I am a huge proponent of the FIRE movement, especially for doctors.
For the uninitiated, FIRE stands for “Financial Independence, Retire Early.” However, a lot of physicians I talk to tell me that they are concerned that the growing popularity of FIRE will discourage doctors from practicing medicine.
Is this something that we as a field need to worry about?
We already know that the United States, and world at large, is facing an impending physician shortage. That’s why the White House allocated more resources to training more doctors. This is particularly an issue within primary care specialties like family medicine and pediatrics. But more on this later…
Combined with this impending physician deficit is an ever-growing epidemic of burnout and moral fatigue among doctors.
Doctors across specialties are experiencing this due to a myriad of issues including loss of autonomy, decreasing compensation, increasing administrative responsibilities without clinical impact, and patient mistrust, just to name a few.
Will the FIRE movement become another influence on medicine leading to fewer doctors with more leaving the field as they pursue and achieve financial freedom?
I resoundingly say, “No!”
And here is why…
I just discussed above how burnout and moral injury have become the norm for many, if not a majority, of physicians. I also listed out many of the reasons this is happening in the healthcare field today.
Those are the problems.
That is what discourages doctors from practicing medicine. And FIRE is the cure.
I know this because I have experienced it personally!
Let’s walk through a thought experiment
Imagine your current medical practice. The good and the bad. Are you happy?
If the answer is no, why is that? And why do you stay at that job?
The answer is usually because you need the paycheck from your job. This is true of private practice and employed physicians alike.
Now, imagine that you did not need that paycheck. Imagine that you could work and practice medicine because you want to, not because you need to. How amazing would that be!
You would be empowered to push for changes needed to improve your job satisfaction. Or you could leave altogether if you were not happy.
You would be free to find a way to practice medicine that suits you best. And makes you happy. And guess what?
A happy doctor is a better doctor for her or his patients.
This is the biggest thing that people get wrong with the FIRE movement…
The acronym is all wrong! I look at FIRE more as FIRE. I am pursuing financial independence. But I actually don’t want to retire early. I just started my practice.
But I do know that I will be much happier practicing medicine, and living, on my own terms rather than because I need money to cover my expenses via a paycheck.
Sure, some physicians will pursue financial freedom and ultimately leave medicine when they achieve it. And that is perfectly fine.
However, I really believe that the majority of doctors would elect to continue practicing medicine with their new freedom. And most importantly. I am adamant that a country of financially free doctors could enact positive change on the healthcare system in ways we cannot even imagine.
Here are just a few of the ways that financially free doctors could change healthcare for the better:
- Better patient care as I mentioned above
- More ability to participate in and enact systems level changes
- Take influence back from administrators
- More and better-quality research
- Improve national and international access to patient care
And there are at least 10 more ways!
And this is why FIRE is the cure to the physician shortage and not another contributor to it
Also imagine how many more talented young people would enter the field of medicine if a normative system to eliminate debt and achieve financial freedom was established. As a side note, imagine even more if the debt problem associated with medical school was adequately addressed…
In fact, I would argue that the opening of more medical schools through funding from the executive branch will unfortunately not help the physician shortage as intended. More medical schools operating in the current model will only discourage more doctors from going into the fields needed most, such as primary care and pediatrics.
But again, the prospect of financial freedom would have the opposite effect
And that is why I believe it is so important to teach the simple principles and strategies of personal finance in medical school and residency.
If the larger issues of increasing debt and decreasing compensation are not as imminently solvable, this is an immediate action to help doctors.
It is also very simple to do. All it takes is one interested doctor. It is something that I have begun doing.
That is why I am very adamant that FIRE does not discourage doctors
It is just the opposite.
Remember, doctors did not get into medicine for the money. This is often the reason cited by physicians who ignore their finances to their own detriment. In fact, it was my go-to excuse in the past.
But in reality, it is because we did not get into it for the money that financial freedom is so important.
It allows us too practice medicine without the influence, worry, or thought of money. We can do it purely for the reasons that we wanted to from the start!
And this is very exciting and appealing to me.
So, what can you do if you are looking to start your journey towards financial freedom as a physician?
The most important first steps are to educate yourself, learn how to calculate your net worth, develop a spending and savings plan, and learning the simple way to invest your money.
The beautiful thing about FIRE for physicians is that the formula is quite simple.
If you save at least 20% of your gross income and invest it wisely in passive index funds, you will practice medicine and ultimately retire on your own terms.
And not only will you improve your own financial and overall well-being, but you will inspire others to do the same!
What do you think? Does FIRE discourage doctors from practicing medicine? Can financial freedom be the cure to burnout and moral injury? Let me know in the comments below!
I agree with your opinion on the FIRE movement as financial freedom for doctors will further empower us to take back control of our profession, rather than remaining co-dependent on the large corporations that now control much of the physician labor force.
One critical element of loosening their control of us as a source of medical labor is by engaging in PSA contracts with those corporations as long-term independent contractors rather than employees. I unpack this in my recent blog post https://doctorincorporated.com/employee-or-independent-contractor-doctors-are-long-term-contractor/. I also cover the same in my book coming out in March. http://www.doctorincorporatedthebook.com. By activating our power to be a micro-business and using that as an independent contractor it will benefit us financially through the power of small business and its associated tax savings, as well as empower us emotionally through enhanced professional autonomy.
In the end, to reach financial independence faster it will take a combination of enhanced personal financial habits (which you inspire and inform your readers on) and activation of the professional small business power that is baked into every doctor’s professional degree (which I inspire and inform readers about at doctorincorporated.com).
Both of these elements will lead to doctors reaching Financial Independence (FI)
as well as Retire Early (RE). But retiring really doesn’t necessarily mean we’ll disengage from caring for patients through the use of our professional skills, it simply means we will have the power to autonomously do it outside of the co-dependent reach of the big corporations that want to control us. Some will do this by completely separating from the system, others will do by continuing to use their micro-business to do as both short-term (locums) and long-term (employment lite) independent contractors.
Good post Jordan. I particularly like your breakdown of FI and FIRE.
There is a disincentive for medstudents interested in primary care to pursue it when they borrow same $500k for school as a surgeon would. And, those who attend carribean and DO schools have an even higher likelihood to borrow more and end up in primary care. Maybe its just a decision one has to come to grips with. But, maybe there could be some level of intervention in these schools that could modify the tuition or repayment options in a way that would assist those in lower earning specialites.
If you want financial independence, that there are easier ways than becoming a physician. I notice the medical industry creates more money for others than for physicians. Reps for medical equipment companies do very well. All physicians are ultimately piece workers. It’s important work, but it’s piece work. Also, the price is set by the government for most care episodes. If the main goal is financial independence, spend your 20’s working instead of training.
Who cares. Physicians are 100% free to live their lives according to their desires. Societal needs are not an individual concern. Society has no problem reducing reimbursement or demanding longer hours, more education and greater costly regulation and insurance. When you think you have enough dough, do not hesitate to pull the trigger. All the guilt mongering is nonsense. Sign me 6 years retired, no longer licensed, another year closer to death and happy as a clam.
You’re over-generalizing from a ‘glass half-full’ perspective. While money is likely seldom the sole reason some became physicians, it’s one of the reasons – a fairly secure upper middle or upper class lifestyle without having to be entrepreneurial and lucky has appeal.
The physician workforce will lose some manpower from FIRE types. I’m an example; I qualified for a nice pension, had some investments saved and retired.
Even a financially independent physician may not change the world much. If you’re not an entrepreneurial type, the realities of starting and running a private practice could be horrible. If you don’t do that, you’ll be looking for employed work, whether by joining a group or a salaried position.
The same type of jobs you could get now, when you’re not financially independent. Yeah, you may have more flexibility to quit one job before securing another, and negotiate terms, but locum tenens already do that.
And whether you’re an owner, a partner or an employee, you’ve still got to meet all the regulatory burdens and be competitive as a business against competitors. Unless you operate as a concierge practice to the pay-out-of-pocket wealthy, you’ll still deal with insurance companies. If you want to help the poor, you’ll probably have Medicare and Medicaid to deal with.
And if hard-negotiating physicians rise in numbers to threaten the status quo, expect broader practice authorization for APRNs, Nurse Anesthetists, Physician Assistants, Psychologists, Optometrists and so forth.
I hate to rain on the parade, but the tail does not wag the dog, even if the ‘tail’ is financially independent, and in today’s word, physicians are the tail.
FIRE got into my head with the idea to retire early. I did not like my practice, so the thought of leaving was liberating. And a near death experience sealed the deal. Once retired, I realized my kids were still in school, my wife was still working, my friends were not retired and I had little to do. After a couple years out I tried to get back in and realized that I was essentially considered a felon for the crime of taking a few years off. Keep a foot in is the moral to my story.
Thanks for sharing your story!
Great post. I agree that physicians and healthcare professionals need to continue their education beyond residency and training and expand their education into creating a life they love and work that fuels them rather than depletes them. Saving money and empowering our savings to create passive income is a key to this. Thank you for teaching.
Thanks for your support Brett!
Enjoyed the article. For me personally your premise rings true. Was doing FI before there was ever such a thing as FIRE. Hit my financial independence target 12 years ago, and I’m still practicing because I can and still love taking care of patients, not because I have to. Freedom to work, do Orthopaedic Missions, assist kids and grandkids,…Or, maybe I’m just a workaholic.🤣🛠️
Love this!!
First, I thought I’d leave at the end of the yr. that I turned 66. Then some stuff at the hospital happened and I thought ok, I will leave when I turned 66 (mid year). Then the Chief was leaving at the end of April and I would be stuck with the crazies (I won’t say who) so I left with the Chief. I did work part time for almost 4 years. The hospital then started messing with our malpractice insurance and then cut our salaries. Enough was enough! The rental units that we have has tremendously helped with our retirement. Glad I started early! Oh yes, I started a business during Covid and still working it today.
Thanks for sharing your story! I think you highlight exactly what is so great about financial freedom – the ability to adjust and move on in your own terms!