Psychiatrists and Net Worth

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pike73

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I was recently reading a Medscape physician compensation survey and was surprised to see the data for psychiatrists and net worth. The report stated that only 14% of psychiatrist respondents had net worths over 2 Million and 44% had net worths under $500,000. I know that psychiatrists have had historically lower compensation that other specialties but these number seem low. I also know that this is one survey and possible the numbers are skewed based on the participants but another report from 2017 showed similar results. I was wondering what others thought. I know that psychiatrists have the ability to continue to work later in life so that some might not be as concerned with saving. Also, in general, physicians do not have net worths what most would expect.

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Net worth generally is assets minus liabilities.

If you buy a second home in a decent area and rent it out at slightly higher than the cost of the mortgage to a single family OR make it extremely AirBnB-able and rent rooms individually, the rent becomes cash flow and the value of the home goes under assets while the debts you owe would ideally keep you in the black. Over a couple of decades of tenants paying your debts and not destroying the home, there are few scenarios where you have a net worth of less than 5 million, especially if the home is in a busy state like CA or NY. Not everyone can handle real estate though, but it's one of the easiest ways to decouple your earnings from directly requiring set hours of time from you.
 
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I was recently reading a Medscape physician compensation survey and was surprised to see the data for psychiatrists and net worth. The report stated that only 14% of psychiatrist respondents had net worths over 2 Million and 44% had net worths under $500,000. I know that psychiatrists have had historically lower compensation that other specialties but these number seem low. I also know that this is one survey and possible the numbers are skewed based on the participants but another report from 2017 showed similar results. I was wondering what others thought. I know that psychiatrists have the ability to continue to work later in life so that some might not be as concerned with saving. Also, in general, physicians do not have net worths what most would expect.

Many, many doctors are objectively bad with money.
 
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Net worth accumulation is correlated with age - the older you get, all else being equal, the higher your net worth. Also the older you get, you may inherit something from parents that lifts net worth, suddenly.

Therefore without knowing more about the survey, the median age of the respondents, etc., it is hard to say if those numbers are good or bad. I think without knowing much else about it, they look pretty damn good to me.
 
Homework: Read "The Millionaire Next Door."
 
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This is easy to figure out. Psychiatrists have too much time on their hands. They have more time to spend their money -- hence less money. They also have more time to do meaningless activities -- hence active forum. No wonder psychiatry is one of the happiest specialties.
 
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I would say its probaly because:
1) Physicans/Psychiatrists are bad with saving money
2) Physicans/Psychiatrists are bad with investing money and taking risks. Most people that become doctors are the least risk averse people. And thats in every part of their life
3) Psychiatrist salaries only started to recently rise
4) Most Psychiatrist are not the most ambitious pool of indiviuals. Think of why, most went into psychiatry in the first place. Many are not working 50-60+ hours overtime. And if they are, they are hitting 300-400+.
5) By the time most psychiatrist finish residency, they have a wife/husband and kids they have to support. They also take the plunge into buying a house and starting their life
 
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Not a psychiatrist, but short answer: net worth and income are not strongly correlated. For reasons mentioned above (and then some).
This, all the way.

It has very little to do with people being risk adverse. There are plenty tried and true (read: SAFE) means of investing in the long game. If anything they are already making risky investments (commodities), engaging in behavior they may not identify as risky (i.e. listening to a financial adviser or money manager instead of educating themselves and managing their own investments), and/or not living below their means which is a necessary step in accumulating wealth.

Most physicians' lifestyles are driven by their income (and expectations of "living like a doctor"?) which only serves to work against the opportunity to develop financial independence and achieve wealth. A large percentage meet criteria for being Under Accumulators of Wealth (UAW's) and relatively more so than other fields. There are people making a lot less than physicians out there and have higher net worths because they play the game well and that usually starts with a mindset that includes frugality.
 
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Not a psychiatrist, but short answer: net worth and income are not strongly correlated. For reasons mentioned above (and then some).

According to the Medscape survey, net worth and specialty income are strongly correlated. Psychiatry is low compensated specialty.

The most probable reason why net worth and income are not strongly correlated in general is because 50% of high net worth people married into it. For example teachers have a high rate of millioniare net worth. Some people also derive income from trusts that dwarf their income and/or take huge tax deductions.
 
According to the Medscape survey, net worth and specialty income are strongly correlated. Psychiatry is low compensated specialty.

The most probable reason why net worth and income are not strongly correlated in general is because 50% of high net worth people married into it. For example teachers have a high rate of millioniare net worth. Some people also derive income from trusts that dwarf their income and/or take huge tax deductions.

Relatively lower salaries should not preclude achieving wealthy status. Making more money helps no doubt, but many have that only... and lack the solid defense and secondary offense in order to become PAW's. With a bit of financial education and living below one's means there is absolutely NO reason that the average psychiatrist should not be able to increase his/her wealth above that 7 figure mark.

PAW vs UAW: Are you a Prodigious or Under Accumulator of Wealth?

“How do you become wealthy? It’s seldom luck or inheritance or education or even intelligence that builds fortunes. Wealth is more often the result of hard work, perseverance, and, most of all, self-discipline.”
— Dr. Thomas J. Stanley, PhD
 
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In addition to the spending comments above, evaluate the numbers. Estimating 50% of FT 40+ hour psychiatrists are 31-50y/o or so. Most young psychiatrists will start with $200k+ of loans to dig out of. In addition, many psychiatrists are not FT at any age compared to other physicians. Many psychiatrists choose lifestyle academics/government jobs over $.

There are many reasons that the numbers are lower than optimal.
 
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Gross income = pay + investment income
Gross income - Taxes = Net income.
(Net income - spending) x time = net worth

You will be broke the day you stop working if you don't control spending and you will never stop working if you don't save and invest. Pay is in the above equation, but you can be stupid no matter what you earn
 
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There's some significant job market impacts for you guys on this. The older psychiatrists are going to have to remain in the job market for longer which will affect the job market for others.
 
Many, many doctors are objectively bad with money.
Yeah, many of my co-residents are already having lifestyle creep every time we get a raise from advancing a year...
 
The pay of a psychiatrist highly varies depending on where you practice and in what type of practice. I currently make almost double my previous job and work about 45-50 hrs a week but my prior job I worked about 65-70 hrs a week (so if you take that into effect, hour per hour I'm making more than double).
 
The pay of a psychiatrist highly varies depending on where you practice and in what type of practice. I currently make almost double my previous job and work about 45-50 hrs a week but my prior job I worked about 65-70 hrs a week (so if you take that into effect, hour per hour I'm making more than double).
Did you leave private practice? (Old follower here).
 
No. Still in it.
And I miss working in a university. I miss grand rounds, seeing researchers tell me of their latest findings, teaching students, having lunch or coffee while discussing some very interesting cases like I'm in some club only for the elite erudite while in the physician's lounge. My first professor's job was like this.

What I didn't miss was that my last job in a university (at a different place than the above) didn't provide this for me. I was working mostly in the jail that was the equivalent of working in a dungeon with the fumes of bleach and Lysol. The university I was at franchised me out to a local jail. So I was getting the salary of a university professor without the niceties you get with it and doing the work of a forensic psychiatrist without getting the pay of one.

There's a reason why if you work in a jail you usually get paid more cause doctors don't like working in an office with no window, gets no sunlight, that looks like it's a bomb shelter and not a physician's office, breathing in chemical fumes that make you feel sick, while you can't buy lunch cause doing so requires you go through 30 minutes of security check points in and out so you got to bag your lunch like you're in 5th grade, and regularly seeing correctional officers bully inmates. Plus the university wanted me to drive back and forth from work to the university, the trip was 30 minutes plus each time I got back to the jail another 1 hour from my car to my office cause of all the security checkpoints. Each time I told this to the university and various other problems the people that I needed permission to fix the problem from blew me off. The jail and county also weren't observing minimum standards in various areas that I warned the administration of the jail and my dept could land everyone to some very troubling legal situation but again the right people seemed to not give a damn to the point where they were willing to make any change even though I offered to do a lot more work to make those changes happen for no added pay. (There were some people who agreed with me but they had no power over it to fix it including several nurses, a leading nationally recognized forensic psychiatric, other physicians).

So it came down to place where I work hard, the place wasn't following a lot of minimum standard rules that violated my sense of ethics, I gave them several opportunities to fix it with me offering to do the work to fix it (they just had to give me the okay but kept blowing me off) vs working a job that was much less stressful, paid 2x as much, I'm in charge of it so if there's something broke I can fix it immediately instead of going through the committee that keeps talking but does nothing, and I don't have to sell out my ethics? Choice was clear. (The entire story actually is much worse than this with several serious problems at my former place of employment, but I don't feel like writing a post that's 30 screens long).

There's actually much much more to say as to why I left my last job but since some people know where it was and I don't feel like dredging up some bad experiences all over again so I'll end it here.
 
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Do these stats include pension value? A good number of psychiatrists are state/federally employed. If a VA psychiatrist starts at 30 and retires at 60 making 250k they are getting 75K/year pension in addition to whatever they have saved.
 
Just my opinion.

Work for the VA or a state hospital you're going to die a very slow death....the death of being in mediocrity.
What happens in many state hospitals is there's bad doctors and nurses and a lack of mechanisms to remove them. Many of those people are seriously there cause they wanted an easy job where they did little. Also many want to leave but once there for say 5 years get this attitude of, "well I need to be here another 3 years so they'll give me more in my benefits," and end up staying till the end even though they hate their job and it shows in their attitudes, comments and quality of work.

The salary of being in a state hospital for 25 years with the pension is GREAT, but it takes 25 years to get there while private practice the pay is very good from day 1 and you could put a portion into a private pension plus you don't have to deal with the mediocrity BS.

Of course there are some great doctors and nurses in a state hospitals. Also in state psych hospitals I can't say enough good things about good providers that have to deal with the violence, but unfortunately there is an entrenched and large amount of inept and lazy providers to the degree where it does affect morale...especially YOUR MORALE.

I wouldn't be against working for the state again in Ohio but because Ohio had one of the best facilities in the country and was on the forefront of a lot of forensic psychiatry work (It was the starship Enterprise of psychiatric hospitals), but most other places...no way. In many states the state hospital is a dungeon.

The VA same thing except they're usually not dungeons.
 
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75K for 30 years of pension assuming you die at 90 = $2.25 Million

150K for 30 years (30yo to 60yo) assuming you make average PP income 300K and live off 150K = $4.5 Million

350K for 30 years assuming you work hard in PP earning 500K and live off 150K = $10.5 Million

The numbers are even higher for the PP model because c'mon, how many private practice psychiatrists stop working at age 60.
 
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I’m not saying working for the government is best choice financially, just saying that if you included future pension value in the survey there would be a lot more psychiatrists with 1+ million net worths.
 
75K for 30 years of pension assuming you die at 90 = $2.25 Million

150K for 30 years (30yo to 60yo) assuming you make average PP income 300K and live off 150K = $4.5 Million

350K for 30 years assuming you work hard in PP earning 500K and live off 150K = $10.5 Million

The numbers are even higher for the PP model because c'mon, how many private practice psychiatrists stop working at age 60.

I've seen 180-200/hr telepsych rates thrown around this forum. Are you familiar with those type of rates? It seems like a doc who wants to work 45-50 hrs a week at $200/hr is in a pretty good position to hit 500k a year while working from home and avoiding some of the headache that comes with running a small business. Thoughts?
 
It's interesting. I've seen telepsych rates range from $100 to $180, $200/hr is possible, but what's funny is that I've not yet heard of anyone getting rich doing it. Not enough volume? Too many no-shows? Yes and Yes.

Here's what I do know, telepsych companies are having a hard time finding docs to do it. Something about a disconnect between patient and doctor via screens kinda turns me off from it. When it comes down to it, I don't think too many psychiatrists are eager to do it is my sense in the community.
 
It's interesting. I've seen telepsych rates range from $100 to $180, $200/hr is possible, but what's funny is that I've not yet heard of anyone getting rich doing it. Not enough volume? Too many no-shows? Yes and Yes.

Here's what I do know, telepsych companies are having a hard time finding docs to do it. Something about a disconnect between patient and doctor via screens kinda turns me off from it. When it comes down to it, I don't think too many psychiatrists are eager to do it is my sense in the community.

That is interesting. I've seen telepsych companies talk about a gauranteed 40 hours a week...it would *seem* that there is volume there. As far as payment for no shows, I have no idea what the details are regarding that.

I was really hoping to do my 40 hours a week of telepsych right out of residency while building a private practice another 10-20 hours a week. 40*$180 seemed great, but from the sounds of it, that's not exactly reality in the real world which is too bad.
 
That is interesting. I've seen telepsych companies talk about a gauranteed 40 hours a week...it would *seem* that there is volume there. As far as payment for no shows, I have no idea what the details are regarding that.

I was really hoping to do my 40 hours a week of telepsych right out of residency while building a private practice another 10-20 hours a week. 40*$180 seemed great, but from the sounds of it, that's not exactly reality in the real world which is too bad.
I grew-up and went to med school in an area that is very short on psychiatrists and relied heavily on telepsych. In my 4 years in mental health prior to med school and during med school I honestly don’t think I encountered a single psychiatrist who remotely enjoyed telepsych, and most who did it were strong armed into it due to working for healthcare systems. Compliance issues and no shows also seemed to be much more of an issue with telepsych v. in person visits.
 
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Relatively lower salaries should not preclude achieving wealthy status.

Agreed.

But my point is that all things being equal the survey showed a correlation between specialty and net worth: psych/IM/FM/peds/endo were in the bottom of net worth and ortho/GI/cards/rads were at the top.
 
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I would consider tele-psych if I could live overseas at the same time. I think CMS guidelines in some states prohibits it though
 
Agreed.

But my point is that all things being equal the survey showed a correlation between specialty and net worth: psych/IM/FM/peds/endo were in the bottom of net worth and ortho/GI/cards/rads were at the top.
No doubt, make more = (or should =) have more. Offense-Defense-Offense!
 
No. Still in it.
And I miss working in a university. I miss grand rounds, seeing researchers tell me of their latest findings, teaching students, having lunch or coffee while discussing some very interesting cases like I'm in some club only for the elite erudite while in the physician's lounge. My first professor's job was like this.

What I didn't miss was that my last job in a university (at a different place than the above) didn't provide this for me. I was working mostly in the jail that was the equivalent of working in a dungeon with the fumes of bleach and Lysol. The university I was at franchised me out to a local jail. So I was getting the salary of a university professor without the niceties you get with it and doing the work of a forensic psychiatrist without getting the pay of one.

There's a reason why if you work in a jail you usually get paid more cause doctors don't like working in an office with no window, gets no sunlight, that looks like it's a bomb shelter and not a physician's office, breathing in chemical fumes that make you feel sick, while you can't buy lunch cause doing so requires you go through 30 minutes of security check points in and out so you got to bag your lunch like you're in 5th grade, and regularly seeing correctional officers bully inmates. Plus the university wanted me to drive back and forth from work to the university, the trip was 30 minutes plus each time I got back to the jail another 1 hour from my car to my office cause of all the security checkpoints. Each time I told this to the university and various other problems the people that I needed permission to fix the problem from blew me off. The jail and county also weren't observing minimum standards in various areas that I warned the administration of the jail and my dept could land everyone to some very troubling legal situation but again the right people seemed to not give a damn to the point where they were willing to make any change even though I offered to do a lot more work to make those changes happen for no added pay. (There were some people who agreed with me but they had no power over it to fix it including several nurses, a leading nationally recognized forensic psychiatric, other physicians).

So it came down to place where I work hard, the place wasn't following a lot of minimum standard rules that violated my sense of ethics, I gave them several opportunities to fix it with me offering to do the work to fix it (they just had to give me the okay but kept blowing me off) vs working a job that was much less stressful, paid 2x as much, I'm in charge of it so if there's something broke I can fix it immediately instead of going through the committee that keeps talking but does nothing, and I don't have to sell out my ethics? Choice was clear. (The entire story actually is much worse than this with several serious problems at my former place of employment, but I don't feel like writing a post that's 30 screens long).

There's actually much much more to say as to why I left my last job but since some people know where it was and I don't feel like dredging up some bad experiences all over again so I'll end it here.

Wow, that prison experience and the fact the uni was pawning you off out there sounds like it would leave anyone a bit jaded.

That stated, I catch myself drifting during grand rounds, spend my lunches walking campus to get away from the chatter, and dream of having my own solo gig (and of course, making bank). Hate to put it that way, but academia has me looking for the fastest way to break free of it as soon as a I can. If one does not love research and teaching, don't see a reason to stick around unless the lifestyle is cush, which does not seem the case, at my program at least (relatively low pay, too much required call covering way too many patients, inter-departmental BS, etc).

I digress. Any resources you would recommend for a resident (non-trad) looking to set up his own gig in the next 5-10 years? TBH, becoming a competent psychiatrist and achieving financial independence are my goals here.
 
According to the Medscape survey, net worth and specialty income are strongly correlated. Psychiatry is low compensated specialty.

The most probable reason why net worth and income are not strongly correlated in general is because 50% of high net worth people married into it. For example teachers have a high rate of millioniare net worth. Some people also derive income from trusts that dwarf their income and/or take huge tax deductions.

The vast majority of millionaires gained their wealth through 2 or 3 decades of steady investing and saving. Play with a financial calculator and you will realize that pretty much anyone can be a millionaire in the US.

Yes, more income means you can save and invest more, but anyone with a six figure salary can retire a multimillionaire.

With the exception of the standard deduction, tax deductions are trading dollars for quarters.

People marry similar people. Wealthy people don’t usually marry poor people.

Again, steady investing a living well below your means leads to wealth. It is that simple.
 
Wow, that prison experience and the fact the uni was pawning you off out there sounds like it would leave anyone a bit jaded.
And my last employer was a private university so I didn't get a teacher's pension. A teacher's pension in the equivalent of a state/VA pension where you work 25 years and get about half your salary for the rest of your life in pension.

While I was at U of Cincinnati, it was a state school, so you had an incredible state pension option. Private universities? No. Plus the pay was actually less than my pay at U of Cincinnati so I was getting all of the cons of a private job without any of the bonuses (higher pay, less stress, higher respect). My base salary at both places were the same but U of Cincnnati gave you bonuses if you were more productive so I ended up making an extra $25-50K a year from those bonuses. The last place I worked I never got any bonuses despite even getting letters saying I'd get one then it never showed up in my paycheck or otherwise.

So in short I was getting the worst of the worst. Working in poor conditions, low pay, no awesome pension, and I was still loyal (or stupid) enough to tell them of my plan to fix some things where I was literally going to add about 25 hrs a week to my work schedule, I wasn't going to get paid for that extra work time, for about a month to make some needed changes that would actually make them more money (cause once the improvements happened it would've increased productivity) and they were still stupid enough to blow me off.

One of the reasons why I was highly respected at U of Cincinnati was cause when I had an idea to fix something they went with it and when 6 months later the numbers showed the improvement actually made a seriously positive difference (patients and staff happier, better care, better turnaround, shorter hospital stays) the administration would tell me they were happy with me, my patient reviews were great, I loved the teaching students, continued work with my mentors who were 2 of the best in the country, and I felt like my treatment team was a family. I was content with that despite that I would've made more money in private practice.

The last place I worked at was a nightmare. I stayed in it as long as I did cause 9 months I was in denial with how dysfunctional it was, and when I offered to make changes, I even made a note that if they didn't take any of my offers, blew me off 6x in various forms (no response to e-mail, telephone calls, person to person requests to discuss the issue) I decided it was time to go. That took about 3-4 months. Plus I needed time to assess the terrain for the next better job. That took another 3 months.

I still remember just a few weeks into my last job a nurse and a resident told me I'd only be there about 1 year. I asked them why? They both separately told me at that place good doctors always leave within about a year.
 
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Slightly off topic, but does anyone know if it's possible to go into private practice taking insurance and make a significant income (500k give or take) If a doc was okay with a lot of med management type visits and less therapy, is it feasible?

I think I remember seeing reimbursement codes on here and if you saw 3 patients an hour it broke down to something like ~240 an hour. ( do realize geography causes some variation here)..anyone know if that is correct?
 
The vast majority of millionaires gained their wealth through 2 or 3 decades of steady investing and saving.

Again, steady investing a living well below your means leads to wealth. It is that simple.

As an italian with USA relatives, I can pretty see the difference in saving propensity.
American culture is much more earn&spend, that is.
With the american job market it could be not a major problem, but to live below your means is always a good idea, not for wealth accumulation but because you are more free. Poverty is more a realtive concept ( relative to your desires) than an absolute one.
 
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Slightly off topic, but does anyone know if it's possible to go into private practice taking insurance and make a significant income (500k give or take) If a doc was okay with a lot of med management type visits and less therapy, is it feasible?

I think I remember seeing reimbursement codes on here and if you saw 3 patients an hour it broke down to something like ~240 an hour. ( do realize geography causes some variation here)..anyone know if that is correct?

Possible. Many would say not enjoyable or easy but certainly possible.
 
Slightly off topic, but does anyone know if it's possible to go into private practice taking insurance and make a significant income (500k give or take) If a doc was okay with a lot of med management type visits and less therapy, is it feasible?

I think I remember seeing reimbursement codes on here and if you saw 3 patients an hour it broke down to something like ~240 an hour. ( do realize geography causes some variation here)..anyone know if that is correct?

Definitely possible. Keep in mind a few points.
- Quality v. quantity: 3 med management patients per hour with some insurance products may approximate the reimbursement of 1 psychotherapy+med visit.
- Admin: The more medication management you do, the more patients you'll have, and the more admin work. You may need to hire a biller/coder/secretary/office manager. In my experience, patients are more likely to no-show, re-schedule, or go missing to follow-up when they are med only patients.
- Sustainability: At least for me, seeing more than 10 or 12 patients per day, 5-days per week, is exhausting. As a solo provider who does their own front-office work and billing, I've found that 40ish patient contacts are my max (5-hours of 30-min/med appts and 30 hours of therapy).
 
I digress. Any resources you would recommend for a resident (non-trad) looking to set up his own gig in the next 5-10 years? TBH, becoming a competent psychiatrist and achieving financial independence are my goals here.

IMHO you're not going to graduate knowing enough you need to know to be a very good psychiatrist. Nothing personal, I wasn't nor is anyone really. Now of course no one can ever learn all there is to learn but I can say that had I gone into private practice immediately I would've had a A LOT OF WTF moments that would've been avoidable and preferably avoided considering how green I was. I was able to fill in gaps by doing fellowship and by working in academia while being surrounded by very experienced and talented people.

Often times in private practice you're on your own. Even though I work with other psychiatrists who are all former professors we don't do things like grand rounds or official meetings for odd cases though I still discuss a few over coffee.

While you can do private practice right after graduation I'd recommend doing something where you can still bring up your knowledge base and skills and not just doing CMEs. CMEs usually don't discuss real-world experience. You could also partner up with people that you know will be supportive, but many PPs I've seen are simply about pumping patients in and out and churning in the the money. Not all, but if you go to PP right after graduation without getting the inside scoop of the practice you run that risk.
 
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Net worth often has nothing to do with income. My medical director recently completed residency and attended a very pricey DO school. He talks about how he refinanced his loans so I do not believe his parents foot the bill for school for him or anything. Anyway, he currently drives a 50k+ car and bought his SAH wife a BMW. He recently bought a 1.5-2million dollar home. He dresses very well and wears a Rolex, that kind of thing. I have no idea how he is financing this on a psychiatrist’s salary unless he is pulling in 60+ hour weeks (and perhaps he is, he does work a lot). I also have a feeling he’s just not saving anything. I think he's fallen into the trap of overspending/lifestyle inflation to compensate for all the hard work and delayed gratification of med school/residency. At the same time I could be entirely wrong and maybe his wife's family is loaded.

From what I understand the best way to build wealth is to live below your means. Pay off your loans ASAP or refinance them if you can get a great deal. Take half your paycheck every month and invest it. Live on the other half. In a few decades you should be a multimillionaire.
 
Net worth often has nothing to do with income. My medical director recently completed residency and attended a very pricey DO school. He talks about how he refinanced his loans so I do not believe his parents foot the bill for school for him or anything. Anyway, he currently drives a 50k+ car and bought his SAH wife a BMW. He recently bought a 1.5-2million dollar home. He dresses very well and wears a Rolex, that kind of thing. I have no idea how he is financing this on a psychiatrist’s salary unless he is pulling in 60+ hour weeks (and perhaps he is, he does work a lot). I also have a feeling he’s just not saving anything. I think he's fallen into the trap of overspending/lifestyle inflation to compensate for all the hard work and delayed gratification of med school/residency. At the same time I could be entirely wrong and maybe his wife's family is loaded.

From what I understand the best way to build wealth is to live below your means. Pay off your loans ASAP or refinance them if you can get a great deal. Take half your paycheck every month and invest it. Live on the other half. In a few decades you should be a multimillionaire.

I get what you're saying, but this is excessive. Many financial experts suggest a 50/30/20 rule; 50% goes towards rent and essentials, 30% is discretionary, 20% towards savings. A high earner saving 20% will also equate to being a multi-millionaire by retirement age. There's no need to live on half a physicians salary your entire working life so you can have 8 million instead of 4 million at retirement. At some point, you need to enjoy the fruits of your labor while you're still young-ish too.
 
I get what you're saying, but this is excessive. Many financial experts suggest a 50/30/20 rule; 50% goes towards rent and essentials, 30% is discretionary, 20% towards savings. A high earner saving 20% will also equate to being a multi-millionaire by retirement age. There's no need to live on half a physicians salary your entire working life so you can have 8 million instead of 4 million at retirement. At some point, you need to enjoy the fruits of your labor while you're still young-ish too.

Depends on lifestyle and future plans. Do you want to work til retirement, have the option to retire early if you choose, explore side ventures, etc? Also, many double earner households can live quite well on 50% of their income. My wife and I are both doctors (MD and a PhD) and we're pulling in >400k/year. Between saving for retirement and super-charging loan repayment for her, we sock away at least half of our net and still live very well. Of course, neither of us cares about cars, which is a big empty expense, so that helps. We still travel several times a year and splurge on food and such. All a matter of perspective. I'm looking forward to having the option of retirement or just part-time work in my 50's. Don't have to, but it's nice to have that option when the time rolls around.
 
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