CNBC - [Among millionaires, 4% are doctors]

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YttriumNitrate
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Re: CNBC - 4% doctors are millionaires!!

Post by YttriumNitrate »

goodenyou wrote:The AMA has nothing to do with residency programs or salaries.
You sure about that?
the AMA along with other industry organizations until recently had issued dire warnings of an impending physician “glut” (whatever that means beyond depressing member wages), even convincing Congress to limit the number of residencies it funds to about 100,000 a year. This imposes a de facto cap on new doctors every year.Forbes
Even the American Medical Association (AMA), the influential lobbying group for physicians, has abandoned its long-standing position that an "oversupply exists or is immediately expected." "The truth is, we don't know if there's a shortage of physicians," says AMA President John Nelson, a Salt Lake City obstetrician. "It looks like there are enough physicians for the short term, but maybe we need more because of the aging population."USA Today
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Re: CNBC - 4% doctors are millionaires!!

Post by goodenyou »

YttriumNitrate wrote:
goodenyou wrote:The AMA has nothing to do with residency programs or salaries.
You sure about that?
the AMA along with other industry organizations until recently had issued dire warnings of an impending physician “glut” (whatever that means beyond depressing member wages), even convincing Congress to limit the number of residencies it funds to about 100,000 a year. This imposes a de facto cap on new doctors every year.Forbes
Even the American Medical Association (AMA), the influential lobbying group for physicians, has abandoned its long-standing position that an "oversupply exists or is immediately expected." "The truth is, we don't know if there's a shortage of physicians," says AMA President John Nelson, a Salt Lake City obstetrician. "It looks like there are enough physicians for the short term, but maybe we need more because of the aging population."USA Today

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Random Musings
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Re: CNBC - 4% doctors are millionaires!!

Post by Random Musings »

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.
Interesting that number of millionaires is up about 400,000 households, but number of $500K net worth households is down 400,000. I guess the rising tide isn't lifting all boats.

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goodenyou
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Re: CNBC - 4% doctors are millionaires!!

Post by goodenyou »

Random Musings wrote:
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.
Interesting that number of millionaires is up about 400,000 households, but number of $500K net worth households is down 400,000. I guess the rising tide isn't lifting all boats.

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

Post by SGM »

My suggestion for becoming a millionaire:
Stay off drugs and tobacco
Drink only in moderation
Stay out of jail
Keep investment costs low
Keep your taxes low when possible
Save as much as you can
Stay healthy
Keep your sunny side up
Enjoy the simple pleasures
Be thankful for what you have
Work hard at something you like
Find a reasonable paying occupation
Don't spend on status symbols
Don't panic when the market takes a dive

Obviously the title of the thread is backwards.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by LadyGeek »

By popular demand, I retitled the thread.

Please stay focused to help physicians.
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mickeyd
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by mickeyd »

This is not surprising. Most of us have read The Millionaire Next Door which reflects the investment habits of many DIY investors... like us.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by obgyn65 »

I guess I became a millionaire around the age of 40. Not many students debts since I completed most of my studies in Europe. Always been frugal. One of my closest colleagues is in her 50s, but she has a huge house, maintains horses for her kids and goes on vacation every few weeks. I have no idea what her net worth is like....
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Re: CNBC - 4% doctors are millionaires!!

Post by cowboysFan »

letsgobobby wrote: 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.
Your friend is abnormal. 42 is old to be finishing residency. If it takes you a decade after undergrad to find yourself and decide you want to be a doctor, then obviously the ROI is going to be less.
Kircheis
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Kircheis »

Grt2bOutdoors wrote: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 .
To be fair, many doctors in academic practice may not be investing in healthcare and/or drug companies due to conflict of interest. I know financially it may not have been wise, but I have decided not to have any sstock in healthcare/medical companies to avoid the appearance of conflict of interest. My workplace has me keep an up-to-date financial disclosure regarding any investments I have. I also have to disclose any conflicts when I give presentations. I decided that it wasn't worth it...

I also think there is t least one other reason why doctors have a hard time accumulating wealth. Both several friends I know and I help out families (parents, siblings) financially (in fact this is mentioned in the Millionaire Next Door). I suspect that a good portion of doctors get asked to help out their families with money.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by HIinvestor »

It is unclear to me exactly what this survey is measuring and what valid takeaways there can be gleaned from it. If it's all about net worth, folks can have relatively high net worth and be cash poor, especially if you have equity in expensive real estate in HI, CA, and many other areas. If you include the current SPIA of folks with pensions, many folks with DB pensions have a nice net worth.

When folks own and run businesses, including medical or law practices and don't pay invest sufficiently in a low expense pension fund that gets good returns, it is tougher to have net worth grow as quickly, especially with high overhead like electronic records and other expenses.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by ks289 »

This particular study was defining millionaire status as having $1,000,000 in investable assets - not by net worth.
This of course takes longer to achieve and requires a higher level of net savings and/or returns.
Doctors (or any household) making $200,000 annually in high cost of living areas may need decades to accumulate this level of wealth. Are doctors more likely to fare poorly on this journey? Perhaps. Need more people like whitecoatinvestor out there educating folks.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by SGM »

I finished my residency at very late age. I will shortly retire. I did not "find myself." I have always done just whatever I pleased and never followed the crowd. I just love new challenges and experiences. I have always enjoyed the several careers I had. I had good savings habits and was a low cost investor for 20 years before med school and was lucky as markets including home values all did well.

I have found that many fellow physicians are stone deaf when it comes to low cost investing. Many pay extravagant fees for advisors and have no interest in handling their own investments. Maybe they have too many bills to invest much of their income or they work so many hours they leave the investing to professionals. Several are always looking for the next drug blockbuster investment and think they have specialized knowledge. One who is my age and has been a physician for close to 40 years may never afford the retirement he wants. He has the riskiest portfolio I have ever seen.

We stopped buying used park department cars after I completed my residency. However the new vehicles we bought were not expensive and we kept them a long time. We lived with family for the first year of medical school, but that was too difficult. As the folk song goes... after you have been eating steak a long time... beans, beans,.... they taste just fine.

I started my own business an S corp in short order. I maxed it out the 401k yearly and nearly maxed out the profit sharing component. I also worked in a low cost environment. My office space was essentially free at one location, thanks to a grateful public. At one time I worked at 3 locations, one as a part time employee, a second as a contractor, a third as an independent physician. I believe I considerably out earned my colleagues by having lower expenses. I quit the one job as an employee when the physician owner said " I am paying you more than my brother." I don't take salary reductions ever. I only worked there for the variety.

I used as much low cost continuing medical education as I could. This included hospital grand rounds, qualified meetings, the Medical Letter, and professional society monthly mail in quizzes (now on the internet). I self prepared for board exams. I took my first board course last year as I felt I could not as easily sit down and study without it. By my reckoning, it was an inordinately large cost considering I would retire within a year of passing the exam again. I did my own billing for a while. I also had the opportunity to employ spouse and children part time.

I have read James Dahle's book the White Coat Investor more out of curiosity as I am at the end of my career and I buy the books of author's that I feel have a mission I agree with. He confirms a lot of what I have already done and writes well. I also think he has a good web site and have recommended it to other physicians. I have loaned my copy of his book to a young nurse practitioner.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Jim85 »

I have to say that these types of articles, charts, etc. are very annoying in how misleading they are. The data is frequently portrayed backwards. Instead of 87% of millionaires have a degree, the real number to consider is what percentage of those with a degree are millionaires for example compared to the percentage of people without a degree that are millionaires. I see these kind of backward statistics constantly on all kinds of topics. Although not true, how misleading would that chart be if 100% of doctors were millionaires? It could still be true that 4% of millionaires were doctors. I used to be involved in product liability litigation and it was amazing how data would be presented to the court. Totally accurate statistics could be shown that were intended to be completely misleading. "Figures don't lie, liars figure."
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by fasteddie911 »

Having grown up around physicians and having many friends whose parents were physicians, I can see how there aren't as many physician millionaires as one would think. These physicians tend to live very comfortably, sending multiple kids to private colleges, driving moderately new and/or fancy cars, living in nice neighborhoods, etc. They've worked long and hard to be able to make the kind of money that will give them and their family a comfortable lifestyle, delaying gratification through their 20's while everyone else around them was making more money, buying homes, etc. Also, most of these physicians I know came from less privileged backgrounds, so I can see why they try to spend more to give they're families a better life than they had. Who's to say that they even want to save hard and retire anyways? I know of many physicians who continue to practice well into their retirement years because they enjoy it and/or have spent so much of their life invested in the field that it's difficult to turn away from it and their patients. I do notice, though, that the doctors that are the most well off tend to be the specialists without kids or a spouse.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by The Wizard »

I'm not sure there's a real problem here, aside from mangled statistics.
Of Americans age 30 and over, are 1% of them MD/ODs?
So then of millonaires, doctors are somewhat over-represented?
That hardly tells us anything.

My brother, age 61, has been an MD for a few decades. While he may not retire at 63 like I (an engineer) did, I think he's quite OK money-wise, probably more OK than me. :)

I am reasonably sure that if a survey of all MD/ODs age 55 was taken that the results would show significant Net Worth and Investable Assets for 90% of them. The "problem" for some of these doctors is simply that their lifestyle expenses (excluding professional expenses) are way higher than average and thus will require a larger Nest Egg to maintain in retirement.
I would ASSUME that most doctors have that Nest Egg in decent shape by age 55, unless they have spendaholic or substance abuse issues. Am I way off the mark with all this?
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bmac »

It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.

I can't speak for the rest of the country, but in the Northwest it doesn't seem like many of my fellow MDs are living particularly extravagant lifestyles. There are as many, if not more, Hondas, Subarus and Toyotas as Mercedes, BMWs and Infinitis in our hospital parking lot. Fleece, khaki and Docker's are much more prevalent than suit and tie. Perhaps it is different elsewhere, but it doesn't seem like the historical perception of the flashy status-oriented physician rings true with the current generation of MDs that I know and work with.

Can you make a lot of money as an MD? Sure. Might you be saddled with great debt? Sure. These are true for other professions. I don't think the information in this survey can tell us whether or not one is more or less likely to become a millionaire based on one's degree/profession.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by VictoriaF »

Bmac wrote:It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.
The income and credentials of MDs are more uniform than those of MBAs. At work we have some administrative assistants who hold MBA from correspondence-type universities.

Victoria
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Valuethinker »

VictoriaF wrote:
Bmac wrote:It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.
The income and credentials of MDs are more uniform than those of MBAs. At work we have some administrative assistants who hold MBA from correspondence-type universities.

Victoria
To treat people in a hospital or clinic I am required to have an MD and years of training.

To run a business, or trade stocks, I don't need an MBA. An MBA is a sometimes useful credential to have (some jobs, mostly in finance, everyone seems to have an MBA) but it's not required, AFAIK, to perform any job.

Thus an MBA is not an entry into a restricted profession the way an MD or a JD/ LLB is.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by VictoriaF »

Valuethinker wrote:
VictoriaF wrote:
Bmac wrote:It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.
The income and credentials of MDs are more uniform than those of MBAs. At work we have some administrative assistants who hold MBA from correspondence-type universities.

Victoria
To treat people in a hospital or clinic I am required to have an MD and years of training.

To run a business, or trade stocks, I don't need an MBA. An MBA is a sometimes useful credential to have (some jobs, mostly in finance, everyone seems to have an MBA) but it's not required, AFAIK, to perform any job.

Thus an MBA is not an entry into a restricted profession the way an MD or a JD/ LLB is.
We are in agreement. I was responding to the hypothetical statement "7 times as many MBA millionaires as MD millionaires."

Victoria
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by bogleblitz »

"20% of all sick days are on Friday" from a Dilbert comic article, is the first thing I thought of when I read this title.

I'm not surprised at all. Maybe because I already read the book Millionaire next door.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bmac »

VictoriaF wrote:
Valuethinker wrote:
VictoriaF wrote:
Bmac wrote:It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.
The income and credentials of MDs are more uniform than those of MBAs. At work we have some administrative assistants who hold MBA from correspondence-type universities.

Victoria
To treat people in a hospital or clinic I am required to have an MD and years of training.

To run a business, or trade stocks, I don't need an MBA. An MBA is a sometimes useful credential to have (some jobs, mostly in finance, everyone seems to have an MBA) but it's not required, AFAIK, to perform any job.

Thus an MBA is not an entry into a restricted profession the way an MD or a JD/ LLB is.
We are in agreement. I was responding to the hypothetical statement "7 times as many MBA millionaires as MD millionaires."

Victoria
My intention is to point out that I don't think the data presented in the survey is particularly meaningful or useful in a vacuum. I have know idea whether MDs, JDs, PhDs, MBAs, E.E.s or other professions/occupations are over or under represented within the population of US millionaires. And I don't think the cited survey is particularly illuminating either. :happy
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by VictoriaF »

Bmac wrote:
VictoriaF wrote:
Valuethinker wrote:
VictoriaF wrote:
Bmac wrote:It seems that statistics like these without context are useless. According to a quick Google search, there are roughly 22,500 MD/DO graduates per year, 156,000 MBA graduates per year and 44,000 JD graduates per year. According to this "survey," 4% of millionaires have MDs, 11% of millionaires have MBAs, and 6% of millionaires have JDs. So if simply extrapolating from annual degree output, if the rate of becoming a millionaire were equal amongst these degrees, shouldn't there be twice as many JD millionaires as MD millionaires and 7 times as many MBA millionaires as MD millionaires instead of only 50% more JDs as MDs and under 3 times as many MBAs as MDs? I don't know and I don't think you can really make many claims based on the survey data that MDs are over or under represented as millionaires compared to other occupations.
The income and credentials of MDs are more uniform than those of MBAs. At work we have some administrative assistants who hold MBA from correspondence-type universities.

Victoria
To treat people in a hospital or clinic I am required to have an MD and years of training.

To run a business, or trade stocks, I don't need an MBA. An MBA is a sometimes useful credential to have (some jobs, mostly in finance, everyone seems to have an MBA) but it's not required, AFAIK, to perform any job.

Thus an MBA is not an entry into a restricted profession the way an MD or a JD/ LLB is.
We are in agreement. I was responding to the hypothetical statement "7 times as many MBA millionaires as MD millionaires."

Victoria
My intention is to point out that I don't think the data presented in the survey is particularly meaningful or useful in a vacuum. I have know idea whether MDs, JDs, PhDs, MBAs, E.E.s or other professions/occupations are over or under represented within the population of US millionaires. And I don't think the cited survey is particularly illuminating either. :happy
We are in agreement, too {happy},

Victoria
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bmac »

Of course this report I ran across certainly would lend credence to the perception that MDs are under-represented amongst millionaires considering their income level which seems to be the point originally being made by the OP based on the cited survey:
http://www.medscape.com/viewarticle/824238_1

I'm just glad I continued to "live like a resident" long after I became an attending (and long before there was a "White Coat Investor") and stumbled upon The Vanguard Diehards Forum early in my career . . .
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by amitb00 »

When we count worth of doctors, we may want to discount folks in residency & fellowship and first five years of practice/job. We know that this group is not making doctor salary , is paying off debt and is bringing down the average. If there are lot more wealthy doctors after discounting folks in first few years of profession, this is a great career financially speaking.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by FedGuy »

amitb00 wrote:We know that this group is not making doctor salary
Yes, they are. It's just that "doctor salary" is this weird thing that starts out really low, stays low for a few years, and then increases significantly.

If you're going to discount those people, it's only fair to do something similar for other professions. So, for lawyers, ignore everyone who isn't a partner at a major law firm. Some might say that everyone else isn't making a "lawyer salary."
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by amitb00 »

I agree with you that it is how doctor's salary go. However there is a subtle difference. For instance in case of lawyers, you don't know how many years it will take to be a partner or if one will become a partner. For doctor residency and fellowship years are known (depending on speciality) and then income shoots up. You may considr these years as trai ing years. So at least discount redidency snd felloship if not first fee years of practice.It is just bringing average down by counting training years which r long.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by goodenyou »

1 in 25 households in America are millionaires or more. The average income of millionaires is the USA is $247,000. Across all specialties, physicians see roughly 13 patients per day, work 52 hours per week and earn an average of $270,000. The vast majority of doctors are not surgical subspecialists and many earn less that $200,000 per year. These numbers for physicians is not surprising. 50% of physicians are 50+ years old and have practiced for 20+ years. The number of wealthy physicians will continue to fall yearly.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Gleevec »

NYGiantsFan wrote:[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.
"Becoming a doctor only worked for 4 percent of millionaires".

Like a few others have alluded to, while the rest of the thread has ignored this, this is looking at a survey of millionaires. Of which 4% were doctors.

Not surprised there are more JD and MBA millionaires, because there are a lot more JD and MBAs. Just like the #1 factor was being a college grad.

Based on this, you could also make a headline "Becoming Warren Buffet or Bill Gates only worked for 0.1% of millionaires"

This survey is actually useless, because it is not saying what you think it is saying, which is only 4% of doctors are millionaires. It is saying of millionaires, only 4% are doctors. This should be not be surprising, as there are way more 1) college grads 2) MBAs 3) JDs than doctors.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bracket »

Regardless of what this survey does or does not prove, I think it is true that fewer doctors become millionaires than could, or perhaps should, given their income. Even with debt and not finishing residency until say age 30, that leaves 30 or so years of earning a 6 figure salary even in traditionally "low paying specialties" like say peds or psychiatry. So why is this the case?

As a physician who will probably enter that 4% club in the near future, my opinion is that many physicians know essentially nothing about investments, finance, retirement savings, etc. On such matters I am an idiot when compared to many of the well known posters on this site, but I am an absolute genius when compared to 99% of the other physicians I know, and I know quite a few. In fact I do not personally know a single other physician who has not or does not try to make money via stock picking, market timing, or expensive advisors. (I did recently however convince a physician friend to stop paying an advisor to buy Apple in her IRA, and instead move everything to vanguard, and recommend she read all the usual books and websites, so there is hope)

Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.

So I guess this just means that physicians are not necessarily any more knowledgable or wise with money than anyone else, they just happen to make a decent amount of it.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by ryk1861 »

Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.
It's interesting, but in my hospital parking lot, I see the neurosurgeons get into their cars on a regular basis--their VWs, Hondas, Volvos, Fords, and one guy splurged and drives an Acura. They are a pretty young group, median age in the 45-50 range. I am wondering if the luxury car MD status symbol might be a thing of the past.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by anil686 »

ryk1861 wrote:
Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.
It's interesting, but in my hospital parking lot, I see the neurosurgeons get into their cars on a regular basis--their VWs, Hondas, Volvos, Fords, and one guy splurged and drives an Acura. They are a pretty young group, median age in the 45-50 range. I am wondering if the luxury car MD status symbol might be a thing of the past.

At my hospitals too - almost every physician under 45 seems to have a modest automobile. The ones who have the expensive luxury cars seem to be the older physicians who probably had less debt out of school and less reimbursement pressure in the past.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Sheepdog »

Maybe they just have to live longer. It took me until I was almost 80 to reach $1Mil. Hang in there.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by White Coat Investor »

ryk1861 wrote:
Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.
It's interesting, but in my hospital parking lot, I see the neurosurgeons get into their cars on a regular basis--their VWs, Hondas, Volvos, Fords, and one guy splurged and drives an Acura. They are a pretty young group, median age in the 45-50 range. I am wondering if the luxury car MD status symbol might be a thing of the past.
None of my partners, from one year out of residency to 30 years out, drives a luxury car. Many of the nurses do though...
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bmac »

EmergDoc wrote:
ryk1861 wrote:
Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.
It's interesting, but in my hospital parking lot, I see the neurosurgeons get into their cars on a regular basis--their VWs, Hondas, Volvos, Fords, and one guy splurged and drives an Acura. They are a pretty young group, median age in the 45-50 range. I am wondering if the luxury car MD status symbol might be a thing of the past.
None of my partners, from one year out of residency to 30 years out, drives a luxury car. Many of the nurses do though...
I wonder if this is geographical. My experience in the Pacific Northwest is similar to EmergDocs in Utah regarding MD cars. Not a lot if $100 k cars in the parking lot. Also, I distinctly recall in the early to mid 2000s thinking it odd that i was driving a Honda but there were scrub nurses driving Beemers. We know what happened after that.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by ajcp »

Bracket wrote:Regardless of what this survey does or does not prove, I think it is true that fewer people become millionaires than could, or perhaps should, given their income.

As a physician who will probably enter that 4% club in the near future, my opinion is that many people know essentially nothing about investments, finance, retirement savings, etc.
FTFY :wink:
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Rafferty »

there are no 100k cars in the doctors lot where i walk by every day - at least in the last 5 years. There are a lot of SUVs like explorers, lexus rx, acura mdx etc. I have seen, on rare occasion, a BMW 5 series/ e class benz and a few boxsters. At another hospital I consult with, the lot has plenty of hondas and toyotas and BMW 3 series in the MD parking.

Seems like most docs are not consuming at these 2 places on cars.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by ryk1861 »

EmergDoc wrote:
ryk1861 wrote:
Also, as already alluded to above, the doctors' lot at my hospital is full of $100,000 cars, far more than there are elite neurosurgeons operating inside, so clearly spending wisely is not always a top priority.
It's interesting, but in my hospital parking lot, I see the neurosurgeons get into their cars on a regular basis--their VWs, Hondas, Volvos, Fords, and one guy splurged and drives an Acura. They are a pretty young group, median age in the 45-50 range. I am wondering if the luxury car MD status symbol might be a thing of the past.
None of my partners, from one year out of residency to 30 years out, drives a luxury car. Many of the nurses do though...
Also, the pharmaceutical and device reps seem to all drive BMWs. Perhaps it's a sampling error as I do not have the privilege of meeting with them much. ;)
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Five Scoop »

The direction this thread has headed has steered away from the article cited. In doing so, I think it continues to show that there is a misconception about physicians and spending/saving habits. I believe it is widely stated on this forum, on blogs, in the media, and by a lot of financial advisors that physicians are idiots when it comes to managing money.

The question is this - where are the stats to back up this sentiment?

I think there is the same mentality from non-physicians that people apply to professional athletes. In that, you periodically see stories where pro athletes are bankrupt and assume that all pro athletes spend frivously.

EmergDoc stated in this thread "that leaves 17% of practicing docs who are currently millionaires." Curiously, his own blog post from November 2011 cites a study where 46% of the physicians were millionaires. http://whitecoatinvestor.com/the-physic ... ?print=pdf

So, we have non-physicians making statements to the effect that physicians are poor money managers and we also have some physicians who make these same claims. But, there does not seem to be much to back up these claims.

I think it helps to propagate this notion about poor money management because there are definitely niche financial advisors that "specialize" in dealing with physicians, but I would ask someone to point me to specific data that shows that physicians, on average, do not save enough money for retirement or, are, in general, poor managers of their own finances (i.e. do physicians declare bankruptcy more than other lucrative professions?)
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by Bracket »

Five Scoop wrote:The direction this thread has headed has steered away from the article cited. In doing so, I think it continues to show that there is a misconception about physicians and spending/saving habits. I believe it is widely stated on this forum, on blogs, in the media, and by a lot of financial advisors that physicians are idiots when it comes to managing money.

The question is this - where are the stats to back up this sentiment?

I think there is the same mentality from non-physicians that people apply to professional athletes. In that, you periodically see stories where pro athletes are bankrupt and assume that all pro athletes spend frivously.

EmergDoc stated in this thread "that leaves 17% of practicing docs who are currently millionaires." Curiously, his own blog post from November 2011 cites a study where 46% of the physicians were millionaires. http://whitecoatinvestor.com/the-physic ... ?print=pdf

So, we have non-physicians making statements to the effect that physicians are poor money managers and we also have some physicians who make these same claims. But, there does not seem to be much to back up these claims.

I think it helps to propagate this notion about poor money management because there are definitely niche financial advisors that "specialize" in dealing with physicians, but I would ask someone to point me to specific data that shows that physicians, on average, do not save enough money for retirement or, are, in general, poor managers of their own finances (i.e. do physicians declare bankruptcy more than other lucrative professions?)
You make a good point. My belief that many physicians do not manage their money wisely is based entirely on my own admittedly anecdotal experience. If I had any real data I'd share it, but I don't. Perhaps others can enlighten. But again, judging by all the Mercedes S classes in our doctors lot and all the Edward Jones clients I know I still say many physicians do get taken for a ride.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by freddie »

I am sure many physicians do not manage their money wisely. But I can say pretty much the same thing about any group of people.
Bracket wrote:
You make a good point. My belief that many physicians do not manage their money wisely is based entirely on my own admittedly anecdotal experience. If I had any real data I'd share it, but I don't. Perhaps others can enlighten. But again, judging by all the Mercedes S classes in our doctors lot and all the Edward Jones clients I know I still say many physicians do get taken for a ride.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by White Coat Investor »

Five Scoop wrote:
EmergDoc stated in this thread "that leaves 17% of practicing docs who are currently millionaires." Curiously, his own blog post from November 2011 cites a study where 46% of the physicians were millionaires. http://whitecoatinvestor.com/the-physic ... le-part-2/

So, we have non-physicians making statements to the effect that physicians are poor money managers and we also have some physicians who make these same claims. But, there does not seem to be much to back up these claims.

I think it helps to propagate this notion about poor money management because there are definitely niche financial advisors that "specialize" in dealing with physicians, but I would ask someone to point me to specific data that shows that physicians, on average, do not save enough money for retirement or, are, in general, poor managers of their own finances (i.e. do physicians declare bankruptcy more than other lucrative professions?)
Ouch. That's not curious at all. That survey definitely states that 46% are millionaires, which still seems quite high to me, but it is what it is. Of course, it also says that the average doc in his 50s and 60s has a net worth of something like $1.4M, $500K of which is net worth in his home. That's not exactly impressive after 20-40 years of $200K+ salary. I know what Stanley and Danko would have to say about that.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by The Wizard »

I postulate that ALL MDs age 55 and older have >$1M net worth. This includes $300K of home equity and $700K of investments, tax sheltered or otherwise.
Or some other combination that adds up to >$1M.
I'm talking about age 55, not age 30 when a newly minted MD is still in debt.
If anyone disagrees with me, then present your personal evidence to the contrary...
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by goodenyou »

The Wizard wrote:I postulate that ALL MDs age 55 and older have >$1M net worth. This includes $300K of home equity and $700K of investments, tax sheltered or otherwise.
Or some other combination that adds up to >$1M.
I'm talking about age 55, not age 30 when a newly minted MD is still in debt.
If anyone disagrees with me, then present your personal evidence to the contrary...
Yes, those are my "Rich Doctor Friends". Reimbursements rates (inflation adjusted) have dropped as much as 68% over the past 22 years. I like your confidence in your postulate. You are The Wizard. Why would we NOT want our doctors to be millionaires? Or should it be left to NBA or NFL players, actors, and managers of financial institutions? I often ask, who should make more than doctors? I usually get a blank stare at that question. I am always amazed at the level of ignorance as to how a doctor is paid, or how much a doctor makes for a complex life-saving surgical procedure. People do know, however, that a Slip-and Fall lawyer could make thousand times as much if the patient dies or is injured than the doctor will ever make for keeping the patient alive. BTW, I know a 55 year old broke, divorced twice doctor that is flat broke. So, not every MD over 55 has >$1M net worth. In addition, one of my partners committed suicide at 65 years old with a gun shot to his head. He died hundreds of thousands in debt and even owed his mother money when he killed himself. It is not all rosy. Trust me. I have more personal evidence of tragic (financial) doctor stories. I could go on and on and on.....
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by kmurp »

That's an awful story (above). In my practice, all physicians in their 50's or above have over 1 million in their retirement account. I don't know how much additional they have outside our retirement accounts, but it's significant. Our group has always put the maximum yearly amount in tax deferred and it does add up. That said, we allow people to do what they want with their retirement investments and many years ago, some (now retired guys ) lost money in some sort of limited partnership investment thing. They only fancy car is driven by a 65 year old partner who could retire but doesn't want to.
Personally,I don't have the amount I should beacause
1. I didn't save well outside of the retirement account
2. I was very conservatively invested in the 90s
3. I was NOT conservatively invested in 2000
4 That experience scarred me such that I was once again too conservative over the last 14 years
That said, I'm still in the "club" at age 56. I hope to go part time in five years, but with low interest rates and rather high equity valuations, who knows.
One more thing, what doctors make in my specialty is highly influenced by where one works. My location in NY, has seen a huge increase in Medicaid, especially this year. Medicaid pays very very poorly (for the US), akin to payment in Europe, so we have seen and will continue to see great pressure on out revenue with few options to compensate. We will probably compensate be replacing retiring doctors with nurses.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by goodenyou »

One more thing, what doctors make in my specialty is highly influenced by where one works. My location in NY, has seen a huge increase in Medicaid, especially this year. Medicaid pays very very poorly (for the US), akin to payment in Europe, so we have seen and will continue to see great pressure on out revenue with few options to compensate. We will probably compensate be replacing retiring doctors with nurses.
If only we could put nurses in the operating room to do surgery, we would do the same.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by White Coat Investor »

The Wizard wrote:I postulate that ALL MDs age 55 and older have >$1M net worth. This includes $300K of home equity and $700K of investments, tax sheltered or otherwise.
Or some other combination that adds up to >$1M.
I'm talking about age 55, not age 30 when a newly minted MD is still in debt.
If anyone disagrees with me, then present your personal evidence to the contrary...
Nope. While it would be inappropriate for me to reproduce emails I have received here, I assure you there are many physicians 55 and older who have a net worth under $1 Million. I saw a 58 year old family practitioners with a $200K net worth recently. I don't know the percentages, but it wouldn't surprise me if maybe 40% of docs 55 and older had less than $1 Million.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by HomerJ »

bogleblitz wrote:"20% of all sick days are on Friday" from a Dilbert comic article, is the first thing I thought of when I read this title.

I'm not surprised at all. Maybe because I already read the book Millionaire next door.
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Re: CNBC - 4% doctors are millionaires!!

Post by JonnyDVM »

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?
Societal expectations that you are a rich doctor. There's a lot a pressure when your friends are all buying huge houses and taking three week trips to Bali. You worked very hard to get where you are and there's a sense of "I've earned it". Few can resist the temptation. We have friends that are recent attending physicians whose debt acquisition has clearly been spiraling out of control. We are working on paying off debt first but we still gave into temptation a little and got my wife a nice car.
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Re: CNBC - [Among millionaires, 4% are doctors]

Post by kafshar1 »

This may have already been mentioned but I didn't read all the replies. I don't think many people in the public understand what post-graduate medical training actually entails. I graduated medical school at age 27 with $220,000 in debt. I then did a three year internal medicine residency earning $41K, $43K, $46 each year, respectively. I then a chief year in internal medicine. I followed that with 4 years of cardiology fellowship earning early on average $50k per year. I then did an advanced fellowship for 1 year to sub specialize within cardiology with a salary of $59k. I am now 36 years old and my friends who graduated law school at age 24 or 25 with $120,000 in debt (from similar caliber law schools as the medical school I went to) have been earning on average $180,000+ per year for 12 years while I averaged about $50k. Some are even partners making way more than I will ever come close to. My starting salary next year is less than my lawyer college friends and they are about a million dollars ahead of me with equity in a house and much more socked a way in retirement.

So, I don't think it is possible to compare doctors and lawyers....the post-graduate medical education (internship, residency, fellowship, advanced fellowship, Master's in Public Health...etc..etc) is not comparable.

As mentioned by someone else before... I too am not complaining...there isn't another profession I would rather do; but just want to make sure we aren't attributing the fact that doctors aren't millionaires because they all need to be driving BMWs. Some of us are 40 before we can even buy our first new car.
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