MD & DO Medical school debt is not nearly as bad as people make it out to be

[Vivid_Quail]

The following real life quotes from a variety of people have inspired this post:

• "Physicians barely can afford to raise a family with the amount of medical school debt we are forced to have"
• "Physicians don't earn that much once you account for medical school debt"
• "Just do finance or law if you really want to make money. You won't get rich doing medicine"
• "I am still paying off my debt and I graduated med school 20 years ago. Just wait until you have kids...a physician's salary doesn't go as far as you think."

It is pretty tiring having the same conversation over and over again on forums (if talking to a resident or attending) and in real life (if talking to a fellow med student) about how American medical school debt is nothing in comparison to American physician salaries. So, hopefully I can convince a few more people of the reality of basic finances by sharing my rant of how you don't need a laughable $600k/yr salary to pay off a $300k 10 year loan. Why $600k and why did I write this dumb rant? That was the recommended salary needed for $300k of debt by an attending on this website. Oh, also remember that only 17% of American medical students have >$300k of total student loan debt so this is a pretty extreme scenario (I am one of those 17%, yay multiple degrees before med school). Anyways, here it is:

Saying you need to earn 600k pretax to pay off 300k in loans is a hilarious and sad example of how horrible some physicians are with money, for a variety of reasons.

600k pretax is WORST CASE (Los Angeles, filing single, not married) $340k post tax or a ridiculous $28,300 PER MONTH after taxes. Now, let's say it took you a long and difficult 7 years after med school to become an attending (not unheard of for gen surg + fellowship or neurosurgery, otherwise, PGY-5 or 6 is where most high paying specialties like anes, rads, ortho, surgical optho, Mohs derm finish training, but we are talking about a worst case here). Let's also say for your $300k of debt you payed the minimum income based payment using the REPAYE plan during residency/fellowship. This puts your interest rate at about 3%. We will just ignore those little income-based payments and pretend you just let your debt balloon from interest with 0 payments (makes the math easier). Again, this is worst case, but with some financial acumen because you did use REPAYE to get half of your interest each month paid by Uncle Sam.

Now you are an attending and your debt is $370,000 in 2021 dollars (your debt increase in reality has barely out paced inflation...your inflation adjusted interest rate is more like 1-1.5% but we are doing worst case here so we will ignore that). You don't know any better so you don't refinance your loan down to 3% from 6% now that you make too much money to qualify for IBR/REPAYE.

Ok, here is the hard part: you have just 3 years to repay your loan (10 year loan - 7 years of residency = 3)!!!! Oh no!!! Sounds like a financial disaster right? Not at all. Your monthly loan payment for $370,000 of debt paid that needs to be paid off in 3 years is $10,700/month. So every month for 3 long years, you throw $10k at your loans and have to live like a peasant off $17,600/month post tax. Or in other words, you are going have a net income of $211k/year post tax and after loan payments. Better get used to ramen and a 300 square foot apartment in a rough part of town. For reference, that post-tax salary after loan payments is what a single person in LA making $350k would bring home...also known as the 97-98th percentile household income in the US.

Now, a more realistic scenario is making $320k/yr as an FM trained hospitalist. You want to pay off your debt quickly so you take a job in a state with no state income tax and a lower cost of living. You are lucky enough to be married by age 30 so you get that sweet sweet "married filing jointly" tax break. You are looking at $250k/yr or $20,800/month post tax . You are used to living off $55k/yr as a resident, or about $4,000/month post tax. You give yourself a 100% raise so now you spend $8000/month. You throw the remaining $12,800k of disposable income at your loans and pay it off in 2 years and 4 months. Afterwards, you ride off into the sunset working an average of 42hr/week making an income in the top 2-3% of one of the richest countries in the world.

Bonus fun fact: if you want to get about of debt in a year after your 3 year FM residency, work residency hours for a year (65hrs/week) and pick up extra hospitalist shifts. You can clear $500k pretax/$366k post-tax...live off $46k, pay off your $320k in loans in one year.

Tl;dr: you don't need $600k/yr to pay off a 10-year $300k loan. You can knock that amount of debt out in 2-3 years in a specialty with a 99% match rate as long as you break 210 on step 1. Thank you for coming to my ted talk.

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[Tenk]

Cool.

 

[slowthai]

1. Merrily scrolling through SDN as per usual
2. Sees controversial thread title
3. Rubs hands together. "This should be good hehe"
4. Clicks thread
5. Smiles all villainy

 

[VA Hopeful Dr]

1. Merrily scrolling through SDN as per usual
2. Sees controversial thread title
3. Rubs hands together. "This should be good hehe"
4. Clicks thread
5. Smiles all villainy

View attachment 330988

I haven't seen such garbage math since I graded papers for intro chemistry.

 

[Banco]

I mean, it’s doable for the vast majority of cases. Still sucks ass that we are charged obscene amounts.

just to change your perspective on the concept of medical school cost, in Germany the yearly cost for a student is 1000€ - that’s less than how much step 2 alone used to cost lmao. And on top of that they get 800€ per month from the government.

I’m all for realistic solutions to get out of **** situations. But I’d rather not end up in these situations to begin with. Higher education needed cost reform like 10 years ago. So you’re correct technically, no one needs a 600k salary to make it work. Physicians still end up earning a lot compared to society at large. But the principle of being charged 70k a year and then have it thrown at your face as a “privilege” is bonkers to me.

 

[Lem0nz]

I got a sign on bonus that’s going to pay off my Masters.

yeet!

 

[deleted645092]

You missed a few things;

1) The attending you spoke with who actually went through it is going to know much more about the nuances of debt and payment plans.

2) You ignored the fact that you’ve also missed out on starting your family, retirement investments/ savings, buying a home, and pretty much everything else all of your peers got to start planning and executing in their early 20s rather than after 30. That’s a lot of ground to make up and doing it all at once doesn’t leave you with much.

3) >50% of physicians graduate and go either into outpatient primary care or hospitalist positions earning between 200-300k. 40% base tax rate plus 10k/ month for loans is leaving you with between 20-30k leftover to do all the things I mentioned above.

4) An increasing trend is to move somewhere “undesirable” in the middle of nowhere for 2-3 years to get that above average salary you’re talking about. Most aren’t wanting to start their family during that period knowing it’s basically a temp job.

5) 600k is BEST case. You’re assuming everyone is a cardiologist. I also love that you’re assuming sub-20% tax rate lmao.

Are you trolling?

 

[Vivid_Quail]

You missed a few things;

1) The attending you spoke with who actually went through it is going to know much more about the nuances of debt and payment plans.

2) You ignored the fact that you’ve also missed out on starting your family, retirement investments/ savings, buying a home, and pretty much everything else all of your peers got to start planning and executing in their early 20s rather than after 30. That’s a lot of ground to make up and doing it all at once doesn’t leave you with much.

3) >50% of physicians graduate and go either into outpatient primary care or hospitalist positions earning between 200-300k. 40% base tax rate plus 10k/ month for loans is leaving you with between 20-30k leftover to do all the things I mentioned above.

4) An increasing trend is to move somewhere “undesirable” in the middle of nowhere for 2-3 years to get that above average salary you’re talking about. Most aren’t wanting to start their family during that period knowing it’s basically a temp job.

5) 600k is BEST case. You’re assuming everyone is a cardiologist. I also love that you’re assuming sub-20% tax rate lmao.

Are you trolling?

Are you trolling...? I mean if you are going to do a 5 point rebuttal, might as well read the original post.

1) The attending you spoke with who actually went through it is going to know much more about the nuances of debt and payment plans.

What nuances did I miss?

2) You ignored the fact that you’ve also missed out on starting your family, retirement investments/ savings, buying a home, and pretty much everything else all of your peers got to start planning and executing in their early 20s rather than after 30. That’s a lot of ground to make up and doing it all at once doesn’t leave you with much.

I did not ignore that, I thought it was implied that you have plenty of money left over each month to save for retirement, buy a house, and start a family. Refer to my initial point that many physicians are bad with money if you think $8k/month is not enough to live very comfortably. If you really feel like you need to call JG Wentworth because you need cash now, you can pay off your loans in 6 years at a loan payment of $5,000/month and have $15,000/month of spending money for a mortgage and various other things until you pay them off.

3) >50% of physicians graduate and go either into outpatient primary care or hospitalist positions earning between 200-300k. 40% base tax rate plus 10k/ month for loans is leaving you with between 20-30k leftover to do all the things I mentioned above.

Clearly you have never filed taxes. To have a 40% effective tax rate you would need to be living in California (high state income taxes), single, and making over $400k--single in CA effective tax rate for 200k is 34% and 300k is 38%, drops down to 27% and 30% if you are married. If you are married in California you need to make $825k to have a 40% effective tax rate lol. I clearly said it is a better idea to live in a state without state income tax...in Texas or Tennessee for example (both desperately need FM/IM PCPs and hospitalists), your effective tax rate on $320k if married is 23%...on $200k or $300k is it 21% and 22% respectively.

4) An increasing trend is to move somewhere “undesirable” in the middle of nowhere for 2-3 years to get that above average salary you’re talking about. Most aren’t wanting to start their family during that period knowing it’s basically a temp job.

Yeah, because infants and toddlers really care about if their parents job is "basically a temp job." Also, undesirable doesn't have to mean BFE, it can mean in or near a mid-sized to large city in the South or Midwest. It just means "not the Northeast or West Coast."

5) 600k is BEST case. You’re assuming everyone is a cardiologist. I also love that you’re assuming sub-20% tax rate lmao.

I clearly said that $600k was a meme level salary that an attending on SDN said was needed to pay off $300k in debt on a 10 year loan. I carried over my rant from that discussion. When I say worst case in terms of $600k, I mean taxes. I made sure to also run through a realistic scenario of $320k for a hospitalist. Oh, I also never used a sub 20% tax rate lmao. Check your math. The tax rates of low 20s I used are accurate. Again, check your math.

Thank you for your attempt at a rebuttal though. You highlighted a bunch of common misconceptions and then also proved my point that medical students and physicians are so intrenched that they are getting screwed by debt that they will make up numbers and arguments out of thin air.

 

[tryaway]

You missed a few things;

1) The attending you spoke with who actually went through it is going to know much more about the nuances of debt and payment plans.

2) You ignored the fact that you’ve also missed out on starting your family, retirement investments/ savings, buying a home, and pretty much everything else all of your peers got to start planning and executing in their early 20s rather than after 30. That’s a lot of ground to make up and doing it all at once doesn’t leave you with much.

3) >50% of physicians graduate and go either into outpatient primary care or hospitalist positions earning between 200-300k. 40% base tax rate plus 10k/ month for loans is leaving you with between 20-30k leftover to do all the things I mentioned above.

4) An increasing trend is to move somewhere “undesirable” in the middle of nowhere for 2-3 years to get that above average salary you’re talking about. Most aren’t wanting to start their family during that period knowing it’s basically a temp job.

5) 600k is BEST case. You’re assuming everyone is a cardiologist. I also love that you’re assuming sub-20% tax rate lmao.

Are you trolling?

I actually 100% agree with @Vivid_Quail , and I think you, like many other people in medicine are the ones missing the large point.

I am honestly sick of this tired excuse of “missing out on starting family, retirement/investments, savings, buying a home, etc etc etc...” These are excuses.

1. If you think you need to wait until you finish training to invest/contribute to your retirement, you obviously don’t invest.
The average diversified investment portfolio has historically performed at 8-9%/year return. You can literally use student loans in med school to invest and still make a profit.
In 2016, I was a med student and I gave my brother $500 (ALL student loan money at a rate of 6.8%) to invest in Tesla for me. I have enough from that to put a down payment on a house if I choose. And no, this was not “luck”. People who really care to be knowledgeable about investing and savings know that you do NOT have to “wait till you finish” to start your life or investments.
THIS is the problem with people in medicine, they want to make a **** ton of money at a young age, yet don’t know the first thing about money.
2. If you are graduating residency in 2021 and going into outpatient PCP or hospitalist to only take home 250k with a 300k or so loan burden, and you are NOT receiving any type of loan repayment from your job or through a FQHC, YOU are the one playing yourself.
3. Finally, I can not stress this enough - NEGOTIATE YOUR CONTRACT! 250k salary IS enough to pay off your loans. Negotiate loan repayment, negotiate daycare costs (my institution will not pay back loans but will cover full time day care at our institution)
4. Actually this is really the last point. Stop going into low paying specialties if you know you will have 400k in loans after training. I don’t care about your passion, you simply can not afford to be an outpatient pediatrician making $180k. And before the excuses start again about competitiveness- I matched anesthesia with a 202 step 1. I plan on staying at my home program after graduating, current contracts going for $500k base rate, yes major city.

 

[VA Hopeful Dr]

Are you trolling...? I mean if you are going to do a 5 point rebuttal, might as well read the original post.

What nuances did I miss?

I did not ignore that, I thought it was implied that you have plenty of money left over each month to save for retirement, buy a house, and start a family. Refer to my initial point that many physicians are bad with money if you think $8k/month is not enough to live very comfortably. If you really feel like you need to call JG Wentworth because you need cash now, you can pay off your loans in 6 years at a loan payment of $5,000/month and have $15,000/month of spending money for a mortgage and various other things until you pay them off.

Clearly you have never filed taxes. To have a 40% effective tax rate you would need to be living in California (high state income taxes), single, and making over $400k--single in CA effective tax rate for 200k is 34% and 300k is 38%, drops down to 27% and 30% if you are married. If you are married in California you need to make $825k to have a 40% effective tax rate lol. I clearly said it is a better idea to live in a state without state income tax...in Texas or Tennessee for example (both desperately need FM/IM PCPs and hospitalists), your effective tax rate on $320k if married is 23%...on $200k or $300k is it 21% and 22% respectively.

Yeah, because infants and toddlers really care about if their parents job is "basically a temp job." Also, undesirable doesn't have to mean BFE, it can mean in or near a mid-sized to large city in the South or Midwest. It just means "not the Northeast or West Coast."

I clearly said that $600k was a meme level salary that an attending on SDN said was needed to pay off $300k in debt on a 10 year loan. I carried over my rant from that discussion. When I say worst case in terms of $600k, I mean taxes. I made sure to also run through a realistic scenario of $320k for a hospitalist. Oh, I also never used a sub 20% tax rate lmao. Check your math. The tax rates of low 20s I used are accurate. Again, check your math.

Thank you for your attempt at a rebuttal though. You highlighted a bunch of common misconceptions and then also proved my point that medical students and physicians are so intrenched that they are getting screwed by debt that they will make up numbers and arguments out of thin air.

OK fine, I'll take you seriously.

First, 600k is way outside the reach of the majority of doctors especially at the start of a career which is when loans are the biggest problem.

Second, your tax figures are really off. When I was a resident making 54k, my take home pay was 1500 every other week. I have no idea where you're getting the take home of 5k/month. I ran the numbers in a bunch of states with no income tax and got roughly the same thing. Beyond that, you have other things that take money out with taxes like benefits. When I started my current job I was salaried at 200k. After taking out retirement, health insurance, HSA, and so on my monthly take home was right at 9k/month.

Third, your 10 year loan repayment doesn't usually start until you finish residency. So its 10 years from that point, not 7. A 300k loan at current rates costs around 3.5k/month to pay off. That's not a terrible figure, but its over 1/3rd of take home for a PCP in many places.

Fourth, 320/year as a FM hospitalist is a fair bit above average unless you go pretty rural.

Fifth, you have to factor in new costs - children being the prime one. Also people in their early/mid-30s don't want to rent anymore and that's hardly unreasonable.

Now that's not to say you can't do lots of things to make this easier.

Refinancing loans makes a huge difference. That 300k loan at 6.8%, if refinanced to 3%, will cut the payment by $700/month. We refinanced my wife's loan, cut the term by 1 year and the monthly cost by $500.

Going somewhere rural for a few years with plans to aggressively pay down loans and then move to where you really want to live. Problem is, your family has to be on board with this.

 

[VA Hopeful Dr]

I actually 100% agree with @Vivid_Quail , and I think you, like many other people in medicine are the ones missing the large point.

I am honestly sick of this tired excuse of “missing out on starting family, retirement/investments, savings, buying a home, etc etc etc...” These are excuses.

1. If you think you need to wait until you finish training to invest/contribute to your retirement, you obviously don’t invest.
The average diversified investment portfolio has historically performed at 8-9%/year return. You can literally use student loans in med school to invest and still make a profit.
In 2016, I was a med student and I gave my brother $500 (ALL student loan money at a rate of 6.8%) to invest in Tesla for me. I have enough from that to put a down payment on a house if I choose. And no, this was not “luck”. People who really care to be knowledgeable about investing and savings know that you do NOT have to “wait till you finish” to start your life or investments.
THIS is the problem with people in medicine, they want to make a **** ton of money at a young age, yet don’t know the first thing about money.
2. If you are graduating residency in 2021 and going into outpatient PCP or hospitalist to only take home 250k with a 300k or so loan burden, and you are NOT receiving any type of loan repayment from your job or through a FQHC, YOU are the one playing yourself.
3. Finally, I can not stress this enough - NEGOTIATE YOUR CONTRACT! 250k salary IS enough to pay off your loans. Negotiate loan repayment, negotiate daycare costs (my institution will not pay back loans but will cover full time day care at our institution)
4. Actually this is really the last point. Stop going into low paying specialties if you know you will have 400k in loans after training. I don’t care about your passion, you simply can not afford to be an outpatient pediatrician making $180k. And before the excuses start again about competitiveness- I matched anesthesia with a 202 step 1. I plan on staying at my home program after graduating, current contracts going for $500k base rate, yes major city.

"I invested in Tesla so no one should complain about money"

I think you overestimate the family doctor market and people's willingness to move to BFE.

 

[dienekes88]

I don't disagree with the concept. I disagree with some of the actual math though. In particular. You don't need to pay off your loan in 3 years after residency.

I would strongly recommend to anyone who is in debt that they do some serious work to build financial literacy.

I made a ton of mistakes, and I still don't have it right. I'm just a fellow who hasn't tasted that attending salary yet, so take my advice with multiple grains of salt. These are just the things I wish I heard earlier on as I've stumbled my way through postgraduate finances.

#1) try as hard as you can not to spend money. You don't need new clothes (unless you are interviewing), you don't need to go out to eat, you don't need to buy that coffee, you can sit in your apartment for vacation, you don't need a new phone, you don't need a new computer (and if you do, a $450 Lenovo will last you 8 years if you take care of it), and you can get everything at Costco. When you become a chief resident, live like an intern. When you become a fellow, live like an intern. When you are a junior attending... live like an intern.

#2) refinance your loans but be aware that refinancing and paying less in interest but on a shorter loan may INCREASE your payments at a time when you are cash strapped. Do the math and figure it out. You may even be better off refinancing to like a 30 year loan early on and then refinancing again to a 10 year loan when you're close to finishing residency. You have to also realize that some banks may require that you keep a certain proportion of your loan in cash at that bank. This is part of the cost of the loan, its effectively an investment of another form and decreases your liquidity, but its absolutely worth it.

#3) I think that the actual amount that you can put away during residency for retirement is negligible (personal opinion and probably going to be a little controversial). Even if you consider interest. If you put away 10% of 70,000 for 4-5 years, you come out 30,000 ahead compared to not putting away for retirement, but unless you are very smart with your investment strategy, the difference at 30 years (assuming 4% return) is only about 6% total at the end of it all (assuming a consistent 10-15% contribution to retirement annually for 30 years). What would you otherwise spend that money on? Loan repayment, my friend. Unless you are able to generate more than whatever interest you are paying on the loan... the cost of carrying the loan is greater than the revenue of investing your extra cash. If you're an idiot like me and didn't learn the ins and outs of loan refinance until several years into residency, then your loans may even be at like 7.8% or whatever the federal rate is. I think that loan repayment early on is as important as retirement savings.

4) you need some cash on hand in case of disasters or in case you need to make a big purchase that you would otherwise need to finance at some interest rate that would be very unfortunate. This might be a car, an engagement ring, moving costs when you move on to fellowship, etc.

5) the reality of balancing your dream career or having the career that will be better for your financial security is definitely something that you have to consider. I saw someone post above that moving to a less desirable place is an option. To me, this should be the default. Just get on one of the many real estate websites and figure out how much equity you can build by being able to buy a home with less to pay in monthly mortgage payments than renting in a more desirable location. At the end of the day you will always be paying someone's mortgage. It might as well be your own.

Dealing with debt is really hard, but if you're disciplined and educate yourself, it can be manageable.

 

[Vivid_Quail]

I haven't seen such garbage math since I graded papers for intro chemistry.

I would love to know where you think my math is wrong.

I mean, it’s doable for the vast majority of cases. Still sucks ass that we are charged obscene amounts.

just to change your perspective on the concept of medical school cost, in Germany the yearly cost for a student is 1000€ - that’s less than how much step 2 alone used to cost lmao. And on top of that they get 800€ per month from the government.

I’m all for realistic solutions to get out of **** situations. But I’d rather not end up in these situations to begin with. Higher education needed cost reform like 10 years ago. So you’re correct technically, no one needs a 600k salary to make it work. Physicians still end up earning a lot compared to society at large. But the principle of being charged 70k a year and then have it thrown at your face as a “privilege” is bonkers to me.

The Germans definitely do have it better than us in terms of tuition cost, but you have to take in the larger context.

The German government still spends around 250k euros to get someone through a 6 year MD degree, or about 50k USD/year, pretty similar to medical school costs here. Their high taxes fortunately make it very cheap for the students which I do wish we had here. Speaking of high taxes, a junior attending in Germany (Facharzt) will make about 75k euro (91k USD) per year. Post-tax for a single person without kids, a junior attending's take home pay is 3670 euro, or $4300. So, junior attendings in Germany bring home about as much as a PGY-2 or PGY-3 in most American residencies.

It is very important to note that for a junior attending in Germany making 91k USD/year and taking home $4,300 per month, they have a 97th percentile income compared to other single Germans. If they are married with one kid, they would have a take home pay at about the 70th percentile of German couples with kids, but this is without your spouse working, which is very rare in Germany.

German level tuition would be awesome, but with our salaries being so much higher than the Germans and our income tax so much lower, I think Canadian level tuition prices of $10-15k are a more realistic goal for tuition reform

 

[Banco]

I would love to know where you think my math is wrong.

The Germans definitely do have it better than us in terms of tuition cost, but you have to take in the larger context.

The German government still spends around 250k euros to get someone through a 6 year MD degree, or about 50k USD/year, pretty similar to medical school costs here. Their high taxes fortunately make it very cheap for the students which I do wish we had here. Speaking of high taxes, a junior attending in Germany (Facharzt) will make about 75k euro (91k USD) per year. Post-tax for a single person without kids, a junior attending's take home pay is 3670 euro, or $4300. So, junior attendings in Germany bring home about as much as a PGY-2 or PGY-3 in most American residencies.

It is very important to note that for a junior attending in Germany making 91k USD/year and taking home $4,300 per month, they have a 97th percentile income compared to other single Germans. If they are married with one kid, they would have a take home pay at about the 70th percentile of German couples with kids, but this is without your spouse working, which is very rare in Germany.

German level tuition would be awesome, but with our salaries being so much higher than the Germans and our income tax so much lower, I think Canadian level tuition prices of $10-15k are a more realistic goal for tuition reform

You bring up good points. Ultimately the income structure in Germany is not tied to the cost of attendance of school, rather the finances of their health system. That being said, while salaries will be lower than in the USA, with time there is lots of potential for increase. Not to mention the residents there have a much better work life balance, better vacation, paid 1+ year of maternity/paternity leave. But I digress, I’m rambling off topic.

I’m not naive enough to think that will ever be accomplished in the USA. Maybe yes we can get to Canadian levels one day. I am of your opinion overall, that the debt is definitely manageable with US salaries. But depending on the context it may not be as easy for certain specialties/situations - combine that with the work often being grueling and thankless, I can understand why do many attendings are jaded.

 

[deleted645092]

Are you trolling...? I mean if you are going to do a 5 point rebuttal, might as well read the original post.

What nuances did I miss?

I did not ignore that, I thought it was implied that you have plenty of money left over each month to save for retirement, buy a house, and start a family. Refer to my initial point that many physicians are bad with money if you think $8k/month is not enough to live very comfortably. If you really feel like you need to call JG Wentworth because you need cash now, you can pay off your loans in 6 years at a loan payment of $5,000/month and have $15,000/month of spending money for a mortgage and various other things until you pay them off.

Clearly you have never filed taxes. To have a 40% effective tax rate you would need to be living in California (high state income taxes), single, and making over $400k--single in CA effective tax rate for 200k is 34% and 300k is 38%, drops down to 27% and 30% if you are married. If you are married in California you need to make $825k to have a 40% effective tax rate lol. I clearly said it is a better idea to live in a state without state income tax...in Texas or Tennessee for example (both desperately need FM/IM PCPs and hospitalists), your effective tax rate on $320k if married is 23%...on $200k or $300k is it 21% and 22% respectively.

Yeah, because infants and toddlers really care about if their parents job is "basically a temp job." Also, undesirable doesn't have to mean BFE, it can mean in or near a mid-sized to large city in the South or Midwest. It just means "not the Northeast or West Coast."

I clearly said that $600k was a meme level salary that an attending on SDN said was needed to pay off $300k in debt on a 10 year loan. I carried over my rant from that discussion. When I say worst case in terms of $600k, I mean taxes. I made sure to also run through a realistic scenario of $320k for a hospitalist. Oh, I also never used a sub 20% tax rate lmao. Check your math. The tax rates of low 20s I used are accurate. Again, check your math.

Thank you for your attempt at a rebuttal though. You highlighted a bunch of common misconceptions and then also proved my point that medical students and physicians are so intrenched that they are getting screwed by debt that they will make up numbers and arguments out of thin air.

I’ve worked plenty of jobs and had to deal with my share of taxes in my life. When I say tax rate I’m referring to more than just federal income tax. You’re leaving out state income tax, SS, Medicare, and all the other little ****s. (I just looked at the tables for my state, which assuming an average salary of 250k has you paying 35% marginal tax rate, as a single filer in a red state. Sure I could be looking at an outdated table idk.). This isn’t saying taking home 60% of 250k isn’t still a lot, but it’s a lot less than you’re implying.

I’m also fully aware financial planning doesn’t start after residency. But when my loan refund is a total of 17k/ year I don’t exactly have a ton of money to be investing and squirreling away.

My point was that you’re using an absurd meme income, assuming we all live in Texas or Tennessee, and that starting to raise children, settle down, and buy our first homes aren’t factors that really drive down our effective take home pay.

Don’t take me arguing as complete disagreement. Physicians not being good with money isn’t completely untrue, but you’re assuming we’re all seeing ourselves as poor when we graduate. For me atleast my frustration comes from the fact that I’m living my 20s in near-poverty, while coming out and having to pay down more debt than my family has ever owned in assets, and having to continue to live at a slightly higher quality of life to pay down my debt in <5 years, while trying to start a family, buy a house, and then be able to finally hoard cash like a dragon living in its stolen mountain once I’m 40 years old, while my friends got to start on all of this before age 25.

 

[VA Hopeful Dr]

I would love to know where you think my math is wrong.

OK fine, I'll take you seriously.

First, 600k is way outside the reach of the majority of doctors especially at the start of a career which is when loans are the biggest problem.

Second, your tax figures are really off. When I was a resident making 54k, my take home pay was 1500 every other week. I have no idea where you're getting the take home of 5k/month. I ran the numbers in a bunch of states with no income tax and got roughly the same thing. Beyond that, you have other things that take money out with taxes like benefits. When I started my current job I was salaried at 200k. After taking out retirement, health insurance, HSA, and so on my monthly take home was right at 9k/month.

Third, your 10 year loan repayment doesn't usually start until you finish residency. So its 10 years from that point, not 7. A 300k loan at current rates costs around 3.5k/month to pay off. That's not a terrible figure, but its over 1/3rd of take home for a PCP in many places.

Fourth, 320/year as a FM hospitalist is a fair bit above average unless you go pretty rural.

Fifth, you have to factor in new costs - children being the prime one. Also people in their early/mid-30s don't want to rent anymore and that's hardly unreasonable.

Now that's not to say you can't do lots of things to make this easier.

Refinancing loans makes a huge difference. That 300k loan at 6.8%, if refinanced to 3%, will cut the payment by $700/month. We refinanced my wife's loan, cut the term by 1 year and the monthly cost by $500.

Going somewhere rural for a few years with plans to aggressively pay down loans and then move to where you really want to live. Problem is, your family has to be on board with this.

 

[deleted645092]

Are you trolling...? I mean if you are going to do a 5 point rebuttal, might as well read the original post.

What nuances did I miss?

I did not ignore that, I thought it was implied that you have plenty of money left over each month to save for retirement, buy a house, and start a family. Refer to my initial point that many physicians are bad with money if you think $8k/month is not enough to live very comfortably. If you really feel like you need to call JG Wentworth because you need cash now, you can pay off your loans in 6 years at a loan payment of $5,000/month and have $15,000/month of spending money for a mortgage and various other things until you pay them off.

Clearly you have never filed taxes. To have a 40% effective tax rate you would need to be living in California (high state income taxes), single, and making over $400k--single in CA effective tax rate for 200k is 34% and 300k is 38%, drops down to 27% and 30% if you are married. If you are married in California you need to make $825k to have a 40% effective tax rate lol. I clearly said it is a better idea to live in a state without state income tax...in Texas or Tennessee for example (both desperately need FM/IM PCPs and hospitalists), your effective tax rate on $320k if married is 23%...on $200k or $300k is it 21% and 22% respectively.

Yeah, because infants and toddlers really care about if their parents job is "basically a temp job." Also, undesirable doesn't have to mean BFE, it can mean in or near a mid-sized to large city in the South or Midwest. It just means "not the Northeast or West Coast."

I clearly said that $600k was a meme level salary that an attending on SDN said was needed to pay off $300k in debt on a 10 year loan. I carried over my rant from that discussion. When I say worst case in terms of $600k, I mean taxes. I made sure to also run through a realistic scenario of $320k for a hospitalist. Oh, I also never used a sub 20% tax rate lmao. Check your math. The tax rates of low 20s I used are accurate. Again, check your math.

Thank you for your attempt at a rebuttal though. You highlighted a bunch of common misconceptions and then also proved my point that medical students and physicians are so intrenched that they are getting screwed by debt that they will make up numbers and arguments out of thin air.

Not California

 

[UnlimitedTraction]

I actually 100% agree with @Vivid_Quail , and I think you, like many other people in medicine are the ones missing the large point.

I am honestly sick of this tired excuse of “missing out on starting family, retirement/investments, savings, buying a home, etc etc etc...” These are excuses.

1. If you think you need to wait until you finish training to invest/contribute to your retirement, you obviously don’t invest.
The average diversified investment portfolio has historically performed at 8-9%/year return. You can literally use student loans in med school to invest and still make a profit.
In 2016, I was a med student and I gave my brother $500 (ALL student loan money at a rate of 6.8%) to invest in Tesla for me. I have enough from that to put a down payment on a house if I choose. And no, this was not “luck”. People who really care to be knowledgeable about investing and savings know that you do NOT have to “wait till you finish” to start your life or investments.
THIS is the problem with people in medicine, they want to make a **** ton of money at a young age, yet don’t know the first thing about money.
2. If you are graduating residency in 2021 and going into outpatient PCP or hospitalist to only take home 250k with a 300k or so loan burden, and you are NOT receiving any type of loan repayment from your job or through a FQHC, YOU are the one playing yourself.
3. Finally, I can not stress this enough - NEGOTIATE YOUR CONTRACT! 250k salary IS enough to pay off your loans. Negotiate loan repayment, negotiate daycare costs (my institution will not pay back loans but will cover full time day care at our institution)
4. Actually this is really the last point. Stop going into low paying specialties if you know you will have 400k in loans after training. I don’t care about your passion, you simply can not afford to be an outpatient pediatrician making $180k. And before the excuses start again about competitiveness- I matched anesthesia with a 202 step 1. I plan on staying at my home program after graduating, current contracts going for $500k base rate, yes major city.

lol you had my attention until you said the Tesla thing. If it's not luck, can you point me in the direction of the next TSLA/stock that will 20x in 4 years? Thanks in advance and good luck with your $10k down payment

 

[Vivid_Quail]

OK fine, I'll take you seriously.

First, 600k is way outside the reach of the majority of doctors especially at the start of a career which is when loans are the biggest problem.

Second, your tax figures are really off. When I was a resident making 54k, my take home pay was 1500 every other week. I have no idea where you're getting the take home of 5k/month. I ran the numbers in a bunch of states with no income tax and got roughly the same thing. Beyond that, you have other things that take money out with taxes like benefits. When I started my current job I was salaried at 200k. After taking out retirement, health insurance, HSA, and so on my monthly take home was right at 9k/month.

Third, your 10 year loan repayment doesn't usually start until you finish residency. So its 10 years from that point, not 7. A 300k loan at current rates costs around 3.5k/month to pay off. That's not a terrible figure, but its over 1/3rd of take home for a PCP in many places.

Fourth, 320/year as a FM hospitalist is a fair bit above average unless you go pretty rural.

Fifth, you have to factor in new costs - children being the prime one. Also people in their early/mid-30s don't want to rent anymore and that's hardly unreasonable.

Now that's not to say you can't do lots of things to make this easier.

Refinancing loans makes a huge difference. That 300k loan at 6.8%, if refinanced to 3%, will cut the payment by $700/month. We refinanced my wife's loan, cut the term by 1 year and the monthly cost by $500.

Going somewhere rural for a few years with plans to aggressively pay down loans and then move to where you really want to live. Problem is, your family has to be on board with this.

1. Already addressed why I used $600k...it was a meme amount that an attending anesthesiologist claimed was the minimum needed to pay off $300k of debt.

2. A take home pay of $3k/month seems reasonable if you are putting stuff into retirement and aren't married (big tax break if you are married). I never said $5k, I said $4k in my state, so $3k-4k is a reasonable range, you were just on the lower end.

3. The 10 year loan in 3 years was more of a sarcastic rebuttal to someone saying you need $600k to pay off $300k in 10 years. You don't need 10 years to pay it off with that high of a salary, you don't even need 3 years with that salary, you need like 10 months. But 3 years was better for proving my point. I admit that was kind of confusing.

4. 325k/year is the MGMA median compensation for FM hospitalist and does not include health insurance/HSA in that comp. Using MGMA because I trust the n = 359 from 67 different practices more than your anecdotal experience. Retirement would need to be taken out of your take home pay of $8000 while paying off loans, that is true. $8000 is an artificial limit anyways for faster loan repayment. I would max out a basic 401k ($1600/month), especially if you have employer matching, otherwise just focus on paying off debt because of the psychological benefits. You can easily catch back up with retirement savings once you are out of debt. At a refinanced 3%, you theoretically could stretch your repayments out over 10-15 years and put the rest in the market. Mathematically this will probably make your net worth higher by retirement, but I would personally rather get out of debt ASAP for the freedom that allows.

5. Renting is better when paying off debt quickly because you don't have to save up for a down payment. Buying a house when you are $300k in debt is exactly the kind of poor financial decision making I am talking about lol. Plenty of people raise kids on a lot less than $8k take home (and that is if your spouse brings in 0 income).

@tryaway has the great point that my math does not even include loan forgiveness from an employer. FM loan forgiveness of $100-200k is not unheard of in perfectly livable midwestern and southern cities.

 

[Vivid_Quail]

View attachment 330995

Not California

I just looked at the tables for my state, which assuming an average salary of 250k has you paying 35% marginal tax rate, as a single filer in a red state. Sure I could be looking at an outdated table idk

Giant oof. Imagine trying to disagree with someone about financial literacy when you don't understand how marginal tax rates work. I use effective tax rate in all of my calculations. You mention a federal tax rate of 35% if you earn $250k in your red state...lol. Your effective federal tax rate is 23.18%. Only $43,000 of your $250k income is taxed at 35%, which is an insane thing to explain to someone who thinks they are correcting people on finances.

When I say tax rate I’m referring to more than just federal income tax. You’re leaving out state income tax, SS, Medicare, and all the other little ****s.

I included state income tax and FICA (which is the social security and medicare tax) in all of my calculations. Here is an example of an easy to use calculator that can do this . The reason why my numbers seem so off to you if that you don't know what your talking about in the slightest. Which is fine, I made this post so others can learn the real math.

Federal Income Tax Calculator (2023-2024)

Calculate your federal, state and local taxes for the current filing year with our free income tax calculator. Enter your income and location to estimate your tax burden.

smartasset.com

 

[deleted645092]

Giant oof. Imagine trying to disagree with someone about financial literacy when you don't understand how marginal tax rates work. I use effective tax rate in all of my calculations. You mention a federal tax rate of 35% if you earn $250k in your red state...lol. Your effective federal tax rate is 23.18%. Only $43,000 of your $250k income is taxed at 35%, which is an insane thing to explain to someone who thinks they are correcting people on finances.

Also I included state income tax and FICA (which is the social security and medicare tax) in all of my calculations. Here is an example of an easy to use calculator that can do this

Federal Income Tax Calculator (2023-2024)

Calculate your federal, state and local taxes for the current filing year with our free income tax calculator. Enter your income and location to estimate your tax burden.

smartasset.com

Okay so it went down to 31.25% after maxing out 401k and IRA contributions at a $300,000 salary.

Again, not arguing the principles, only your assumptions.

 

[Vivid_Quail]

Okay so it went down to 31.25% after maxing out 401k and IRA contributions at a $300,000 salary.

Again, not arguing the principles, only your assumptions.

You are still comparing apples to oranges. You first claimed the federal tax rate would be 40%, then you said federal taxes is 35% on 300k. Now you are saying it is 31.25% with maxed out 401k and IRA. Your effective federal tax rate in that scenario 22.06% in Missouri. Your effective total tax rate is 31.60% in Missouri, but that includes federal, state, and FICA.

 

[deleted645092]

You are still comparing apples to oranges. You first claimed the federal tax rate would be 40%, then you said federal taxes is 35% on 300k. Now you are saying it is 31.25% with maxed out 401k and IRA. Your effective federal tax rate in that scenario 22.06% in Missouri. Your effective total tax rate is 31.60% in Missouri, but that includes federal, state, and FICA.

I ain’t in Missouri but also I don’t think I said federal I’m pretty sure I said effective but I also ain’t a financial advisor. I just know that physician taxes aren’t gonna come out to 28% without special circumstances.

You’re arguing with a guy who bought GameStop at $300 and makes his stock picks based on WSB DD.

 

[VA Hopeful Dr]

1. Already addressed why I used $600k...it was a meme amount that an attending anesthesiologist claimed was the minimum needed to pay off $300k of debt.

2. A take home pay of $3k/month seems reasonable if you are putting stuff into retirement and aren't married (big tax break if you are married). I never said $5k, I said $4k in my state, so $3k-4k is a reasonable range, you were just on the lower end.

3. The 10 year loan in 3 years was more of a sarcastic rebuttal to someone saying you need $600k to pay off $300k in 10 years. You don't need 10 years to pay it off with that high of a salary, you don't even need 3 years with that salary, you need like 10 months. But 3 years was better for proving my point. I admit that was kind of confusing.

4. 325k/year is the MGMA median compensation for FM hospitalist and does not include health insurance/HSA in that comp. Using MGMA because I trust the n = 359 from 67 different practices more than your anecdotal experience. Retirement would need to be taken out of your take home pay of $8000 while paying off loans, that is true. $8000 is an artificial limit anyways for faster loan repayment. I would max out a basic 401k ($1600/month), especially if you have employer matching, otherwise just focus on paying off debt because of the psychological benefits. You can easily catch back up with retirement savings once you are out of debt. At a refinanced 3%, you theoretically could stretch your repayments out over 10-15 years and put the rest in the market. Mathematically this will probably make your net worth higher by retirement, but I would personally rather get out of debt ASAP for the freedom that allows.

5. Renting is better when paying off debt quickly because you don't have to save up for a down payment. Buying a house when you are $300k in debt is exactly the kind of poor financial decision making I am talking about lol. Plenty of people raise kids on a lot less than $8k take home (and that is if your spouse brings in 0 income).

@tryaway has the great point that my math does not even include loan forgiveness from an employer. FM loan forgiveness of $100-200k is not unheard of in perfectly livable midwestern and southern cities.

Sorry, my mistake on the 4 v 5k. I will say that my 1500/pay check was without putting anything into retirement (which was so very stupid on my part). Adding that in, its going to be less than 3k/month.

I completely agree that its stupid saying you need 600k to pay off 300k. I had several residency classmates graduate with that or more 8 years and and they did just fine.

Does your MGMA break down by years experience? Every hospitalist group I'm familiar with in my states (which is all except MUSC) pay more based on experience. So unless that's the ones with 5 years or less in the job, it doesn't accurately say what you get paid your first several years. For example, when my wife started her hospitalist job, the salary based on the standard number of days worked was I think 215k. After working for 3 years, that went up to 250k. MGMA usually (but not always) will experience stratify to take that into account.

Renting is usually (not always) financially smarter. So is (as another poster mentioned) never eating out, vacationing, buying coffee, shopping anywhere besides costco, you get the idea.


Here's the thing: you can have a lower-end physician job while saving for retirement, paying off loans, and have a decent lifestyle. My wife is also a physician and when I started my practice I didn't earn any money for about 6 months. So she was the sole breadwinner at the number I mentioned earlier. We had a nice house, a nanny for the kids, contributed to her 401k, took 1-2 trips/year, got take out 1-2x/month, and shopped at the nice grocery store. Granted her loans were only about 200k, but salaries are higher now than they were then.

 

[Vivid_Quail]

I ain’t in Missouri but also I don’t think I said federal I’m pretty sure I said effective but I also ain’t a financial advisor. I just know that physician taxes aren’t gonna come out to 28% without special circumstances.

I used Missouri because that is within 0.45% of the rate you got when you put in your state lol. I don't know what exact state you used but it shouldn't matter too much as long as it isn't West Coast or Northeast.

I just looked at the tables for my state, which assuming an average salary of 250k has you paying 35% marginal tax rate

35% is the federal marginal tax rate at $250k for a single person and then you posted a picture of the federal tax brackets, so I think it was fair to assume you were talking about federal tax rate. The effective total tax rate for $250k for a single person in [insert red state here] who is maxing out 401k and IRA is 29.31%. A lot of physicians are married, in which case their effective total tax rate for that salary and location would be 23.66%. The only way a married physician in a red state is getting taxed at >28% is if they make >$425k/yr, at which point, I think you have plenty of money to survive I don't think a married physician in a red state making <$425k is a "special circumstance", and that is all you need to pay less than 28% in total taxes. That is probably the most average physician imaginable.

Just to put into scale how wrong your numbers have been, to have a total effective tax rate of >40% as a married physician in [insert rate state], you would need to earn more than $1.2-1.55 MILLION per year in 1040 income.

In my experience, medical students that honestly think wealthy Americans (a physician salary is wealthy to me) are taxed at >40% in red states are people that watch way too Fox News and listen to their boomer attendings complain how they are taxed at 50% and can barely afford their second vacation home. Not saying you that fits your case, but keep in mind that the common narrative you hear in physician workrooms is not based in reality.

 

[jamaica jan sun princess]

Free Paycheck Calculator: Hourly & Salary Take Home After Taxes

SmartAsset's hourly and salary paycheck calculator shows your income after federal, state and local taxes. Enter your info to see your take home pay.

smartasset.com

 

[Vivid_Quail]

Sorry, my mistake on the 4 v 5k. I will say that my 1500/pay check was without putting anything into retirement (which was so very stupid on my part). Adding that in, its going to be less than 3k/month.

I completely agree that its stupid saying you need 600k to pay off 300k. I had several residency classmates graduate with that or more 8 years and and they did just fine.

Does your MGMA break down by years experience? Every hospitalist group I'm familiar with in my states (which is all except MUSC) pay more based on experience. So unless that's the ones with 5 years or less in the job, it doesn't accurately say what you get paid your first several years. For example, when my wife started her hospitalist job, the salary based on the standard number of days worked was I think 215k. After working for 3 years, that went up to 250k. MGMA usually (but not always) will experience stratify to take that into account.

Renting is usually (not always) financially smarter. So is (as another poster mentioned) never eating out, vacationing, buying coffee, shopping anywhere besides costco, you get the idea.


Here's the thing: you can have a lower-end physician job while saving for retirement, paying off loans, and have a decent lifestyle. My wife is also a physician and when I started my practice I didn't earn any money for about 6 months. So she was the sole breadwinner at the number I mentioned earlier. We had a nice house, a nanny for the kids, contributed to her 401k, took 1-2 trips/year, got take out 1-2x/month, and shopped at the nice grocery store. Granted her loans were only about 200k, but salaries are higher now than they were then.

Thanks for your chill reply. I am sorry that my initial reply to you was more aggressive than it should have been. I always enjoy reading your contributions on the FM forum especially

The MGMA data I have access too has percentiles but not experience :/ and you know my broke med student *** can't afford the more recent MGMA data lol. I think $320k is still possible if you are okay with true BFE as a new grad, but your numbers of mid 200s are probably more realistic for a brand new grad in a more livable mid-sized Midwestern or Southern city. You know the new grad market much better than I do. I will say, I have talked to people who got loan forgiveness of like $200k for a 3 year contract so that is basically $60k extra per year in compensation on top of mid 200s. Again, generous loan repayment is most likely going to be in true BFE, not just in a middle-American city that a Valley girl/guy finds disgusting but I would love

 

[VA Hopeful Dr]

Thanks for your chill reply. I am sorry that my initial reply to you was more aggressive than it should have been. I always enjoy reading your contributions on the FM forum especially

The MGMA data I have access too has percentiles but not experience :/ and you know my broke med student *** can't afford the more recent MGMA data lol. I think $320k is still possible if you are okay with true BFE as a new grad, but your numbers of mid 200s are probably more realistic for a brand new grad in a more livable mid-sized Midwestern or Southern city. You know the new grad market much better than I do. I will say, I have talked to people who got loan forgiveness of like $200k for a 3 year contract so that is basically $60k extra per year in compensation on top of mid 200s. Again, generous loan repayment is most likely going to be in true BFE, not just in a middle-American city that a Valley girl/guy finds disgusting but I would love

Yeah BFE loan repayment makes things much easier, but that's not viable for everyone.

The trick really is about increasing income in the job you get. 99% of jobs are salaried the first year, and usually at much lower than you can make if you get busy and are willing to work hard. That extra money after the first year is great for finishing off loans.

 

[Redpancreas]

I would disagree that its SDN consensus to pay off a $300K loan by earning a $600K salary (which is not even close to a typical entry level attending salary in any field). With posters like WhiteCoatInvestor, etc. on these forums I think the mentality trends towards refinancing loans, smart saving, taking advantage of any opportunities to pay off loans, etc.

Anyone who is saying they need to make $600K to pay off a $300K loan IMO is saying that to justify to others (or themselves) that they should go into a competitive field when in reality they want to do it for other reasons.

 

[Vivid_Quail]

Anyone who is saying they need to make $600K to pay off a $300K loan IMO is saying that to justify to others (or themselves) that they should go into a competitive field when in reality they want to do it for other reasons.

Couldn't agree more, I did not mean to imply that the extreme example of $600k salary to pay off $300k is the universally accepted view on SDN. But, in my opinion, the consensus mentality on SDN and for people I have talked to in real life is closer to that extreme example than it is to the alternative I proposed.

 

[DoctwoB]

The disagreement on this thread I think is more about tone then fact. Yes the average doctor can pay off higher then average Med school debt. No that doesn’t justify it being so high or make it easy to do so. It also does affect your life decisions, because if you went into medicine to be an academic pediatrician you will be in a tough financial situation. The initial financial numbers (600 and 320) are also optimistic, but not impossible, numbers for doctors coming out of residency.

People have different life priorities then maxing income. Children, family, personality etc make it so moving to BFE for a few years is hard to undoable (while also adding expenses). This is also the time when docs, who started their career much later then most, also need to get on good financial footing and catch up on retirement savings, save for a down payment, etc. Once again, it is clearly doable but blowing it off as NoBigDeal is what is upsetting some folks.

 

[Lem0nz]

I look at these threads and I just shake my head and wonder how my discipline ****'ed up so much. Unless you're CV, >400k in surgical subdisciplines seems to be the exception not the rule. All of my classmates are between 275k and 375k either out of fellowship or going straight into general surgery. How did we mess this up so badly that we're coming in at 6am and leaving at 6pm when we look at our anesthesia friends breaking 500k easy breezy out of residency. Man, we messed up so badly.

 

[Vivid_Quail]

I look at these threads and I just shake my head and wonder how my discipline ****'ed up so much. Unless you're CV, >400k in surgical subdisciplines seems to be the exception not the rule. All of my classmates are between 275k and 375k either out of fellowship or going straight into general surgery. How did we mess this up so badly that we're coming in at 6am and leaving at 6pm when we look at our anesthesia friends breaking 500k easy breezy out of residency. Man, we messed up so badly.

Are your friends practicing in NYC or SF at an academic place?

I don't know of a single surgical specialty with a median salary of <400k other than gen surg breast and gen surg endocrine, which both have lifestyles better than your average anesthesiologist. CT surg is like $725k...ortho is $600-700k, neurosurgery is $750-800k . ENT, plastics, uro, and all gen surg sub-specialties not mentioned are >400k median.

If you count 4 year residencies like OBGYN and ophtho as surgical, they make just under 400k median.

It is fair to say that if you want to live in a desirable city you probably aren't going earn a median salary your first few years as an attending. But $275k for general surgery is like 20th percentile so you would need to combine no experience and being stubborn about location to get in that situation.

 

[Vivid_Quail]

The disagreement on this thread I think is more about tone then fact. Yes the average doctor can pay off higher then average Med school debt. No that doesn’t justify it being so high or make it easy to do so. It also does affect your life decisions, because if you went into medicine to be an academic pediatrician you will be in a tough financial situation. The initial financial numbers (600 and 320) are also optimistic, but not impossible, numbers for doctors coming out of residency.

People have different life priorities then maxing income. Children, family, personality etc make it so moving to BFE for a few years is hard to undoable (while also adding expenses). This is also the time when docs, who started their career much later then most, also need to get on good financial footing and catch up on retirement savings, save for a down payment, etc. Once again, it is clearly doable but blowing it off as NoBigDeal is what is upsetting some folks.

I agree with all of that. It is indeed about priorities. I still think too many medical students and physicians have the misconception that even with financial security as a top priority, it is borderline impossible to manage debt and live an awesome life at the same time.

For fringe cases like an academic pediatrician with a top quintile debt burden, it will be a less luxurious of a life than most other doctors. But huge debt burden + lowest paying specialty possible are both choices that no one is forced into.

 

[Lem0nz]

Are your friends practicing in NYC or SF at an academic place?

I don't know of a single surgical specialty with a median salary of <400k other than gen surg breast and gen surg endocrine, which both have lifestyles better than your average anesthesiologist. CT surg is like $725k...ortho is $600-700k, neurosurgery is $750-800k . ENT, plastics, uro, and all gen surg sub-specialties not mentioned are >400k median.

If you count 4 year residencies like OBGYN and ophtho as surgical, they make just under 400k median.

It is fair to say that if you want to live in a desirable city you probably aren't going earn a median salary your first few years as an attending. But $275k for general surgery is like 20th percentile so you would need to combine no experience and being stubborn about location to get in that situation.

Those are not the numbers for your first physician job in general surgery or it’s sub disciplines. First years of practice are between 275 and 375. And two years+ practice is 440. It’s an improvement but it’s certainly not the 500 you’re talking about, and I don’t believe you that our lifestyle is all that much better for general surgeons.

Those are the total comp numbers. If you mix them with the non MGMA datasets they all go down.

 

[tryaway]

"I invested in Tesla so no one should complain about money"

I think you overestimate the family doctor market and people's willingness to move to BFE.

Overestimation or not, it doesn’t matter. I don’t know the exact FM market, because I did not enter the field.
It is up to those who choose these fields to educate themselves.

My parents left their home country in their early 20s to come to place they had no job, family, or education - all of this just so they can give their unborn children a better opportunity.
If someone can not move to a rural area with in a state with no income tax for only 3-4 years to pay of your loans - then that’s on them.

 

[tryaway]

lol you had my attention until you said the Tesla thing. If it's not luck, can you point me in the direction of the next TSLA/stock that will 20x in 4 years? Thanks in advance and good luck with your $10k down payment

I knew once I mentioned Tesla, many of your would miss the point entirely.
Even if I pointed to a stock that would do only 2-3x in the next 4 years, most med students, residents, and attendings would just complain and make excuses about how “they can’t invest because of their lack of income as a med student or crazy med school debt or blah blah...”
The point I’m making is that people in medicine need to stop making the excuse of “being behind”
And yes, my $11,323.98 from Tesla is enough to put a down payment on a house because physician loans are 0% down and I only need 5% because I’m building. (Building a very modest house, at that. But let me guess, half of y’all also think just, because you trained for so long you also need a 500k-1M “doctor house”)

Once again proving my point that studying medicine does not stop you from investing, saving, or buying a house. It forces you to be smart, methodical, and disciplined in your decisions.

 

[VA Hopeful Dr]

Overestimation or not, it doesn’t matter. I don’t know the exact FM market, because I did not enter the field.
It is up to those who choose these fields to educate themselves.

My parents left their home country in their early 20s to come to place they had no job, family, or education - all of this just so they can give their unborn children a better opportunity.
If someone can not move to a rural area with in a state with no income tax for only 3-4 years to pay of your loans - then that’s on them.

"Other people made do with way less so doctors shouldn't ever complain"

You're on a roll today.

 

[Vivid_Quail]

Those are not the numbers for your first physician job in general surgery or it’s sub disciplines. First years of practice are between 275 and 375. And two years+ practice is 440. It’s an improvement but it’s certainly not the 500 you’re talking about, and I don’t believe you that our lifestyle is all that much better for general surgeons.

Those are the total comp numbers. If you mix them with the non MGMA datasets they all go down.

Well MGMA is not total comp in the way you might be thinking because it doesn’t include stuff like health insurance. It’s just “total comp” of salary, bonuses, 401k matching, stipends for travel, etc. Basically stuff that ends up as cash money in your checking account or retirement accounts. Other benefits like health insurance and malpractice aren’t included in MGMA figures. Not including bonuses, 401k matching and stipends is one way that surveys like medscape grossly underestimate physician compensation.

As far as it 275-375k for the first 1-2 years of practice, I don’t have data to disagree with that. But it being 440+ for >2 years of experience proves my point that surgeons still make plenty. I thought it was common knowledge tbh that anesthesia is often the better paid side of the drapes.

I never mentioned $500k by the way. That was someone else. All my comments were in relation to over/under 400k.

 

[Jack Donaghy]

Recent alumni from my school have signed contracts to be FM hospitalists starting at >300k. This is in one of the biggest cities in the southeastern US. Population nearing 1M.

Always baffles me when I see people arguing about how FM don't make that much

 

[Chibucks15]

Recent alumni from my school have signed contracts to be FM hospitalists starting at >300k. This is in one of the biggest cities in the southeastern US. Population nearing 1M.

Always baffles me when I see people arguing about how FM don't make that much

On SDN the only people making enough are derm and optho and neurosurg

 

[whataschool_classof24]

I would agree with your title if you are smart with your money, but odds are us med peps aren't going to be warren buffets with money (at least not me). It sounds good to say "oh well once I get this 300k a year job I can start to pay off my 250k debt", then you get your first paycheck..... That new car starts to look nice, that thing your SO always wanted is looking nice, the list could go on etc. I am a pretty realistic person and I keep telling myself "I'll be smart with my money as an attending and pay off my loans as soon as I can", when in the back of my mind I know I'll blow a little bit and justify it as "oh well I earned it".

 

[Chibucks15]

I would agree with your title if you are smart with your money, but odds are us med peps aren't going to be warren buffets with money (at least not me). It sounds good to say "oh well once I get this 300k a year job I can start to pay off my 250k debt", then you get your first paycheck..... That new car starts to look nice, that thing your SO always wanted is looking nice, the list could go on etc. I am a pretty realistic person and I keep telling myself "I'll be smart with my money as an attending and pay off my loans as soon as I can", when in the back of my mind I know I'll blow a little bit and justify it as "oh well I earned it".

I’m gonna pay down the principal a good chunk and roll the lower amount into just every other bill. Life ain’t worth it to Dave Ramsey this ****

 

[Lem0nz]

Well MGMA is not total comp in the way you might be thinking because it doesn’t include stuff like health insurance. It’s just “total comp” of salary, bonuses, 401k matching, stipends for travel, etc. Basically stuff that ends up as cash money in your checking account or retirement accounts. Other benefits like health insurance and malpractice aren’t included in MGMA figures. Not including bonuses, 401k matching and stipends is one way that surveys like medscape grossly underestimate physician compensation.

As far as it 275-375k for the first 1-2 years of practice, I don’t have data to disagree with that. But it being 440+ for >2 years of experience proves my point that surgeons still make plenty. I thought it was common knowledge tbh that anesthesia is often the better paid side of the drapes.

I never mentioned $500k by the way. That was someone else. All my comments were in relation to over/under 400k.

Sure, of course.

My earlier post was also partly in jest. The follow up was more to point out that even the "high paying" specialties are not pulling as much as is generally thought. I personally thought we as surgeons made more once we started practice and was a little surprised. Since your post was about paying off loans in three years it seemed relevant.

 

[Vivid_Quail]

Sure, of course.

My earlier post was also partly in jest. The follow up was more to point out that even the "high paying" specialties are not pulling as much as is generally thought. I personally thought we as surgeons made more once we started practice and was a little surprised. Since your post was about paying off loans in three years it seemed relevant.

Don't get me wrong, every time I am reminded that anesthesiologists make more than half of the surgical specialties, my brain still wants to deny it is true. Those pajama wearing, crossword puzzle solving, really chill, nice teachers...wait now I am complimenting them. Maybe that is how they get away with their high pay...

 

[Redpancreas]

How much do IM hospitalists get as a fresh grad with 0 years of experience? I was under the impression that 250-300k is common but I guess it’s not

@tantacles

Not at this stage so I've tagged a friend who may refute me but from anecdotal experience of having my peers apply for hospitalist positions. Starting salary for a hospitalist of $300K seems to be wishful thinking unless it includes at least one desirable not limited to the below:

-Outside a desirable area
-Unsustainable work and/or locums (high burn out rate)
-Nocturnal

$200K-250K is more reasonable and even then there are tons of things to negotiate like malpractice, responsibilities, etc. If you find a $250K starting salary as a hospitalist 7-on/off gig with benefits, malpractice, etc. that you are satisfied with, I would take it and run.

EDIT: Could be wrong.

 

[Jack Donaghy]

@tantacles

Not at this stage so I've tagged a friend who may refute me but from anecdotal experience of having my peers apply for hospitalist positions. Starting salary for a hospitalist of $300K seems to be wishful thinking unless it includes at least one desirable not limited to the below:

-Outside a desirable area
-Unsustainable work and/or locums (high burn out rate)
-Nocturnal

$200K-250K is more reasonable and even then there are tons of things to negotiate like malpractice, responsibilities, etc. If you find a $250K starting salary as a hospitalist 7-on/off gig with benefits, malpractice, etc. that you are satisfied with, I would take it and run.

This is categorically false in the major metropolitan city that I live in. Hospitalists signing on for less than 300k do so for one of two reasons:

1) they are uninformed
2) they are not good at negotiating contracts

 

[Redpancreas]

This is categorically false in the major metropolitan city that I live in. Hospitalists signing on for less than 300k do so for one of two reasons:

1) they are uninformed
2) they are not good at negotiating contracts

Thank you for correcting me. My friends graduating are negotiating contracts to go to major metropolitan places (in the Midwest) have some advice/assistance from our residency program. The pay range seemed to be around 200-250K and there were perks like loan repayment options, etc. These tended to be non-academic posts but I guess a few were academic. Could you elaborate a bit more on this 300+ minimum starting salary for us (or me)?

For this range of salary, what are responsibilities, benefits, malpractice, and what are the contract logistics (benefits, extensions, etc.)

 

[Vivid_Quail]

I’m gonna pay down the principal a good chunk and roll the lower amount into just every other bill. Life ain’t worth it to Dave Ramsey this ****

Ha, Dave Ramsey. Not listening to him is something we can all agree on. That clown tells family medicine doctors in NYC and LA to pick up emergency room shifts on the weekend to pay off $400k of debt. He literally thinks the answer to get out of debt is to continue working 80hrs/week like a resident in a job you can't even get hired for (FM in urban emergency department), instead of moving an hour or two out of the city and working less for more money. He is pathologically committed to his "rice and beans, no debt ever, grind until you drop dead from work" shtick. Granted, selling this crap to people did earn him a 9 figure net worth...

And don't even get me started on how he says you can get consistent, "conservative" 12% returns if you just put your money into one of the mutual funds that he is paid to promote.

 

[Vivid_Quail]

@tantacles

Not at this stage so I've tagged a friend who may refute me but from anecdotal experience of having my peers apply for hospitalist positions. Starting salary for a hospitalist of $300K seems to be wishful thinking unless it includes at least one desirable not limited to the below:

-Outside a desirable area
-Unsustainable work and/or locums (high burn out rate)
-Nocturnal

$200K-250K is more reasonable and even then there are tons of things to negotiate like malpractice, responsibilities, etc. If you find a $250K starting salary as a hospitalist 7-on/off gig with benefits, malpractice, etc. that you are satisfied with, I would take it and run.

10th percentile for MGMA hospitalist is $225k (n = 5,100 doctors)--that figure is not including benefits or malpractice which is standard for any employed job. You need to combine quite a few choices to get a 10th percentile salary, even for a new grad.

Also, "undesirable" area does not automatically mean a town of 5,000 in Alaska. In terms of getting a better salary, it means a city of a few 100,000 up to 1 million in states like Indiana, Tennessee, Alabama, Arizona, Wisconsin, Ohio, etc. Perfectly livable places with good schools and plenty to do. If you can't be happy in a place like that for a few years, that is 100% on you, not on the location. If the only place someone can be happy is a top 10 US city...just wow.

In fact, the truly rural places like critical access hospitals that people commonly imagine when they say "outside a desirable area" often pay about the same as "desirable" cities or less, because they are low volume. True BFE places are often where ED and hospitalist shifts are 24 hours (or even 48 hours!) because you have so much free time to sleep. You are not going to generate many RVU's so you don't make as much per hour (hence the government subsidizing CAHs, but still you get the point).