Why make 150K when you can make 75K???

[medicinesux]

HUH?!?!

Americans are drowning in debt and our country continues to go down the tubes. Came across these numbers http://blogs.trb.com/business/columnists/brackey/blog/2009/11/compare_your_debts_to_this_lis.htmland was quite frankly blown away. Assuming a 7% interest rate, to service 300K of debt costs 21K a year! This requires roughly 30K of gross income to pay just the interest. And if you consider that the avg income in this country is around 40K, that means 75% of one’s disposable income is used to pay interest on debt. Unbelievable! Is it no wonder why the banks run this country?
If you apply this to physicians, you can throw in an extra 200-300K to account for super sized student loans which is now becoming the “new normal”. Now let’s say you are making 150K a year in good old primary care. According to paycheck city, that leaves roughly 95K for a New Yorker (90K if you are in the city), 92K for a Californian, and 102K for someone in Illinois. Deduct out your 40K in interest payments and let’s say another 10K for property taxes and you are left with 50K to live on. Digest those numbers for a moment. Do you realize that you are now in the same boat as the person making a mere 75K, HALF of your annual salary, who has no debts and eschews living a life of being in debt to others? How can this be? Let’s run some more numbers and see how. After taxes 75K in California is 49K, 51K in NY (48K in NYC), and 53K in IL. Subtract out ZERO interest payments and lower property taxes (by not living in a McMansioin) you are roughly even!!!
By owing money to the banks, you are not only flushing money down the toilet but you are also sacrificing your freedom. The freedom to have more leisure time to do whatever you wish or the ability to work in a job or industry that you would find much more appealing and satisfying. For those in debt, you can easily find yourself in a situation where you are working endless hours a week in a miserable higher paying job just to keep your head above water. So which would you prefer? 60-70 stressful hours a week seeing 35 cranky ass patients a day, filling out reams of paperwork, fighting with HMO’s over billing issues or waking up in the morning going to a job you love 35-40 hrs a week with weekends and evenings off for life? Seems like a no brainer to me.
If there is any good that can be said of having major student loans like so many other med school grads it is that I have vowed to NEVER take out another loan again. NEVER! Fool me once shame on you, fool me twice shame on me. I am a firm believer that the banks in this country are an outright evil parasite draining this country of so much potential greatness. I also believe that CASH is KING. Everything I have purchased since graduating from med school was in cash and will continue to be in cash. This will include even cars and homes. I believe if you can’t afford it now, you have no business buying it despite what our culture and mass media tells you. Start off with a condo and move yourself up to a ranch and then ultimately buy that waterfront home as you save up money like mad not paying usurious interest rates. Don’t buy a McMansion straight out of the gate with a jumbo loan which is the American way. Need to have that Mercedes to complement your “prestige”. Unless you have 50K in the bank you can’t afford it. Rather than ogling with jealousy at the nice shiny Beamer or latest model Mercedes whenever I am sitting in my clunker at a traffic light, I instead find myself feeling so much richer than they are. It sure feels good having NO monthly payment rather than paying a mini mortgage payment every month. Americans want to live big…than they are going to pay big….with their time! Time away from family, friends, and most of all to yourself which you can never get back. We’ve all heard the saying how no one wishes they could’ve spent another day at the office on their death bed. Sadly for some physicians, they will ironically find themselves in this very “office” even on their last day.

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[badasshairday]

HUH?!?!

Americans are drowning in debt and our country continues to go down the tubes. Came across these numbers http://blogs.trb.com/business/columnists/brackey/blog/2009/11/compare_your_debts_to_this_lis.htmland was quite frankly blown away. Assuming a 7% interest rate, to service 300K of debt costs 21K a year! This requires roughly 30K of gross income to pay just the interest. And if you consider that the avg income in this country is around 40K, that means 75% of one’s disposable income is used to pay interest on debt. Unbelievable! Is it no wonder why the banks run this country?
If you apply this to physicians, you can throw in an extra 200-300K to account for super sized student loans which is now becoming the “new normal”. Now let’s say you are making 150K a year in good old primary care. According to paycheck city, that leaves roughly 95K for a New Yorker (90K if you are in the city), 92K for a Californian, and 102K for someone in Illinois. Deduct out your 40K in interest payments and let’s say another 10K for property taxes and you are left with 50K to live on. Digest those numbers for a moment. Do you realize that you are now in the same boat as the person making a mere 75K, HALF of your annual salary, who has no debts and eschews living a life of being in debt to others? How can this be? Let’s run some more numbers and see how. After taxes 75K in California is 49K, 51K in NY (48K in NYC), and 53K in IL. Subtract out ZERO interest payments and lower property taxes (by not living in a McMansioin) you are roughly even!!!
By owing money to the banks, you are not only flushing money down the toilet but you are also sacrificing your freedom. The freedom to have more leisure time to do whatever you wish or the ability to work in a job or industry that you would find much more appealing and satisfying. For those in debt, you can easily find yourself in a situation where you are working endless hours a week in a miserable higher paying job just to keep your head above water. So which would you prefer? 60-70 stressful hours a week seeing 35 cranky ass patients a day, filling out reams of paperwork, fighting with HMO’s over billing issues or waking up in the morning going to a job you love 35-40 hrs a week with weekends and evenings off for life? Seems like a no brainer to me.
If there is any good that can be said of having major student loans like so many other med school grads it is that I have vowed to NEVER take out another loan again. NEVER! Fool me once shame on you, fool me twice shame on me. I am a firm believer that the banks in this country are an outright evil parasite draining this country of so much potential greatness. I also believe that CASH is KING. Everything I have purchased since graduating from med school was in cash and will continue to be in cash. This will include even cars and homes. I believe if you can’t afford it now, you have no business buying it despite what our culture and mass media tells you. Start off with a condo and move yourself up to a ranch and then ultimately buy that waterfront home as you save up money like mad not paying usurious interest rates. Don’t buy a McMansion straight out of the gate with a jumbo loan which is the American way. Need to have that Mercedes to complement your “prestige”. Unless you have 50K in the bank you can’t afford it. Rather than ogling with jealousy at the nice shiny Beamer or latest model Mercedes whenever I am sitting in my clunker at a traffic light, I instead find myself feeling so much richer than they are. It sure feels good having NO monthly payment rather than paying a mini mortgage payment every month. Americans want to live big…than they are going to pay big….with their time! Time away from family, friends, and most of all to yourself which you can never get back. We’ve all heard the saying how no one wishes they could’ve spent another day at the office on their death bed. Sadly for some physicians, they will ironically find themselves in this very “office” even on their last day.

Post this in Pre-allo, allo, pre-dent....... actually everyone in or planning on going to professional school should see this. Especially post this in Pre-allo and Allo, so people realize we are going to get fuct big time when the health "reform" happens.

 

[Blitz2006]

This is probably the most useful post I have ever read on sdn.

More people need to read this. I am sick and tired of hearing my fellow classmates thinking that once they graduate, they will be 'balling' with their BMW M3 and 5 bedroom house.

You are bang on right about the banks. No one realizes interest that the banks charges. Even I didnt realize its like 30K/year, unreal!

Thx for this post,

 

[Toohotinvegas33]

My peds attending 8 years of residency lives in a 1600sq house with 5 kids, and drives a 2000 camry cause she is doesnt have enough miles on her lease to drive her doctor car (nissan pathfinder(not my idea of doctor car)). But she seems happy

 

[pillowhead]

Great post. I've been chipping away at my debt in residency (yes, it is possible unless you live in an uber-expensive area like san francisco or have children to support) and can't wait until the day it's just gone for good. I will never take out loans again for anything except a mortgage. We even paid for my husband's car in cash during my intern year. Freedom from debt equals freedom to do what want. Debt makes you a slave to a job you might end up hating but have no way of getting out of. Medicine is absolutely positively not worth the $300k of debt that some folks are getting themselves into.

 

[Blitz2006]

My peds attending 8 years of residency lives in a 1600sq house with 5 kids, and drives a 2000 camry cause she is doesnt have enough miles on her lease to drive her doctor car (nissan pathfinder(not my idea of doctor car)). But she seems happy

Serious eh? Wow. I go to med school here in the UK, and they all think American doctors roll in 500K/year and drive mercedes S-Class. They have no idea of the real american health care system.

Even worse, these guys here have it so good. Med school straight from highschool, and tuition is 3K pounds/year (5-6Kish USD) for 4 years, with the final year (5th year) paid for by the NHS.

The average debt here for a medical student is 30K pounds (50-60Kish), and most are around 24 years old when they graduate.

Makes u realize how ridiculous the tuitions in the U.S is getting.....

 

[smq123]

Moved to Finance and Investment.

 

[sam1999]

I agree with above regarding loans and I think life style image is projected by media and bought by public.

There is loan repayment program by NIH for those who want to do research. I don't know its current status but still involves 3- 5 years of research and not many people are interested in that kind of field. Career in research has become ever competitive any way and it needs certain personality to withstand that kind of stress.

There is MD/PhD programs as well where you don't pay any tuition fees plus you will get stipend for living as well. Point I am making is there are some choices if you don't want to take debt or less debt.

 

[dotdash]

In general, I agree with the OP. But -- and it's a big but -- both mortgage interest and student loan interest are largely tax deductible. That makes borrowing money a lot cheaper than it sounds, because you keep more of your income.

There are even those who would say you would be a fool to buy a home with cash now. Mortgage rates are at historic lows (now at 4.75%; well within the last 30 years they were up near 15%). Borrow that money now, and inflation and interest rates hikes become your friends. Put your money in the bank and inflation is working against you. Also, home buying with a mortgage is a highly leveraged investment. You put 20% down, but if the of the home goes up by 30%, you make 30% of the whole value not just the downpayment. The bank who loaned you the money still only gets their fixed rate. Sure, you take on the risk, but it's a risk on an investment you are also using as your home and would have to pay to rent anyway.

Access to credit is not an evil. Remember your Marx, you populists out there. Historically, only the wealthy had access to capital (borrowed or otherwise) and were the only ones who could leverage it; universal access to capital allows a more level playing field. Of course, like any other power, it must be used wisely.

Again, I am not saying a lot of debt is a good thing. I'm just saying the financial picture is more mixed than the overly negative picture painted by medicinesux.

 

[southerndoc]

My peds attending 8 years of residency lives in a 1600sq house with 5 kids, and drives a 2000 camry cause she is doesnt have enough miles on her lease to drive her doctor car (nissan pathfinder(not my idea of doctor car)). But she seems happy

Depends on what specialty. Some docs drive a BMW 535i and an Aston Martin DB9 while living in a 4,200 square foot home. Just saying.

 

[wild0ne]

Great post (as usual from medicinesux).

I'm a recent convert to simple living, voluntary simplicity, etc. Something after this whole financial meltdown made me realize just how much power the media, corporations, and the government have over America, and how they use it to fuel consumerism. They have people in a state of voluntary slavery.

I know, because I was there. I bought a fancy car out of college, and it quickly became an anchor around my neck. Sure, I had the prestige, and it was fun to drive. But, the payments and maintenance sucked the enjoyment out quickly.

Now, I find myself longing to get out of debt as quickly as possible, and get out of this rat-race. Give me a stress-free job with stability, modest wealth, and the freedom to enjoy it.

This post just struck a nerve. Glad to know people are increasingly becoming aware of the propaganda.

 

[medicinesux]

This is probably the most useful post I have ever read on sdn.

Freedom from debt equals freedom to do what want. Debt makes you a slave to a job you might end up hating but have no way of getting out of.

Great post (as usual from medicinesux).
Now, I find myself longing to get out of debt as quickly as possible, and get out of this rat-race. Give me a stress-free job with stability, modest wealth, and the freedom to enjoy it.

Thanks for the positive comments. I feel that this posting so nicely encapsulates a myriad number of issues facing our country, our profession, and its impact on ourselves. It is not until you step off the hamster wheel that you are able to finally catch your breath and achieve a state of serenity. I have embraced voluntary simplicity as if it were a religion. I just wished I had known of it sooner. But then again, I may never have found it if it wasn't for all that I had gone through.

 

[sam1999]

We had a financial seminar which was part of MPH class about basic financial stuff doctors should do.

Medical students/doctors should only take loans for 2 things.

1. Education as it pay off very well over a long period of time. Doctors can work longer as there is no retirement age. It is sort of stable job as other profession suffers ups and downs or even fired quite often.

2. Primary residence. He advised only take fixed rate mortgage. I forgot which one 15 year or 30 years.

At the same time he also mentioned that live within your means as he mentioned you can still live very nicely in 3000+ sq. ft home vs macmansion like 5000+ or even larger.

He advised buying car which you need and pay cash if that would mean you have to buy a used car. He mention cars like corolla or similar ones are good as they are fuel efficient and reliable. As a doctor you do need a reliable car.

By the way he is big shot at one of the prominent firms. He told that he himself drives a Nissan Altima.

Many doctors send their kids to private schools but these are few things one can do by living in the area with good public schools etc. In my city I have heard from others (as I don't have kids yet) most expensive area does not has best public schools.

 

[notinkansas]

But -- and it's a big but -- both mortgage interest and student loan interest are largely tax deductible. That makes borrowing money a lot cheaper than it sounds, because you keep more of your income.

Borrow that money now, and inflation and interest rates hikes become your friends. Also, home buying with a mortgage is a highly leveraged investment. You put 20% down, but if the of the home goes up by 30%, you make 30% of the whole value not just the downpayment.

Access to credit is not an evil. Remember your Marx, you populists out there. Historically, only the wealthy had access to capital (borrowed or otherwise) and were the only ones who could leverage it; universal access to capital allows a more level playing field. Of course, like any other power, it must be used wisely.

Again, I am not saying a lot of debt is a good thing. I'm just saying the financial picture is more mixed than the overly negative picture painted by medicinesux.

Regarding tax deductability of interest:
1. Student loan interest deduction is phased out at certain income levels. And guess what? those income levels are in the range that most attendings make. You are now the rich that everybody wants to tax.
2. An expense that is tax deductable is still and expense. You only save a portion of the expense equivalent to your tax bracket. Say your tax bracket is 30%. You give me $1000, I give you back $300. Is that a good deal? So say now you give the bank $1000 in interest and Uncle Sam gives you back $300- Is that a deal? What if you didn't have to pay the bank the $1000 in interest in the first place, so now you get to keep $1000. Which do you prefer?

Regarding inflation:
You are assuming that we will always have inflation. Some experts think we are heading for deflation. Others think we are headed for hyperinflation. Counting on inflation to help you pay off your debt is unwise. With inflation, cost of all goods goes up: gas for that shiny new car, heating oil for the Mc Mansion, etc. Anybody think doctors' salaries will go up in pace with inflation?

Regarding home prices:
We all learned this past year that real estate does NOT always go up. How would you like to be in that McMansion for which you owe $200K more than it's worth, and Medicare cuts reimbursement? Or worse yet, Obama care gets implemented. What are you going to do, see 45 cranky patients a day? Take out 5 more gall bladders a week? Ours is one of the few professions where we have to work more and more every year just to stay even!

Regarding credit in general:
Granted, access to credit isn't evil. It is often abused, though. This recession is hitting many people harder than the one of the 80's because people have more debt and less savings. When overused, which is the norm in our culture, it becomes a huge burden.

Our society has gotten into the habit of chasing after shiny toys, buying them on credit only to discover that we are still not fulfilled. So we go buy the next shiny toy. We have more toys but take more Paxil than ever before. Many (most?) people who are highly leveraged come to regret it.

Regarding negativity:
Why is it whenever anyone suggests that behaving more frugally and not buying into our more is better culture is negative?

Medicinesux is right on the money. There is a growing trend toward consciously choosing a less debt burdened lifestyle and most people who do so are HAPPIER than they were when they were burdened by debt. It IS true that you can live on a smaller salary, or retire earlier, when you make choices that involve less debt. The banks heavily market debt because they make a tremendous amount of money off the interest. Those who pay interest are wind up poorer, those who are paid interest wind up richer.

Personally, I think our standard culture of working your tail off to make payments every month for stuff that doesn't matter anyway and hoping you can retire at 65 or 70 or whenever, is a much more negative way to live than having the freedom and flexibility to jump on plane and spend a couple months on a nice beach somewhere it you want to.

More people should be aware of the choices involved in voluntary simplicity and the freedom it brings. To suggest it is negative is ludicrous.

 

[sgtbrushes]

Great post; many people don't really stop and do the math of just how bad the numbers work out. The only thing I would do is maybe separate it into a few paragraphs.

Luckily, my wife will be fitting my tuition bill, so I'm free to choose any specialty.

 

[nontrdgsbuiucmd]

I personally agree with "less is better" as a mantra, we pay cash for cars and borrow only for mortgage and student loans; a few things to add/modify:

If my projected, long term income as a physician were 150K, I would sign up for the federal program introduced several months ago that requires payment only of 15% of income that exceeds some bare minumum based on family size. I believe for a single person, this would be 15% of all income that exceeds the first 15,000 of annual income; this equates to student loan payments of 20,250 per year by my math. Under this program, any student loan balance left after 25 yrs is forgiven.

Per an MD faculty at my school, most recent annual earnings of an FP is 193K, so hopefully this will be less of an issue.

Regarding "banks are an outright evil parasite"; this is akin to saying "doctors are arrogant". I'd suggest not saying either one if you'd expect to be taken seriously. Banks are owned by shareholders and massively regulated by the Government. The potential borrower goes to the bank. The bank discusses terms under which it will lend. The borrower either agrees and takes the loan, or disagrees and walks away. If the bank or the lender violoates the contract, the terms of the contract dictate what happens. If things get messy, the lawyers get called in. Which step involves parasitism?

Some might argue that a bank willing to lend a new resident $5,000 to buy that used corolla needed to drive to the hospital is a good thing. The best thing about capitalism, however, is that you always have the option of not taking what they're offering. There's always the credit unions (which are 100% owned by the borrowers/memebers of that union). Then if anyone's an outright parasite, he or she can check the mirror on the way out of the branch to see what the parasite looks like..

 

[scrubswannabe]

I personally agree with "less is better" as a mantra, we pay cash for cars and borrow only for mortgage and student loans; a few things to add/modify:

If my projected, long term income as a physician were 150K, I would sign up for the federal program introduced several months ago that requires payment only of 15% of income that exceeds some bare minumum based on family size. I believe for a single person, this would be 15% of all income that exceeds the first 15,000 of annual income; this equates to student loan payments of 20,250 per year by my math. Under this program, any student loan balance left after 25 yrs is forgiven.

Per an MD faculty at my school, most recent annual earnings of an FP is 193K, so hopefully this will be less of an issue.

Regarding "banks are an outright evil parasite"; this is akin to saying "doctors are arrogant". I'd suggest not saying either one if you'd expect to be taken seriously. Banks are owned by shareholders and massively regulated by the Government. The potential borrower goes to the bank. The bank discusses terms under which it will lend. The borrower either agrees and takes the loan, or disagrees and walks away. If the bank or the lender violoates the contract, the terms of the contract dictate what happens. If things get messy, the lawyers get called in. Which step involves parasitism?

Some might argue that a bank willing to lend a new resident $5,000 to buy that used corolla needed to drive to the hospital is a good thing. The best thing about capitalism, however, is that you always have the option of not taking what they're offering. There's always the credit unions (which are 100% owned by the borrowers/memebers of that union). Then if anyone's an outright parasite, he or she can check the mirror on the way out of the branch to see what the parasite looks like..

Thanks for the post and I agree that people that borrow money know the deal and have an option to accept or reject any offer they get.

I bolded that part above because I didn't understand what you were trying to say here. I did the math and 15 percent of 193,000, multiplied by 25 years comes out to 723,750. And according to the rest of that policy, the rest of the debt will be forgiven.

Is that a ridiculously good deal?
Why did you say you would take that if your salary was 150k?

 

[futureboy]

Regarding tax deductability of interest:
1. Student loan interest deduction is phased out at certain income levels. And guess what? those income levels are in the range that most attendings make. You are now the rich that everybody wants to tax.
2. An expense that is tax deductable is still and expense. You only save a portion of the expense equivalent to your tax bracket. Say your tax bracket is 30%. You give me $1000, I give you back $300. Is that a good deal? So say now you give the bank $1000 in interest and Uncle Sam gives you back $300- Is that a deal? What if you didn't have to pay the bank the $1000 in interest in the first place, so now you get to keep $1000. Which do you prefer?

1. You're right about the student loan interest deduction. It's a joke. It's even more limited if you're married to a spouse who also has loans. For my wife and me, the deduction is capped at $2,500 per year, total, for the both of us. Big freaking deal. We pay $10,000 to $12,000 in student loan interest per year.

2. I agree with your point about the mortgage interest/property taxes deduction. It does, however, effectively reduce your monthly mortgage payment (in your example, by $300). With that said, I cringe when I hear someone say they want to buy a house because they're "wasting money" on rent. They have no clue how much it actually costs to own a house. Home ownership was a mediocre to poor long-term investment even when home values increased every year.

 

[ForrestG]

Call me lazy. . .at least too lazy to do my own analysis. . .but I'm curious what the OP thinks of certain programs available like the KS medical student loan program. You trade 4 yrs primary care service in an underserved county for free tuition and $2000/mo living expenses. My cousin-in-law did this and was able to graduate debt-free and buy a nice $300K house immediately after residency and put her husband through undergrad.

On the other hand. . .said cousin-in-law's brother became a radiologist and now has a fairly senior level position making upper-range radiologist money. He graduated back in the early 90's so it was less expensive, but I'm curious what's the better way to go.

Go for free, still be a doctor but be locked into primary care, or specialize (with a little luck) in something more lucrative. I know, much depends on what you "love" but I'm definitely one to weigh financial security. (I'm a nontrad with older kids).

 

[scrubswannabe]

lol u said nice 300k house - where is that?
where i live 300k house gets you a run down piece of dump..
anyway as for which choice is better - in the past anyone would tell you obviously its better to specialize than join one of those programs if you're looking at it from a finacial perspective because its the difference between making 300k and 150k for the rest of your career as a doctor (lets say 50 years)
50 times 300k = 15,000,000 - lifetime earnings
50 times 150k = 7,500,000 - lifetime earnings

lets face it - your loans are not going to be worth 7.5 million dollars
so in the long run you'd be better off becoming a specialist and paying off your loans and you'd be making more money than someone that went to primary care and those programs where they pay your loans off for you

HOWEVER
medicine in america is changing as we all know. In england family practice and cardiologists make the same amount of money. as Obama plans to increase the amount of money family practice and primary care makes and decrease the amount specialists make, maybe the better choice will be to join those loan forgiveness type programs because then there would be much less of a salary difference between specialists and primary care.

There is something else to consider which I have failed to mention, however, and that is what you actually want to do. There's a big difference between being a primary care doctor and a specialist in the work that you do and the types of patients that you see. All financial concerns aside would you want to work as a primary care doctor? If not then forget the loan forgiveness. If your goal is to work as a primary care doctor, then by all means go for the programs.

I guess I focused on the analytics of the decision but in reality it doesn't really matter - do what you enjoy and you'll be happy with either one of those paths. That's the good thing about medicine - all paths provide financial stability.

 

[YouISee]

HOWEVER
medicine in america is changing as we all know. In england family practice and cardiologists make the same amount of money. as Obama plans to increase the amount of money family practice and primary care makes and decrease the amount specialists make, maybe the better choice will be to join those loan forgiveness type programs because then there would be much less of a salary difference between specialists and primary care.

There is something else to consider which I have failed to mention, however, and that is what you actually want to do. There's a big difference between being a primary care doctor and a specialist in the work that you do and the types of patients that you see. All financial concerns aside would you want to work as a primary care doctor? If not then forget the loan forgiveness. If your goal is to work as a primary care doctor, then by all means go for the programs.

As long as liability is eliminated, we can have same pay. Otherwise, nature of risk and length of training should factor into pay. Medicine is one field where we can compare some variables between specialties. If a primary care guy thinks his cognitive abilities price match a cardiac surgeon's skill to sow a graft, I'm laughing. That surgeon would be better off seeing a patient in clinic, match symptoms on uptodate, and give a script or usually some advice (ex: stopping being a fat f#*k) which no one listens to. How do you compare that?

 

[ForrestG]

lol u said nice 300k house - where is that?
where i live 300k house gets you a run down piece of dump..
anyway as for which choice is better - in the past anyone would tell you obviously its better to specialize than join one of those programs if you're looking at it from a finacial perspective because its the difference between making 300k and 150k for the rest of your career as a doctor (lets say 50 years)
50 times 300k = 15,000,000 - lifetime earnings
50 times 150k = 7,500,000 - lifetime earnings

lets face it - your loans are not going to be worth 7.5 million dollars
so in the long run you'd be better off becoming a specialist and paying off your loans and you'd be making more money than someone that went to primary care and those programs where they pay your loans off for you

HOWEVER
medicine in america is changing as we all know. In england family practice and cardiologists make the same amount of money. as Obama plans to increase the amount of money family practice and primary care makes and decrease the amount specialists make, maybe the better choice will be to join those loan forgiveness type programs because then there would be much less of a salary difference between specialists and primary care.

There is something else to consider which I have failed to mention, however, and that is what you actually want to do. There's a big difference between being a primary care doctor and a specialist in the work that you do and the types of patients that you see. All financial concerns aside would you want to work as a primary care doctor? If not then forget the loan forgiveness. If your goal is to work as a primary care doctor, then by all means go for the programs.

I guess I focused on the analytics of the decision but in reality it doesn't really matter - do what you enjoy and you'll be happy with either one of those paths. That's the good thing about medicine - all paths provide financial stability.

Well, I'm not going to practice till I'm in my late 80's so I won't lose 7.5M. . .I'm 31.

I figured out being an EM doctor in the program (allowed to count as PC) vs. being an anesthesiologist takes about 15 years (from starting MS1) for anesthesiology to overtake EM in the net earnings after loans are paid. Of course these are rough calcs with rough salary assumptions.

Interestingly, it is the same amount of time EITHER takes to put me ahead of just staying in engineering salary-wise. . .

That's why I quit taking classes this fall. . .the math just didn't work in the short term. If I work till 65, though, I'd have a few million more than an engineer would. There are really too many variables to say for sure though, when I start looking at 401K matching and returns I'd miss out on when I am in school.

This is why the non-financially savvy Career Coach hacks just tell everyone to do what they love. . .

 

[ForrestG]

As long as liability is eliminated, we can have same pay. Otherwise, nature of risk and length of training should factor into pay. Medicine is one field where we can compare some variables between specialties. If a primary care guy thinks his cognitive abilities price match a cardiac surgeon's skill to sow a graft, I'm laughing. That surgeon would be better off seeing a patient in clinic, match symptoms on uptodate, and give a script or usually some advice (ex: stopping being a fat f#*k) which no one listens to. How do you compare that?

You must still be at the point in your life where you think that the government pays attention to logic and reason when creating policy. It's not about who has better skills. . .it's about redistribution of wealth. (Of course that's just my opinion.)

 

[southerndoc]

It's not all about the money. Doing something where you aren't happy will lead to burnout. Trust me, there is a huge difference in anesthesia v. emergency medicine. One is a "coordinated chaos" where primarily things are scheduled, but critical care is needed. The other is an uncoordinated chaos where you're often overwhelmed with unscheduled patients that exceed capacity, and only 10% of your care is critical care.

 

[ForrestG]

It's not all about the money. Doing something where you aren't happy will lead to burnout. Trust me, there is a huge difference in anesthesia v. emergency medicine. One is a "coordinated chaos" where primarily things are scheduled, but critical care is needed. The other is an uncoordinated chaos where you're often overwhelmed with unscheduled patients that exceed capacity, and only 10% of your care is critical care.

I hoped you didn't get the impression that I was comparing these specialities as if one would substitute for the other. It was strictly a financial comparison.

I've already spent 10 yrs doing what I don't love, so > $$, but I also love paying my bills on time and couldn't come to terms with such a major career change if it was not at least break-even for me.

 

[scrubswannabe]

Well, I'm not going to practice till I'm in my late 80's so I won't lose 7.5M. . .I'm 31.

I figured out being an EM doctor in the program (allowed to count as PC) vs. being an anesthesiologist takes about 15 years (from starting MS1) for anesthesiology to overtake EM in the net earnings after loans are paid. Of course these are rough calcs with rough salary assumptions.

Interestingly, it is the same amount of time EITHER takes to put me ahead of just staying in engineering salary-wise. . .

That's why I quit taking classes this fall. . .the math just didn't work in the short term. If I work till 65, though, I'd have a few million more than an engineer would. There are really too many variables to say for sure though, when I start looking at 401K matching and returns I'd miss out on when I am in school.

This is why the non-financially savvy Career Coach hacks just tell everyone to do what they love. . .

(Oh, and BTW, $300K buys a lot of house in KS, and that isn't even in the rural area.)

So ForrestG, I dont understand - are you quitting engineering classes or pre-medical classes. Have you come to the conclusion that since it takes 15 years for you to make more money as a doctor than as an engineer, that you're better off staying in engineering, or have you decided that you rather do medicine despite the 15 years it will take to financially benefit you.
I'm just curious to know because it must be a tough decision going from making an engineers salary to going back to school for 4 years and taking out loans.

 

[ForrestG]

.

 

[ForrestG]

.

 

[notinkansas]

You must still be at the point in your life where you think that the government pays attention to logic and reason when creating policy. It's not about who has better skills. . .it's about redistribution of wealth. (Of course that's just my opinion.)

AMEN!!!

I would take it one step further, it's not only about re-distributing the wealth (as Obama made clear in his off teleprompter slip to Joe the Plumber) but it's also about taking control of as much of the private sector as possible. Both of the current "health care reform" bills contain clauses that basically state if your private insurance company makes any changes at all to the policy, they are subject to a huge number of burdensome rules. The ultimate goal is to put the insurance companies out of business and force everyone on the public "option" with government panels deciding who gets what.

 

[gman33]

It's not all about the money. Doing something where you aren't happy will lead to burnout. Trust me, there is a huge difference in anesthesia v. emergency medicine. One is a "coordinated chaos" where primarily things are scheduled, but critical care is needed. The other is an uncoordinated chaos where you're often overwhelmed with unscheduled patients that exceed capacity, and only 10% of your care is critical care.

Do you think you would have been happier in Gas?

 

[southerndoc]

Do you think you would have been happier in Gas?

Probably not. Anesthesiologists work my hours than I do.

 

[cardiology88]

I hate how doctors think they are the only ones that graduate with debt. I have a friend who is a middle school teacher. She went to a private college and is 160K in debt. She will probably never see six figures in her life. At least as doctors we will be able to pay back these loans with our 200k salary.

 

[southerndoc]

I hate how doctors think they are the only ones that graduate with debt. I have a friend who is a middle school teacher. She went to a private college and is 160K in debt. She will probably never see six figures in her life. At least as doctors we will be able to pay back these loans with our 200k salary.

Who says doctors are the only ones who graduate with debt? I've never met a physician who thought that. A large majority of college graduates are in debt.

 

[ForrestG]

I hate how doctors think they are the only ones that graduate with debt. I have a friend who is a middle school teacher. She went to a private college and is 160K in debt. She will probably never see six figures in her life. At least as doctors we will be able to pay back these loans with our 200k salary.

The difference is you can become a teacher for ~$50K, including tuition, room and board, etc. at a smaller state university. For med school, the lowest-cost option is still over six figures, on top of any undergrad debt.

Lesson here is don't go to an expensive private college and rack up a bunch of debt for a job that maxes out under $80K.

 

[Lonestar]

I am an anesthesiologist. I have worked in private practice for 1.5 yrs. Its ok. Everything in life has its pros and cons.

I take q4 call. Call is light (some epidurals and some emergency surgeries). Take beeper call from home after the cases are done (usually by 6-7 pm on the day of call). At 7 AM, I go home (or most of the time I am home) and have the rest of the day off. Every 4th weekend call (Friday, Sat, Sun). About 7 calls per month.

Vacation: Every 4th week is off. Can mix and match the vacation to take 3 wks off together.

For Anesthesia, call is the bane of life. Unfortunately in our field, if you wanna make any kind of headway in income, you have to be willing to take call. Some places are busier than others. Hope this helps.

 

[Slack3r]

It's not all about the money. Doing something where you aren't happy will lead to burnout. Trust me, there is a huge difference in anesthesia v. emergency medicine. One is a "coordinated chaos" where primarily things are scheduled, but critical care is needed. The other is an uncoordinated chaos where you're often overwhelmed with unscheduled patients that exceed capacity, and only 10% of your care is critical care.

Doing something you're happy with without getting paid anything sucks almost as bad.

 

[LUBDUBB]

.... Medicine is absolutely positively not worth the $300k of debt that some folks are getting themselves into.

Sure it is. Any a crayon-head with an MD can earn six figures even with the intellectual capacity of a pygmy.

Any other field, if you're not at the top then you're out the door. So please no one start with the "law and business..." fallacy.

 

[notinkansas]

If you look at it from a purely financial perspective, maybe you can say it's worth it. But you'd also have to factor in the delay in earning a salary for the extra 4 years in school, and the added interest from forebearance during residency (3-7 years worth, since most of us can't afford loan payments on a resident salary).

If you look at it from a happiness standpoint, many of us say not so much. The hassle factor/bs factor is huge. Dealing with demanding patients, patients with an entitlement mentality, noncompliant patients, etc is very draining. I find maybe 30% of my patient interactions to be satisfying. The rest seem determined to suck the life out of me. Not to mention the stress of dealing with nurses who are increasingly "empowered" to question doctors. Not saying that's all bad, but more and more I find that nurses seem to think they can tell me what to do- and they have no idea.

The hassle factor per net dollar earned makes it not worth it for me. If you have high tolerance for stupid BS, maybe you can overlook it. I my BS tolerance is pretty low.

 

[Elpenor]

I have a friend who is a middle school teacher. She went to a private college and is 160K in debt.

I have one thing to say about this.

LOL HAHAHAHAH

 

[koercive]

That article should be a requirement for any student who is taking out professional school loans.

Here in California, after taxes / high cost of living / on top of paying off student loans, there is almost nothing left to save...

 

[La Fiera]

"student loan interest are largely tax deductible. That makes borrowing money a lot cheaper than it sounds, because you keep more of your income."

Uhhh,
Student loan interest is only tax deductible up to $2500, AND if you make more than $166,000 you can't deduct ANYTHING!!! No itemized deductions! (Thanks Obama for decreasing that- I thought the max income for itemized deductions was supposed to be $215,000 but as we all know too well, all politicians lie.)

Loved the bit about the parasitic banks- completely agree with that (credit unions excluded). What country allows its wealthiest members to get bailed out in a time of need, and its middle class to suffer and bare the brunt of a depression? I'd enjoy seeing Goldman Sachs crumble under its own greed.

We should start a movement to refuse to pay back our loans (just like the banks, Sallie Mae is a gluttonous pig) if the government reduces our salaries,