How long does it take the doctor to catch up to the janitor?

[zinciest]

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Fair enough. It might be revealing to see a bit of a breakdown as to what is contained in each category. The fact that 27% of physicians are working <40 hrs is probably inflated by the number of women who enter medicine and then stop cut down their practices to <30 hrs/wk. Those women generally make <$100k (I recall seeing a figure around $60-70k). I would also wonder who that 41-50 hrs (28%) is.

My previous statement of 60 hrs being typical was a bit high, but the following list of specialties shows that one would expect the average physician to work >50 hrs:

That's a pretty suspicious graph. I don't believe that radiologists work close to 60 hours a week. In fact, there's no way that there working hours are on par with general surgeons.

This is from the bls site:

In 2008, 43 percent of all physicians and surgeons worked 50 or more hours a week.

 

[BigEast55]

Present value of money is valid regardless of whether he saves or not. $25k in 1990 is always going to be worth more than $25k in 2010 with any non-zero interest rate.

This isn't true at all. You have to assure that you can have an interest rate greater than the rate of inflation of which the long-term average over the last century-ish is 3.73% [http://www.inflationdata.com/inflation/inflation/DecadeInflation.asp]. Certainly over the last decade it would have been hard to make a 3.73% return on your investment, most investments lost money. The S&P is down 0.46% in the last decade, the measurement against which many other investments are measured [http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=SPX]. Obviously if you put your money in gold you would be doing very well right now. Most savings accounts certainly make less than inflation. And all of this is assuming that the janitor wasn't renting, in which case his income was not contributing to his overall wealth and that he was able to even save anything at all, and at 25k/year, I doubt much was going to savings.

 

[zinciest]

If you're going to account for the decrease in the value of a dollar, then you should also assume that the janitor isn't on a static 25K salary. He's probably going to get cost of living raises over the course of a decade.

 

[randombetch]

This isn't true at all. You have to assure that you can have an interest rate greater than the rate of inflation of which the long-term average over the last century-ish is 3.73% [http://www.inflationdata.com/inflation/inflation/DecadeInflation.asp]. Certainly over the last decade it would have been hard to make a 3.73% return on your investment, most investments lost money. The S&P is down 0.46% in the last decade, the measurement against which many other investments are measured [http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=SPX]. Obviously if you put your money in gold you would be doing very well right now. Most savings accounts certainly make less than inflation. And all of this is assuming that the janitor wasn't renting, in which case his income was not contributing to his overall wealth and that he was able to even save anything at all, and at 25k/year, I doubt much was going to savings.

Right, as long as r > inflation (was trying to keep it simple 😳).

Whether or not the janitor actually saves is irrelevant. The value of the money he spends is unaffected by how he spends it.

 

[hqt331]

I'm no finance/econ expert but I think something everyone is missing is that the fact that you are paying off debt in your later years is nothing more than a deferred payment on the costs you sustained during med school. So, you cannot count tuition and total debt as two separate costs. You can, however, count tuition and interest paid on the debt as two separate costs. But this interest reflects the concept of time value of money: you got money right then (in med school) and you are paying for it later.

What I am trying to say in the end is that you do in fact have an income in med school, although it is coming from loans. This income pays for both tuition and living costs, which you would be incurring anyway. However, it is a given that doctors will later be able to pay off their loans later, while still being able to pay for their day to day living expenses. So, being a med student is not that different from being a janitor, finances-wise. You get just enough money to survive, just as a janitor would. You are simply "stealing" this money from a later you. So your years of med school through your earlier years of earning, you will essentially be earning what a janitor earns. In fact, during your earlier earning years, you will still probably be living better than a janitor, even with the debt payments. So to say that a janitor is "gaining on you" while you are in med school is not entirely true; your substantially higher salary (than a janitor's) during your early earning years allows you to "keep up" with the janitor. And after your debt is repaid, you're golden (compared to the janitor).