is 60 hours a week worth it if got you near a 7 fig salary?

[Candidate2017]

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60 hours is 12 hours a day x 5 days. So get up a 6am, get to work by 7am, then work straight through to 7pm with no break. Then go home tired, get home at 7:30..in bed by 10 so I'm not sleep deprived. See my family for 2.5 hours a day if I don't ever go the gym during the week. That schedule sucks.

60 total hours isn't much. Four 9s + one weekend day of 24 hour inpt coverage can get you to 60.

 

[Candidate2017]

It's possible. But with a 7 fig salary you are looking at an effective income of 600k even with a DBP of 225k. This seems tax inefficient. I (seriously) suggest if you really want to retire in your early 40s you do mostly 1099 income start an LLC and purchase commercial real estate on leverage. It's not too difficult to amass a commercial real estate portfolio of 3-4M by generating overall a net loss on your business. Alternatively, you can try to hire people to build a larger business -- though this would in the end be somewhat less passive (i.e. would require a medical director in your 40s to run the business).

The government doesn't want you to work this hard on labor. It strongly wants you to re-invest labor dividends into creating jobs and as such the tax code is written in this arguably weird way where capital gain (esp. long term) is taxed at a much lower rate..

Effective tax rate is much lower than 40%: Draw a $250,000 salary from your PC or LLP taxed at W-2 rates. The other $750,000+ is dividends, deferred comp, SEP, capital investment (including real estate/vacation homes) etc. The majority of your earnings will be taxed at a low to 0% rate.

 

[nexus73]

60 total hours isn't much. Four 9s + one weekend day of 24 hour inpt coverage can get you to 60.

What does that 24 hour weekend shift actually look like. Doesn’t sound like your actually working for 24 hours.

 

[Shufflin]

Effective tax rate is much lower than 40%: Draw a $250,000 salary from your PC or LLP taxed at W-2 rates. The other $750,000+ is dividends, deferred comp, SEP, capital investment (including real estate/vacation homes) etc. The majority of your earnings will be taxed at a low to 0% rate.

How is this possible? Long-term capital gains tax rate is 15% at an income of $250K. Deferred compensation include retirement plans, pension plans and stock-options, each of which are taxed when funds are either put in or taken out.

 

[TexasPhysician]

Effective tax rate is much lower than 40%: Draw a $250,000 salary from your PC or LLP taxed at W-2 rates. The other $750,000+ is dividends, deferred comp, SEP, capital investment (including real estate/vacation homes) etc. The majority of your earnings will be taxed at a low to 0% rate.

Dividends are taxed. Income pre-investment in RE is taxed. Oil/gas investments can have big deductions. There are certainly ways to get effective tax rate below 40%, but 0% isn’t happening.

 

[Ahamis]

It's not too difficult to amass a commercial real estate portfolio of 3-4M by generating overall a net loss on your business.

Can you explain how that works?

 

[NontradCA]

If making that much money is important to you then do it. It’s absolutey , 100% a personal decision what you want to do with your time. This is America. Do what you want as long as you don’t kill people or get sued a lot. Moreover, medicine is a business and there’s no disputing that. There’s no reason you should feel bad for making as much money possible as other fields do it as well.

 

[thepoopologist]

I think after a certain income a 40 hour week looks more appealing to me than more money

 

[finalpsychyear]

I think after a certain income a 40 hour week looks more appealing to me than more money

I agree with this. However if you were in a position where 40 hours gave you x dollars but an additional 20 would nearly give you 2x i feel that may drive more people than if it was just 1.5x

 

[Trismegistus4]

I think after a certain income a 40 hour week looks more appealing to me than more money

The way I think of it is, if you could quantify mental exhaustion, and plot it on the y-axis against number of patients seen in a day on the x-axis, the relationship would be exponential, not linear. After a certain point, no amount of money would be worth it.

 

[finalpsychyear]

The way I think of it is, if you could quantify mental exhaustion, and plot it on the y-axis against number of patients seen in a day on the x-axis, the relationship would be exponential, not linear. After a certain point, no amount of money would be worth it.

I agree with this long term. Some of those fresh out of residency may see fit to work more than they will eventually settle into especially to get loans paid off and start a nest egg. So you can argue working more for the first 2-3 years will actually help you either retire early or have a much more cush lifestyle and hours after that bit of a hustle.

 

[dl2dp2]

Can you explain how that works?

How do real estate investors avoid taxes? They invest in rehab properties and write down investments as expenses, then depreciate rental income. If you do it at a sufficiently large scale and mix practice income, you can potentially write down a large amount of non-personal consumption expense as tax deductible.

That said: 1) it's hard to consume investments, but that's not what the poster is talking about. He's talking about either invest post-tax in a taxable brokerage account or 2) tax defer. Real estate tax avoidance is in actuality a tax deferral strategy. If you need to say buy a boat or pay for college, you need to cash out, which means 1) capital gain taxes 2) transactional cost. In general this balances out. In practice real estate investments are more local and controllable, and in that way, riskier and more time consuming.

A separate issue: in some specialties practice liabilities can be great, so mixing investing with practice may be legally tenuous from asset protection perspective (personal assets are often protected in malpractice insurance, but practice assets may be less so). In psychiatry, the OPPOSITE may be true. You can get sued by your commercial tenants or customers, and your practice income may be at risk.

These are complicated things you should have a lawyer and an accountant for.

 

[MLT2MT2DO]

If you have no children and you want to retire early sure. 60 hours a week isn't a ton.