enterprise" (by which I assume you mean the amount one has contributed to society, and not the trivial meaning of how much $$ one has accumulated)
--$180,000 in post-tax income (which by my calculations would put you somewhere around the top 1% of earners in the richest country in the world) would be merely "not bad"
--a system in which very hardworking people (doctors) have twice as much purchasing power as the average worker (those earning $60,000) is "punishing" the doctor.

Listen, I think doctors deserve to make a good living. I don't want to see average physician salaries (relative to costs of living) decline any further, and I wish students didn't have to go into such insane debt to pursue what I consider an extremely noble profession.

Still, I continue to be astounded by the number of people on SDN who seem committed to proving that physicians in the US are condemned to a mediocre quality of life. Not only is this a ridiculously warped view of reality, but it tends to rely on an annoying combination of self-congratulation ("oh my god it's so hard to get into medical school and so much work to become a doctor and i'm so so super smart, way smarter than anyone making $60K") and Ayn Rand bull**** ("if only The Government didn't punish me for my brilliance!").

That's pretty much the gist of it.

You have to remember that most docs have a science degree. They then went into a graduate school focused almost entirely on science and health. There are non-trads with finance or social science degrees as well as traditional applicants with those credentials, but over 50% of all med school matriculants have some form of bio degree. There is almost no understanding of income inequality and distribution in America in that sort of framework. Being a doctor qualifies you for a hell of a lot, but it doesn't make you qualified to understand or pontificate about socioeconomics.

Top 5% of all income earners: $75,000 and above.

Got into a rather glorious e-debate once with a girl who said her parents weren't rich with their combined 200k post-tax income because they rarely took vacations and didn't have a new car. A bit of prodding revealed that they were paying for her and her brother's private liberal arts college tuition. But she didn't consider that a "luxury", it was a necessity.

Redefine what you consider a luxury and a necessity and you will be much happier. For some people, having a car that runs on a daily basis is a luxury, as is owning a house in a reasonably safe neighborhood and being able to subsidize SOME of their childrens' in-state tuition requirements. The problem is that we are conditioned to believe that "rich" equals a gigantic house and a fancy car, and if you don't have that, well, you aren't wealthy. Being in the top 5% isn't good enough...because most people are not actually aware of where "above 95% of all income earners" actually starts. Which is, again...75k.

 

[Khaos05]

Hey guys, I'm kind of digging up an old thread here, but I'm curious to see what the consensus is on this topic now (after Obama-Care passed).

Would OP like to give real life example of Trauma Surgeon? I'm about to graduate with my undergrad degree in about 15 days and I'm looking at taking one year to get remaining prereqs and go to med school. However, I have more people telling me that I'll come out of med school and residency with $500k in debt and make $100k and never be able to repay loans.

Here are some stats for you guys to consider:
1. the state school i'm looking at (best chance for me) says that cost of attendance is roughly $155k.
My budget is roughly this:
$800 for house payment (yes a brand new 3BR,2B home)
$175 for utilities (cable, internet, water, electric, etc.)
$800 for cars (2)
$200 for gas
$300 for insurance (auto)
$400 for food

I wouldn't mind living off $80k for a few years while I paid off loans. I just want some honest and sensible advice. Don't want someone to exaggerate and tell me i'll have $1.7M in loans and be making $29k. If my situation would be like the OP, I'd be fine; my wife and I have lived for the past 3 years on about $15k/yr. She has worked since Sep09 making $30k and we have more $ than we ever have and can't find places to spend it (ok, well maybe i often do )

Bottom line: I want honest advice. I see people on this website saying they'll come out with 200K in loans and make a "crappy" $250k. In my book $250k /= crappy salary or lifestyle. If I had no school debt, I'd be happy bringing home $120k to pay bills and still have $ left over to play with.

 

[MedMan25]

Hey guys, I'm kind of digging up an old thread here, but I'm curious to see what the consensus is on this topic now (after Obama-Care passed).

Would OP like to give real life example of Trauma Surgeon? I'm about to graduate with my undergrad degree in about 15 days and I'm looking at taking one year to get remaining prereqs and go to med school. However, I have more people telling me that I'll come out of med school and residency with $500k in debt and make $100k and never be able to repay loans.

Here are some stats for you guys to consider:
1. the state school i'm looking at (best chance for me) says that cost of attendance is roughly $155k.
My budget is roughly this:
$800 for house payment (yes a brand new 3BR,2B home)
$175 for utilities (cable, internet, water, electric, etc.)
$800 for cars (2)
$200 for gas
$300 for insurance (auto)
$400 for food

I wouldn't mind living off $80k for a few years while I paid off loans. I just want some honest and sensible advice. Don't want someone to exaggerate and tell me i'll have $1.7M in loans and be making $29k. If my situation would be like the OP, I'd be fine; my wife and I have lived for the past 3 years on about $15k/yr. She has worked since Sep09 making $30k and we have more $ than we ever have and can't find places to spend it (ok, well maybe i often do )

Bottom line: I want honest advice. I see people on this website saying they'll come out with 200K in loans and make a "crappy" $250k. In my book $250k /= crappy salary or lifestyle. If I had no school debt, I'd be happy bringing home $120k to pay bills and still have $ left over to play with.

Best case scenario:
1. You get accepted to your state medical school
2. Your state medical school doesn't raise tuition significantly during the 4 years you attend (the state medical school I attend has raised tuition roughly 45% since my first year, it is projected to increase an additional 20% before I graduate)
3. You finish with your estimated $155K
4. You decide you still want to do trauma surgery after medical school is over + you are able to land a trauma surgery residency
5. Nothing dramatic happens to physician salaries and you collect a handsome $350K salary

Worst case scenario:
1. You end up going to an out of state school -> tuition costs double what your state school charges -> you finish $300K in the hole
2. You decide with a wife and x number of kids that you would rather not be up at 4 AM 3 nights a week sewing up gunshot wounds for people who like to rob liquor stores and end up choosing a specialty that affords you more of a family life
3. Obamacare leads to physician payment cuts and you end up making closer to $100K
4. You spend a total of 15-20 years (from the beginning of college to when you've paid off your loans) living like a student

As you can see, there's a lot to consider. I don't think either one of these scenarios is beyond impossible if you end up going into medicine.

 

[PedsDoc14]

As part of my job, I work with Internal $63,000 in taxes per year @ 35% rate

n/m the ongoing debate about what is a comfortable and adequate salary and lifestyle, one of the biggest misconceptions out there, especially for people complaining about income taxes and losing all their hard earned money to others, etc., is what a marginal tax rate is and how it works. 35% is the top marginal rate which for 2010 does not start until 373k, and you only pay 35% of all income over that amount. This person would pay 10% on the first $8,375 of their income, 15% on all income between $8,376 and $34,000, and so on. Now of course there are state taxes, FICA, sales tax, etc. all of which add to the tax burden, but there are also deductions to be had, especially with her theoretical mortgage. But I'm too tired and lazy to try to figure out what this person would pay in taxes, but if it was 35% of their income I would recommend that they get a new accoutnant.

 

[Narmerguy]

The physician profession will never be in a situation where attending a medical school and paying full tuition will prevent you from being able to get out of debt. That people continue to speculate and complain about this in the future is absurd. If a school was too expensive for students to afford under current doctor salaries, no one would attend.

 

[PedsDoc14]

The physician profession will never be in a situation where attending a medical school and paying full tuition will prevent you from being able to get out of debt. That people continue to speculate and complain about this in the future is absurd. If a school was too expensive for students to afford under current doctor salaries, no one would attend.

hear hear

plus like the avatar

 

[plauto]

$1800 for a mortgage is actually on the very low side. With average property taxes built in that figure, assuming that's a 30 year loan, it would compare to approximately $300,000, probably slightly less. While that looks like a lot to many of you, it does not get you anything decent in many areas of the country ( and no, I'm not talking about Manhattan....)

 

[anbuitachi]

28 weeks per year and gets 180k as internist? That is one nice job!!

 

[ThaliaNox]

$1800 for a mortgage is actually on the very low side. With average property taxes built in that figure, assuming that's a 30 year loan, it would compare to approximately $300,000, probably slightly less. While that looks like a lot to many of you, it does not get you anything decent in many areas of the country ( and no, I'm not talking about Manhattan....)

I'm not going to get into the argument about what'll get you a "decent house" because that's relative, but I will argue against the idea that $1800 is on the "very low side." I would imagine that sort of figure is actually at least the upper half or even upper quarter of what people pay for a mortgage.

 

[cah87]

I know this is an old thread, but there's a reason to opt for a longer repayment that hasn't been mentioned. I'm surprised no one mentioned inflation. 200k could buy you a lot more 20 years ago than it can now. If you do a longer repayment more of your monthly payment is interest, which is tax deductable. You can also use that money now. As mentioned earlier, some employers match up to a certain percentage of your 401K contribution. Plus if you consolidate your loans to a lower interest rate, your investment could make just as much and often more. When you factor in inflation, it's a done deal for me. The downside is the unforeseen circumstances that can interrupt your income, which is more likely to occur over a 20 year period than over a 5 or 10 year period.

The original budget leaves out several things, but several things are over budgeted. I pay <90 for digital cable and internet. My phone plan is 55 a month for unlimited minutes + 300 txt messages (only an extra 20 for data plan). Car payment and insurance seems excessively high to me. I commute 60 miles round trip to work and I pay a lot less than 150 on gas. The 150 dollars for gas/electric/water seems low, but if it is a newer place it'll probably be well insulated. A health savings plan, 401K, and IRA are all tax deductible. This can be taken out of &#8216;savings' and it'll lower how much is taken out in taxes. Point is that you can be extremely well off with a large amount of debt and without getting into a high paying specialty. I wouldn't want to do 7 12 hour shifts in a row though.

 

[skiddoc]

I'm not going to get into the argument about what'll get you a "decent house" because that's relative, but I will argue against the idea that $1800 is on the "very low side." I would imagine that sort of figure is actually at least the upper half or even upper quarter of what people pay for a mortgage.

agreed. 1800 is very solid, not even close to being on the low side.

 

[mysterychick]

200k could buy you a lot more 20 years ago than it can now.

and that is what my business major roommate call the time value of money

 

[plauto]

agreed. 1800 is very solid, not even close to being on the low side.

you guys have no clue what regular homes in regular areas of the country cost. Pick up a century 21 brochure and then add the numbers into a mortgage calculator, add property taxes, and then come back here and tell me what $1800 a month gets you....

 

[MedMan25]

I know this is an old thread, but there's a reason to opt for a longer repayment that hasn't been mentioned. I'm surprised no one mentioned inflation. 200k could buy you a lot more 20 years ago than it can now. If you do a longer repayment more of your monthly payment is interest, which is tax deductable. You can also use that money now. As mentioned earlier, some employers match up to a certain percentage of your 401K contribution. Plus if you consolidate your loans to a lower interest rate, your investment could make just as much and often more. When you factor in inflation, it's a done deal for me. The downside is the unforeseen circumstances that can interrupt your income, which is more likely to occur over a 20 year period than over a 5 or 10 year period.

I'd say that's debatable in this economy. Inflation was less than a percentage point for most of 2009. Interest rates on student loans are relatively high when compared with bank interest rates. If you're income is over $70K you're not eligible for the tax deduction on student loan interest. Assuming you dragged out your loan for 20 years, I would argue that the decision to do that would largely depend on where you think interest rates are going to go in the next 20 years, which is anyone's guess. Right now interest rates are at historic lows (as well as inflation) which would suggest paying off a relatively high interest loan would be a smarter move.

 

[MedMan25]

you guys have no clue what regular homes in regular areas of the country cost. Pick up a century 21 brochure and then add the numbers into a mortgage calculator, add property taxes, and then come back here and tell me what $1800 a month gets you....

It all depends on where you live and the standard of living you require. In Phoenix, $1800/mo could put you in a nice neighborhood.

 

[MegaSpectacular]

you guys have no clue what regular homes in regular areas of the country cost. Pick up a century 21 brochure and then add the numbers into a mortgage calculator, add property taxes, and then come back here and tell me what $1800 a month gets you....

dude, you don't know what you're talking about. Most mortgates are not above 1800$.

Cali, NY, Florida, etc... yeah. but prob more than half of the states in the US you can do pretty well with a mortgage of $1800

 

[DrBowtie]

I know this is an old thread, but there's a reason to opt for a longer repayment that hasn't been mentioned. I'm surprised no one mentioned inflation. 200k could buy you a lot more 20 years ago than it can now. If you do a longer repayment more of your monthly payment is interest, which is tax deductable. You can also use that money now. As mentioned earlier, some employers match up to a certain percentage of your 401K contribution. Plus if you consolidate your loans to a lower interest rate, your investment could make just as much and often more. When you factor in inflation, it's a done deal for me. The downside is the unforeseen circumstances that can interrupt your income, which is more likely to occur over a 20 year period than over a 5 or 10 year period.

The original budget leaves out several things, but several things are over budgeted. I pay <90 for digital cable and internet. My phone plan is 55 a month for unlimited minutes + 300 txt messages (only an extra 20 for data plan). Car payment and insurance seems excessively high to me. I commute 60 miles round trip to work and I pay a lot less than 150 on gas. The 150 dollars for gas/electric/water seems low, but if it is a newer place it'll probably be well insulated. A health savings plan, 401K, and IRA are all tax deductible. This can be taken out of &#8216;savings' and it'll lower how much is taken out in taxes. Point is that you can be extremely well off with a large amount of debt and without getting into a high paying specialty. I wouldn't want to do 7 12 hour shifts in a row though.

No more low consolidation rates. You're stuck at 6.8 or 8.6 for the life of the loan or until new legislation. Good luck beating those numbers with investments.

 

[MegaSpectacular]

No more low consolidation rates. You're stuck at 6.8 or 8.6 for the life of the loan or until new legislation. Good luck beating those numbers with investments.

I always hear these schemes of using tax deductible interest to put monies into investments and work a sophisticated system...

just pay off the loan. You will be better off. People who work these plans rarely factor everything in, and while it looks good on paper, your predicted returns hardly even work out how you wanted.

 

[Narmerguy]

hear hear

plus like the avatar

Thanks

 

[cardiology88]

As part of my job, I work with Internal Medicine physicians who finished residency, and are looking for work.

Here's is a real example:

Female, unmarried, no children, 29 years-old - just finished three years of Internal Medicine residency at the hospital represented by my avatar. She decided to accept a five year contract to work as a hospitalist in another state starting November 1. Contract is with the hospital owned P.A. and stipulates: twelve hours per shift, alternating seven days on, seven days off (28 weeks of work time per year); she will work flexible hours, sometimes nights, others days. She wants the every other week schedule for personal reasons, and so that she can have the chance to do some clinical research. She has decided to pay off all of her student loans over the next five years; with interest, $240,000.

Here's her budget:

$180,000 gross in pay per year (plus annual bonus, ~ $5000)
$63,000 in taxes per year @ 35% rate
$117,000 take home pay per year

$9750 per month take home pay

----------------------------------------------------------

Average per month expenses:

$1800 mortgage/insurance for 2 bed, 2 bath upscale condo
$120 cable/internet
$150 gas/electric/water (higher per month in summer lower in winter)
$750 car payment/insurance
$150 gasoline
$120 cellphone
$400 food/dining
$200 misc entertainment (netflix, online music websites, movies, etc.)
$400 misc other (her consumer buying allowance, travel)
$4000 student loans

$8150 total

$1660 go into savings

----------------------------------------------------------

At the end of her five year contract she will be 34 years old, have five years of equity in her home, own her car, have her student loans paid, and have $100,000 cash in the bank.

Wow thats an amazing scenario. Seems too good to be true however. After hearing all the negativity and doomsday predictions on SDN I forgot that medicine is still a lucrative career.

 

[guestdoc]

dude, you don't know what you're talking about. Most mortgates are not above 1800$.

Cali, NY, Florida, etc... yeah. but prob more than half of the states in the US you can do pretty well with a mortgage of $1800

You don't watch much HGTV, do you? Or happen to pick up those little fliers for the houses on sale in neighborhoods that you'd like to live in?

An 1800 dollar house note is not in the wrong ballpark for a good estimate. If you want a family home in a good neighborhood, you'll be in that price range, or higher if you want more niceties. I'm in a small condo in an area with a relatively low cost of living and and 1800 a month is not as far away as I would have hoped. Oh, and the condo is probably not up to par with what you'd be looking for as a recently minted real doctor. Or as anyone who happened to make a solid salary.

 

[ThaliaNox]

You don't watch much HGTV, do you? Or happen to pick up those little fliers for the houses on sale in neighborhoods that you'd like to live in?

An 1800 dollar house note is not in the wrong ballpark for a good estimate. If you want a family home in a good neighborhood, you'll be in that price range, or higher if you want more niceties. I'm in a small condo in an area with a relatively low cost of living and and 1800 a month is not as far away as I would have hoped. Oh, and the condo is probably not up to par with what you'd be looking for as a recently minted real doctor. Or as anyone who happened to make a solid salary.

Yes, because reality TV is where we should be basing our expectations.

I wasn't arguing that $1800 would get you a super swanky abode. My argument was that $1800 was by no means towards the bottom end of the distribution of mortgages in this country. I'm not going to get into an agument about what kind of house that money would get you, because we can both find examples at both ends of the spectrum of quality for that money. The point is that to the average person, that is more than they pay for their mortgage.

 

[Zera]

60K to taxes...nice

 

[Slack3r]

The physician profession will never be in a situation where attending a medical school and paying full tuition will prevent you from being able to get out of debt. That people continue to speculate and complain about this in the future is absurd. If a school was too expensive for students to afford under current doctor salaries, no one would attend.

Umm, look at the law profession. There have been numerous schools popping up over the years willing to take pretty much anyone from the low-low price of $160k. Then the people from these bottom of the barrel law schools can't get jobs because the market is already too saturated with lawyers. If you think physicians salaries won't drop, you're not paying attention: THEY ALREADY ARE. Cardiology is seeing Medicare cuts on the order of 40%, and you can expect private insurance to follow.

 

[rama kandra]

But there is a crisis for healthcare professionals, not legalese. Don't 'umm' people trying to look smarter than you actually are, Slacker.

 

[Slack3r]

But there is a crisis for healthcare professionals, not legalese.

Says who, CNN? Besides, the govt is pushing to fill this alleged "crisis" with expanded mid-level practitioners. What happens then? With the cost of medical education rising and the salaries of attending physicians dropping, it's not a far stretch to assume the eventually some of these private med schools will no longer be affordable on some doctor's salaries (i.e. primary care perhaps?).

Don't 'umm' people trying to look smarter than you actually are, Slacker.

Nice condescension, btw. Shouldn't you be playing armchair psychiatrist somewhere?