CNBC - [Among millionaires, 4% are doctors]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
NYGiantsFan
Posts: 181
Joined: Fri Aug 17, 2012 7:59 am

CNBC - [Among millionaires, 4% are doctors]

Post by NYGiantsFan »

[Thread retitled. As noted in my post below, the focus is why physicians aren't millionaires and provide actionable ways to avoid it. --admin LadyGeek]

As per CNBC, only 4 % doctors are millionaires. That's surprising considering almost all the medical specialties have 6 figure plus salaries.
http://www.cnbc.com/id/101643922/page/3

I am not doctor and just wondering why % is so low for doctors.
User avatar
munemaker
Posts: 4174
Joined: Sat Jan 18, 2014 6:14 pm

Re: CNBC - 4% doctors are millionaires!!

Post by munemaker »

I am not a medical doctor either, and I agree it does seem low.

If true, I guess it could be due to the high cost of medical school and malpractice insurance. I imagine most doctors have expensive cars and homes, so they may be paying down debt.
User avatar
nisiprius
Advisory Board
Posts: 42535
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: CNBC - 4% doctors are millionaires!!

Post by nisiprius »

I think the chart is saying that only 4% of millionaires are doctors. That's quite different from saying only 4% of all doctors are millionaires.
Last edited by nisiprius on Thu May 08, 2014 12:39 pm, edited 3 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
ajcp
Posts: 645
Joined: Fri Dec 13, 2013 6:44 pm

Re: CNBC - 4% doctors are millionaires!!

Post by ajcp »

Even if you have a 1/4 million salary, that's 4 times income. That doesn't seem low if you think about how much of the general population has 4x salary saved.

ETA: Didn't click the link originally, but I agree with nisiprius.
Topic Author
NYGiantsFan
Posts: 181
Joined: Fri Aug 17, 2012 7:59 am

Re: CNBC - 4% doctors are millionaires!!

Post by NYGiantsFan »

I think the chart is saying that only 4% of millionaires are doctors. That's quite different from saying only 4% of all doctors are millionaires.

Thanks for the correction.
mbres60
Posts: 1054
Joined: Tue Jul 03, 2007 1:47 pm

Re: CNBC - 4% doctors are millionaires!!

Post by mbres60 »

nisiprius wrote:I think the chart is saying that only 4% of millionaires are doctors. That's quite different from saying only 4% of all doctors are millionaires.
I agree. The chart shows that 4% of millionaires are doctors.
bkslainte
Posts: 173
Joined: Tue Aug 21, 2012 6:37 pm

Re: CNBC - 4% doctors are millionaires!!

Post by bkslainte »

I think you can find part of the answer in the previous slide
Three-fourths of America's millionaires are retired, and nearly 60 percent are grandparents with an income of less than $150,000 per year.

Just under a quarter of the millionaires surveyed had a household income of more than $200,000.
According to that survey, 60% of millionaires had incomes of $150,000 or less. I think it has been mentioned on this forum(maybe once or twice :)) but high income doesn't always equal high wealth.
User avatar
nisiprius
Advisory Board
Posts: 42535
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: CNBC - 4% doctors are millionaires!!

Post by nisiprius »

One could continue the chart downward and say that (guessing of course) less than 1% of the nation's millionaires are surgeons, and less than 0.1% of the nation's millionaires are neurosurgeons, and less than 0.01% of them neurosurgeons practicing in New York City... but that wouldn't mean that being a neurosurgeon is a low-earning specialty or that New York City is a low-earning place to practice...
Last edited by nisiprius on Thu May 08, 2014 12:44 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: CNBC - 4% doctors are millionaires!!

Post by staythecourse »

As Nisi nicely pointed out that it is 4% off all the millionaires are doctors and NOT that only 4% of doctors are millionaires.

What is interesting is that JD and MD are roughly the same proportion of the millionaires out there. They both require postcollege education at the similar level of years, would think similar levels of debt, and later years of starting on saving. I would assume though that the median salaries of physicians are considerably higher then for lawyers, no?? So what is the reason that Doctors are not a higher ratio of millinoaires then lawyers? Bad investing? Too much spending?

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
User avatar
HardKnocker
Posts: 2063
Joined: Mon Oct 06, 2008 11:55 am
Location: New Jersey USA

Re: CNBC - 4% doctors are millionaires!!

Post by HardKnocker »

You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.

You have to keep up with your doctor friends and their lifestyle.

All the same I don't think too many doctors are pleading poverty.

It's very hard and expensive to become a doctor so I can understand their compensation.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
YttriumNitrate
Posts: 1093
Joined: Tue Mar 26, 2013 12:13 pm

Re: CNBC - 4% doctors are millionaires!!

Post by YttriumNitrate »

Doing a bit of investigating, there are 9.63 millionaire households in the US, so 4% of that would mean that there are about 380,000 millionaire doctor households. In 2012 there were 878,194 licensed physicians. Bumping that number up to a million (just as a guess) to account to retired physicians who are no longer licensed, we come to the conclusion that about 1 in 3 doctors is a millionaire.
Leesbro63
Posts: 6855
Joined: Mon Nov 08, 2010 4:36 pm

Re: CNBC - 4% doctors are millionaires!!

Post by Leesbro63 »

Even 1 in 3 sounds low. I guess you must eliminate most docs under 40 (since most don't start earning till after 30, and have debt up to their eyeballs).
Last edited by Leesbro63 on Thu May 08, 2014 12:57 pm, edited 2 times in total.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: CNBC - 4% doctors are millionaires!!

Post by staythecourse »

These graphs are terrible and hard to understand.

Those who are millionaires it shows near 60% make <150k per year. Does that include those who are currently working only or those who are retired and grandparents? Those who are retired do they include grandparents as well and vice versa?? I think there data may not be well isolated.

[OT comments removed by admin LadyGeek]

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
Ancal
Posts: 49
Joined: Wed Jan 23, 2013 1:37 pm

Re: CNBC - 4% doctors are millionaires!!

Post by Ancal »

staythecourse wrote: What is interesting is that JD and MD are roughly the same proportion of the millionaires out there. They both require postcollege education at the similar level of years, would think similar levels of debt, and later years of starting on saving. I would assume though that the median salaries of physicians are considerably higher then for lawyers, no?? So what is the reason that Doctors are not a higher ratio of millinoaires then lawyers? Bad investing? Too much spending?
While you may be right on median, the mean salary for lawyers may be higher. Partners at big firms can make millions. Doctors rarely make that unless they become lobbyists or consultants.

White Coat Investor (http://whitecoatinvestor.com) has some information on the financial slips many doctors make.
tphp99
Posts: 344
Joined: Sun Jan 03, 2010 8:47 pm

Re: CNBC - 4% doctors are millionaires!!

Post by tphp99 »

staythecourse wrote: So what is the reason that Doctors are not a higher ratio of millinoaires then lawyers?
Answer: too many JDs... :oops:
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: CNBC - 4% doctors are millionaires!!

Post by staythecourse »

YttriumNitrate wrote:Doing a bit of investigating, there are 9.63 millionaire households in the US, so 4% of that would mean that there are about 380,000 millionaire doctor households. In 2012 there were 878,194 licensed physicians. Bumping that number up to a million (just as a guess) to account to retired physicians who are no longer licensed, we come to the conclusion that about 1 in 3 doctors is a millionaire.
Don't think your denominator are correct. The other graphs show many of the millionaires are retired and/ or grandparents. Looking at current license will not give you the total.

Does that mean the demoninator would be larger and thus doctors who are millionaires are less frequent then what you suggest??

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: CNBC - 4% doctors are millionaires!!

Post by staythecourse »

Ancal wrote:While you may be right on median, the mean salary for lawyers may be higher. Partners at big firms can make millions. Doctors rarely make that unless they become lobbyists or consultants.
Agreed the range of salaries of lawyers are significant. The dispersion aroudn the median is signficantly higher then for physicians, i.e many more million incomes producing lawyers then doctors.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
YttriumNitrate
Posts: 1093
Joined: Tue Mar 26, 2013 12:13 pm

Re: CNBC - 4% doctors are millionaires!!

Post by YttriumNitrate »

staythecourse wrote:Don't think your denominator are correct. The other graphs show many of the millionaires are retired and/ or grandparents. Looking at current license will not give you the total. Does that mean the demoninator would be larger and thus doctors who are millionaires are less frequent then what you suggest??
I bumped the number of MDs up from 878,000 to a million to account for retired MDs. I would have bumped it up higher, but almost 10% of licensed MDs are over the age of 70 (page 3 of PDF). But, as I wrote, it's just a guess. Also, there are two MD households which I didn't take into account.
anil686
Posts: 1110
Joined: Thu May 08, 2014 12:33 pm

Re: CNBC - 4% doctors are millionaires!!

Post by anil686 »

HardKnocker wrote:You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.

You have to keep up with your doctor friends and their lifestyle.

All the same I don't think too many doctors are pleading poverty.

It's very hard and expensive to become a doctor so I can understand their compensation.

I am a physician (first time posting - normally just read). It really depends on the type of physician you are in general (just like any profession anywhere). There are some of us who are savers, there are some of us who are spenders and there are some of us who are so specialized (i.e. neurosurgery) that they command very high incomes and can be spenders and savers at the same time. Some of my friends who are family physicians (over 30 years in practice) are millionaires. Some of my specialist colleagues after 30 years in orthopedic surgery (a very lucrative area of medicine) are worried about how little they have saved for retirement and are continuing to practice.

Unfortunately, many of us have very little experience or exposure to business/investing and spend our 20's going through school, our late 20's and early 30's in training programs that paid about $30,000 per year in 1999-2004 (my training time) with about $150,000 in student debt. I never complain because I am so lucky to have a career that I enjoy and rewards me financially for something I love to do. We (as a general class of individuals) are often prey to the financial machines that are out there. For example, we all need disability insurance to protect our incomes - they same insurance agents try to sell us whole life and annuities. I have a stock broker that contacts me weekly about the "latest tips" and recommended that I invest in some high cost mutual funds before.

About 7 years ago, my retirement plan was a disaster. My father, a construction worker who saved every week and bought stock from four companies directly by mailing checks every month (KO, WMT, JNJ and PG) did very well for his retirement. He recommended I read Bogle's book - common sense investing. It struck a chord and made sense. I changed my IRA (I had left a practice and started my own) to Vanguard and bought a TR fund. I have stayed with it. I have my 401 K with Vanguard now and just max out every year. I sleep better and feel better about what I am doing. However, many physicians do not do that. I have been told by many of my friends who are investment advisors that we are easy marks (since we do not know much about investing and have little experience). I would add that since we start earning a considerable income later in life, we tend to reach (or overreach) on return and thus make very poor investment decisions based on greed/fear instead of sound ideas.

I will say I live in a nice area of suburban DFW - mainly because it has great public schools, I drive a Ford Focus and the doctor's parking lot where I am located at (our zip code is typically in the top 15-20 for income in the US) - has a decent mix of Honda's, Toyota's, Ford's and Buicks (combined about 60%) with the rest split primarily btw BMW and Lexus. Most of us work about 60 - 80 hours a week (private practice and run our own small business) and thus I do hire a lawn mowing service as well as true green. I do also have a house cleaner as my wife is also a physician and works about 40 hours a week part time. I think in general, the public has an exaggerated sense of both the income of an average physician as well as the lifestyle - I am not complaining - just offering my personal observations.
EnjoyIt
Posts: 5309
Joined: Sun Dec 29, 2013 8:06 pm

Re: CNBC - 4% doctors are millionaires!!

Post by EnjoyIt »

Doctors tend to be financially ignorant, commonly get duped by financial advisors and insurance salesmen. Doctors also feel that they should live the life of a doctor. I have several doctor friends who fall into those categories and are not millionaires.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
new2bogle
Posts: 1627
Joined: Fri Sep 11, 2009 2:05 pm

Re: CNBC - 4% doctors are millionaires!!

Post by new2bogle »

HardKnocker wrote:It's very hard and expensive to become a doctor so I can understand their compensation.
It's hard and expensive for sure, but I don't believe that is the reason for their compensation. The compensation is due to the AMA cartel keeping salaries high by artificially lowering supply.
MichDad
Posts: 596
Joined: Sat Apr 20, 2013 3:50 pm

Re: CNBC - 4% doctors are millionaires!!

Post by MichDad »

The American Bar Association reports that as of 2010, there were 1,225,452 lawyers in the United States.

http://www.americanbar.org/content/dam/ ... eckdam.pdf

The ABA document also reports that in 2000, 8 percent of lawyers worked for federal, state, or local governments, 3 percent worked for the judiciary, 1 percent worked for legal aid or public defender's offices, and 1 percent worked for private associations, which I assume includes non-profit organizations. I suspect that a greater percentage of lawyers are employed by federal, state, or local governments than medical doctors. Generally, government entities pay lower salaries than do their private sector counterparts.

MichDad
John3754
Posts: 1289
Joined: Tue Mar 19, 2013 8:56 pm

Re: CNBC - 4% doctors are millionaires!!

Post by John3754 »

I'm an MD, I'm not a millionaire because I'm only a few years out of training. If I continue on my current path of living below my means I will be a millionaire in a few years. That said, I can tell you why most doctors are not millionaires because I see it all around me...my friends and colleagues who are also MDs all have 6 figure salaries, but have 7 figure spending habits. It's that simple.
Last edited by John3754 on Thu May 08, 2014 1:40 pm, edited 1 time in total.
User avatar
HomerJ
Posts: 15666
Joined: Fri Jun 06, 2008 12:50 pm

Re: CNBC - 4% doctors are millionaires!!

Post by HomerJ »

HardKnocker wrote:You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.
Why do you have to?
TSR
Posts: 953
Joined: Thu Apr 19, 2012 9:08 am

Re: CNBC - 4% doctors are millionaires!!

Post by TSR »

staythecourse wrote:As Nisi nicely pointed out that it is 4% off all the millionaires are doctors and NOT that only 4% of doctors are millionaires.

What is interesting is that JD and MD are roughly the same proportion of the millionaires out there. They both require postcollege education at the similar level of years, would think similar levels of debt, and later years of starting on saving. I would assume though that the median salaries of physicians are considerably higher then for lawyers, no?? So what is the reason that Doctors are not a higher ratio of millinoaires then lawyers? Bad investing? Too much spending?

Good luck.
I don't think the levels of debt are that similar. Supposedly, the average medical school debt was $166,750, according to this article: http://www.cbsnews.com/news/1-million-m ... -a-doctor/. (I am not endorsing that article's conclusions or intimations.) Med school also takes one year longer and requires several more years of lower paying residencies. Anecdotally, I know a lot of med-school students who end up in the $300K debt range.

The data is not as great for lawyers, but the following source suggests that PUBLIC law school students average $75,728 in debt while PRIVATE law school students average $124,950: http://www.usnews.com/education/best-gr ... law-school. I don't know how many students go to public law schools vs. private. But assuming that the averaged debt-load is around $110,000 (just a guess) for law school, that $56,000 difference is a big hurdle early in one's career, especially assuming that most doctors take approximately three or four years longer before they ramp up their pay to any level near average.

This early hurdle may account for some of that difference.
chaz
Posts: 13604
Joined: Tue Feb 27, 2007 2:44 pm

Re: CNBC - 4% doctors are millionaires!!

Post by chaz »

munemaker wrote:I am not a medical doctor either, and I agree it does seem low.

If true, I guess it could be due to the high cost of medical school and malpractice insurance. I imagine most doctors have expensive cars and homes, so they may be paying down debt.
And expensive wives. :)
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
User avatar
Donnie Baseball Fan
Posts: 71
Joined: Fri Aug 28, 2009 1:32 am

Re: CNBC - 4% doctors are millionaires!!

Post by Donnie Baseball Fan »

So 4% doctors are millionaires, but what about fat-free doctors?
freddie
Posts: 920
Joined: Sat Feb 08, 2014 11:06 pm

Re: CNBC - 4% doctors are millionaires!!

Post by freddie »

It doesn't say HAD. It says HAS. Who knows what their income was before retirement (much less how you would measure that. you would need some inflation adjusted sum) is unknown. And getting 150k out of a couple million and SS is a stretch.
bkslainte wrote:I think you can find part of the answer in the previous slide
Three-fourths of America's millionaires are retired, and nearly 60 percent are grandparents with an income of less than $150,000 per year.

Just under a quarter of the millionaires surveyed had a household income of more than $200,000.
According to that survey, 60% of millionaires had incomes of $150,000 or less. I think it has been mentioned on this forum(maybe once or twice :)) but high income doesn't always equal high wealth.
ryk1861
Posts: 70
Joined: Tue Apr 29, 2014 3:41 pm

Re: CNBC - 4% doctors are millionaires!!

Post by ryk1861 »

I am a 48 year old physician, in a historically relatively highly compensated specialty, and had no problem achieving a net worth of greater than $1M by my 40th birthday. Frankly, unless a doc graduates with a lot of debt, this should be easy to do.

My wife and I both share the vision of early retirement from our professions and save and invest with this goal in mind.

I feel somewhat sorry for my colleagues who have loaded up on too much house, car, country club, second home, etc., as, especially as reimbursement plummets, they feel the noose tighten a bit every year.

Yes, far more than 4% of practicing docs are millionaires (if I had to guess, it would be greater than 50% have a net worth north of $1M), but whatever that number is today, it will be smaller in 2024 and even smaller in 2034.
Last edited by ryk1861 on Thu May 08, 2014 3:42 pm, edited 1 time in total.
User avatar
abuss368
Posts: 22978
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: CNBC - 4% doctors are millionaires!!

Post by abuss368 »

That may be. My experience has been that most physicians, while earning a high income, are carrying a high degree of debt. Thus net worth is lower than one may expect.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
LadyGeek
Site Admin
Posts: 68502
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by LadyGeek »

This thread has run its course and is locked (not personal nor actionable). See: A reminder that non-investing general comment threads are OT
- It must be personal. In other words, you must be asking about your own situation. You can also ask on behalf of someone specific, such as a family member.

- It must be actionable. You must be able to do something specific with the replies that will make a difference in your situation.

I also retitled the thread.

See below.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
Posts: 68502
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by LadyGeek »

After receiving a PM, this thread is unlocked. It discusses why physicians aren't millionaires and provides actionable ways to avoid it.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: CNBC - 4% doctors are millionaires!!

Post by sscritic »

Donnie Baseball Fan wrote:So 4% doctors are millionaires, but what about fat-free doctors?
I have a hard time finding 4% doctors. I can find 1% and 2% doctors, but as I understand the US system, even whole doctors are only 3.25%.
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: CNBC - 4% doctors are millionaires!!

Post by sscritic »

nisiprius wrote:I think the chart is saying that only 4% of millionaires are doctors.
Forget the chart, read the words.
Becoming a doctor only worked for 4 percent of millionaires
Notice the placement of the word of. Of doctors and of millionaires are not the same thing.
User avatar
VictoriaF
Posts: 19544
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: CNBC - 4% doctors are millionaires!!

Post by VictoriaF »

sscritic wrote:
nisiprius wrote:I think the chart is saying that only 4% of millionaires are doctors.
Forget the chart, read the words.
Becoming a doctor only worked for 4 percent of millionaires
Notice the placement of the word of. Of doctors and of millionaires are not the same thing.
It's because doctors take the Hippocratic Oath rather than the Plutocratic Oath.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: CNBC - 4% doctors are millionaires!!

Post by sscritic »

sscritic wrote: Forget the chart, read the words.
Becoming a doctor only worked for 4 percent of millionaires
Notice that you have to be a millionaire first. If you are a millionaire and become a doctor, that still only gives you a 4% chance.
Dave1
Posts: 115
Joined: Sun Jan 05, 2014 2:18 pm

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by Dave1 »

chaz wrote:
munemaker wrote:I am not a medical doctor either, and I agree it does seem low.

If true, I guess it could be due to the high cost of medical school and malpractice insurance. I imagine most doctors have expensive cars and homes, so they may be paying down debt.
And expensive wives. :)
And to be fair to the other 50% of doctors... expensive husbands :wink:

All kidding aside, it's not a given that all doctors "must" maintain a certain image. I honestly have to say that most doctors I know don't seem to have a very expensive lifestyle.
User avatar
White Coat Investor
Posts: 15041
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by White Coat Investor »

Thanks Ladygeek! I get to comment now.

First, while the article discusses percentage of millionaires who are doctors rather than doctors who are millionaires (which would be much more interesting) it is also important in any discussion on this topic to define millionaire as either net worth millionaire or income millionaire. If we're talking about income millionaire I would be surprised if the number were even 4%. Those are relatively rare entrepreneurial plastic surgeon/back surgeons/ENTs and docs who also sell design and sell products like orthopedic implants. The average doc only makes something like $200-225K. As far as net worth millionaire, that is a much lower hurdle, but I bet that number isn't any higher than 25% or so. Throw out all the residents (perhaps 10% of docs) and most people in the first third of their careers (another 33% or so). Now, throw out those who don't save much money who will never become millionaires (perhaps 20%). Now throw out those who don't save enough and so don't become millionaires in their second decade of practice (perhaps another 20%) and that leaves 17% of practicing docs who are currently millionaires. It would be higher if you counted retirees.

But the key to getting there (as I write about in my book) is efficiently converting income to wealth by living like a resident for a few years after residency, paying down debt, saving a good chunk (20%+) for retirement, minimizing taxes and investment expenses, and investing in a reasonable manner. 95% of that isn't unique to doctors.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: CNBC - 4% doctors are millionaires!!

Post by letsgobobby »

ryk1861 wrote:I am a 48 year old physician, in a historically relatively highly compensated specialty, and had no problem achieving a net worth of greater than $1M by my 40th birthday. Frankly, unless a doc graduates with a lot of debt, this should be easy to do.
I agree doable but not easy or more docs would have done it. Docs are human after all and after decades of delayed gratification want a little reward. Plus the average debt is now $200k and many don't finish training til their early 30s and may already be raising children by then.

My colleague finished residence at 42, made $200 per year, and had $200k in student loans. Had a young child as well. She may never be a millionaire and she isn't a flashy spender.

What percent of docs were millionaires by 40? I guess less than 10%.
an_asker
Posts: 2958
Joined: Thu Jun 27, 2013 2:15 pm

Re: CNBC - 4% doctors are millionaires!!

Post by an_asker »

sscritic wrote:
sscritic wrote: Forget the chart, read the words.
Becoming a doctor only worked for 4 percent of millionaires
Notice that you have to be a millionaire first. If you are a millionaire and become a doctor, that still only gives you a 4% chance.
Now wait a minute. Does that mean that the other 96 percent of the millionaires tried to become doctors as well, but failed? :oops:
freddie
Posts: 920
Joined: Sat Feb 08, 2014 11:06 pm

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by freddie »

I thought this thread has shown that most doctors are millionaires?

This thread is a good example of how hard it is to read stats and draw conclusions. We have people thinking that only 4% of doctors are millionaires (instead of 4% of millionaires are doctors) AND millionaires only made 150k when working and they saved a lot (instead of most people with more than million dollars are generating less<150k of income off it.).

But the actionable point was clear. Getting old increases your chances of having more money so not dying is one of the keys to acculumating wealth.

LadyGeek wrote:After receiving a PM, this thread is unlocked. It discusses why physicians aren't millionaires and provides actionable ways to avoid it.
an_asker
Posts: 2958
Joined: Thu Jun 27, 2013 2:15 pm

Re: CNBC - 4% of millionaires are doctors!! [Millionaire Sur

Post by an_asker »

freddie wrote:I thought this thread has shown that most doctors are millionaires?

This thread is a good example of how hard it is to read stats and draw conclusions. We have people thinking that only 4% of doctors are millionaires (instead of 4% of millionaires are doctors) AND millionaires only made 150k when working and they saved a lot (instead of most people with more than million dollars are generating less<150k of income off it.).

But the actionable point was clear. Getting old increases your chances of having more money so not dying is one of the keys to acculumating wealth.

LadyGeek wrote:After receiving a PM, this thread is unlocked. It discusses why physicians aren't millionaires and provides actionable ways to avoid it.
True enough. I also thought that LadyGeek had updated the subject to more accurately reflect the study, i.e., "4% of millionaires are doctors" instead of the other way around. I wouldn't have visited the thread had I not gasped at the subject that was so counter-intuitive.
Last edited by an_asker on Fri May 09, 2014 11:20 am, edited 1 time in total.
User avatar
wander
Posts: 3493
Joined: Sat Oct 04, 2008 9:10 am

Re: CNBC - 4% doctors are millionaires!!

Post by wander »

nisiprius wrote:I think the chart is saying that only 4% of millionaires are doctors. That's quite different from saying only 4% of all doctors are millionaires.
+1.
I think you should edit the title of this thread to: Among millionaires, 4% are doctors. :sharebeer
User avatar
meowcat
Posts: 535
Joined: Wed May 09, 2012 5:46 am

Re: CNBC - 4% doctors are millionaires!!

Post by meowcat »

HomerJ wrote:
HardKnocker wrote:You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.
Why do you have to?
Because society says so. Look around you, it's how we are raised. Money is to be spent, plain and simple. If you're a doctor or a lawyer, society has taught us that you must act like one, present yourself like one, and yes, spend like one.
In the "Millionaire Next Door" the authors present a startling fact that plumbers are more likely to become millionaires over doctors and lawyers simply because they're not required to hold onto an "image" of importance.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson
sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: CNBC - 4% doctors are millionaires!!

Post by sscritic »

wander wrote:
nisiprius wrote:I think the chart
I think you should
I think you think he thinks. Now where does that get us?
User avatar
VictoriaF
Posts: 19544
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: CNBC - 4% doctors are millionaires!!

Post by VictoriaF »

an_asker wrote:
sscritic wrote:
sscritic wrote: Forget the chart, read the words.
Becoming a doctor only worked for 4 percent of millionaires
Notice that you have to be a millionaire first. If you are a millionaire and become a doctor, that still only gives you a 4% chance.
Now wait a minute. Does that mean that the other 96 percent of the millionaires tried to become doctors as well, but failed? :oops:
After they failed to become doctors, some became spin doctors and others are doctoring books.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Grt2bOutdoors
Posts: 23200
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: CNBC - 4% doctors are millionaires!! [Millionaire Survey

Post by Grt2bOutdoors »

That's pretty pathetic when you think about it - only 4% of millionaires are doctors. They have the cash flow, the time from leaving residency on+, access to the latest information on cutting-edge technology and drugs (anyone who invested in healthcare companies over the last 30 years has made out like a bandit!!) and a degree where unemployment is virtually unheard of.

I can definitely see why they have a hard time climbing the wall though, among the primary culprits of excessive spending:
1) New expensive luxury vehicles - either leased which is like pouring money out an open window with no hope of recovery or expensive car loans
2) Mcmansion or home that costs far above the median sold in any town with an equally above average mortgage to go with it (think jumbo) because of faulty advice concerning tax deductions
3) Expensive arm candy - a champagne budget is hard to keep up with when all you can afford is cider or beer. :wink: Jewelry and flowers cost $$$$.
4) Expensive vacations and eating at expensive restaurants.
5) Student loans - notice it comes dead last on the list, primarily because it can be eliminated relatively early if you avoid the first 4 items on the list above.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
Posts: 23200
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: CNBC - 4% doctors are millionaires!!

Post by Grt2bOutdoors »

meowcat wrote:
HomerJ wrote:
HardKnocker wrote:You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.
Why do you have to?
Because society says so. Look around you, it's how we are raised. Money is to be spent, plain and simple. If you're a doctor or a lawyer, society has taught us that you must act like one, present yourself like one, and yes, spend like one.
In the "Millionaire Next Door" the authors present a startling fact that plumbers are more likely to become millionaires over doctors and lawyers simply because they're not required to hold onto an "image" of importance.
The plumber in my town charges $120 an hour and has zero regulators/insurance companies breathing down their neck over administrative paperwork. No plumber I know has a malpractice insurance bill, either. The flip side is: they don't show up to work, they don't get paid - simple. There is no disability insurance for being a self-employed plumber, so far as I know. BTW, the plumber in my town is third generation, he was born rich - he owns quite a bit of real estate that was picked up for mere pennies on the dollar. He doesn't need to work, but says "what am I going to do at home all day".
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
User avatar
goodenyou
Posts: 2534
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: CNBC - 4% doctors are millionaires!!

Post by goodenyou »

Grt2bOutdoors wrote:
meowcat wrote:
HomerJ wrote:
HardKnocker wrote:You have to spend like a doctor when you are a doctor. Big house in preferred area, expensive cars, private schools for the kids, country club dues, landscapers, expensive vacations, wife's wardrobe, entertaining expenses, etc.
Why do you have to?
Because society says so. Look around you, it's how we are raised. Money is to be spent, plain and simple. If you're a doctor or a lawyer, society has taught us that you must act like one, present yourself like one, and yes, spend like one.
In the "Millionaire Next Door" the authors present a startling fact that plumbers are more likely to become millionaires over doctors and lawyers simply because they're not required to hold onto an "image" of importance.
The plumber in my town charges $120 an hour and has zero regulators/insurance companies breathing down their neck over administrative paperwork. No plumber I know has a malpractice insurance bill, either. The flip side is: they don't show up to work, they don't get paid - simple. There is no disability insurance for being a self-employed plumber, so far as I know. BTW, the plumber in my town is third generation, he was born rich - he owns quite a bit of real estate that was picked up for mere pennies on the dollar. He doesn't need to work, but says "what am I going to do at home all day".
Doctors still get paid if they don't show up to work?
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
User avatar
goodenyou
Posts: 2534
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: CNBC - 4% doctors are millionaires!!

Post by goodenyou »

new2bogle wrote:
HardKnocker wrote:It's very hard and expensive to become a doctor so I can understand their compensation.
It's hard and expensive for sure, but I don't believe that is the reason for their compensation. The compensation is due to the AMA cartel keeping salaries high by artificially lowering supply.
The AMA has nothing to do with residency programs or salaries. 15% of all the doctors in the US belong to the AMA for the very reason that they don't represent the interests of the doctors. This country would go broke (faster) if we increase the supply of doctors and increase the access to healthcare. That is why insurance plans narrow networks: to decrease access and cost. 8.6% of the healthcare spending is attributable to physician compensation.
Last edited by goodenyou on Fri May 09, 2014 2:01 pm, edited 4 times in total.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
Locked