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Is There Such a Thing as a Poor Physician?

A while back, I got to cross an item off of my personal finance bucket list. To be fair, I just got into this game recently but this definitely was a bucket list item. I was a guest on the Docs Outside The Box podcast with Dr. Nii Darko. This is an awesome podcast that I always listen to so to be a guest was really cool and surreal. Anyway, this is what Nii asked me at some point, “Is there such a thing as a poor plastic surgeon?” Put another way, “Is there such a thing as a poor physician?”

That’s a very valid question!

poor physician
Addressing the elephant in the room…

And honestly, this was something that I struggled with before I began my financial education and journey to financial well-being.

Related Post:
My Comeback Story…

I was about to graduate from training and start making an attending salary. However, I had >$500,000 in debt, had no concept of a savings rate, was too intimidated, nervous, and clueless to invest my money, and was burned out.

I felt like a poor physician; a poor plastic surgeon to boot!

Unfortunately, there is such a thing as a poor physician

This is the cold and unfortunate truth.

Income has nothing to do with how poor or rich/wealthy you are. In fact, your income is not even a factor in calculating your net worth. This is such a common misconception for physicians. We often realize the difference when it is too late.

The formula to build wealth is simple as a doctor.

  • Save at least 20% of your income
  • Set your asset allocation
  • Invest in low cost, broadly diversified index funds
  • Rebalance your asset allocation once a year
  • Retire on your terms in 20-30 years

If you’re not sure how to do them, just read through my blog or sign up for my course. I’ll teach you. Trust me, if I can do it, anyone can!

Related Posts:
10 Steps to Financial Freedom for Young Attending Physicians
The 7 Step Basic Formula for Wealth as a Physician
7 Financial Habits of Highly Successful Physicians
What Do You Need to Include in Your Savings Rate?
How to Make and Save Money as a Resident Physician
What You Need to Know About Assets and Liabilities
How to Have Success Becoming an Attending Physician
Finance Flash Go! Episode #6: Active vs. Passive Stock Investing

That’s really it. And those steps aren’t hard. You can even use this free calculator to determine your own path to financial freedom!

And yes, this goes for plastic surgeons too!

Physicians are high income earners.

Plastic surgeons though are high income earners among physicians.

So, I often am asked in one way or another if this advice really applies to high income physicians. And the answer is s simple yes.

I unfortunately know many plastic surgeon and other very high income physicians working because they have to, not because they want to any more. They live pay check to pay check. In turn, many lower income physicians are much happier and financial well than them despite the negative income gap.

How did they end up like this? Because they didn’t follow the simple rules!

That’s why I wanted to highlight this podcast episode!

This was one of my favorite guest podcast spots so far. Nii is incredibly real in his delivery and content which I appreciate and try to emulate.

Full episode featured here

We discuss all the challenges inherent in being a physician and trying to build wealth.

We also talk about how you can take the simple steps necessary to do this very successfully.

And, as a bonus, we also talk about what it has been like to be the newcomer to the physician finance space, including all the positives and negatives!

Here is how Nii described our episode:

“A newcomer to the Doctor personal finance world joins me on the show today. Dr. Jordan Frey, a.k.a. The Prudent Plastic Surgeon, is trying to break the stereotype of the typical plastic surgeon. When he finished all of his training, he found himself in over $400k of student loan debt. His blog chronicles his journey from knowing nothing to actively paying off his debt, investing in the stock market and real estate. Dr. Jordan is pretty open about his experience, he even shares his net worth statements with readers.

On today’s show, Dr. Jordan will share with us the basics of investing and how you can start investing today!”

So, check out the full episode of Docs Outside The Box here!

What do you think? Can a physician be poor? How can physicians as a group get better at personal finance? What challenges do you see?

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

    14 thoughts on “Is There Such a Thing as a Poor Physician?”

    1. Recently discovered your blog and it’s been great so far. I appreciate the simplicity of your approach to financial well-being. Looking forward to your future posts!

    2. yeah dude definitely agree with you physicians can be poor. I think what would help is to tell people this, med students and the general public (who likely won’t believe it). Also, making sure med students know that not learning personal finance will lead them to be a worse doctor. I myself had the misconception that time away from learning medicine by learning about finances would make me a worse doctor. Unfortunately the laser focus that makes us successful as doctors keeps us financially literate, and we don’t link crappy at personal finance=crappy doctor.

    3. Let me tell you why you’re a poor plastic surgeon: Besides the college debt followed by wasting your residency salary on non-essentials, you buy an expensive house & rent an expensive office at the beginning of practice. You follow this with a huge waste of financial commitment to advertising, an animal which constantly requires continual feeding, create an expensive website that needs continual monitoring, hire too many employees for your fancy cosmetic practice to be and purchase a bunch of expensive laser machines etc. along with the spa you have built into your office. And if you’re not permanently broke yet, you then invest in any number of “no brainer deals” or oil wells which stop producing the day you buy-in. That my friend is why you are and will continue to be poor.
      When you then attempt to extract yourself from this hole, you generate unnecessary surgical procedures, it’s a downward spiral from there. It happens all the time.
      “There’s nothing new in the world except the history you don’t know” – Harry Truman.

      • Unfortunately this cycle that you describe is all too common! I certainly could envision this, with the caveat of me being a primarily reconstructive plastic surgeon, if I had not become financially literate.

        Now, I have a 43%+ savings rate, invest wisely in my businesses as well as investments in index funds according to my asset allocation and plan along with cash flowing rental properties!

    4. At first, I was flummoxed by the headline as I was uncertain as to whether it was referring to quality or finances? Being that it is the later, I would offer the following. First, you conveniently ignore a whole host of definitions and nuances which are important to the discussion. How do you define wealthy and poor? There are well defined descriptions according to government statisticians with respect to income and wealth. Yes, any working physician’s income exceeds the government definitions of poor however, compared to professions which attract intelligent, high performing individuals (business, law, etc.) most physicians have lower upside potential given the wage ceiling and number of years spent in training. Certainly, being fiscally prudent or the “millionaire next door” is sagely advice for anyone, let alone physicians.

    5. I was poor, in solo family practice. But althought the business climate for solo practice was poor, I have myself to blame, not learning financial literacy (a must for all doctors), and maximizing income. I never asked for advice. Now I am a happy more knowing contractor. I do disagree w one thing written or maybe just add to the suggestion concerning a well indexed fund, one should have broad diversity, including physical assets (metals, gems considering the radical changes that came and are coming.

      • Thanks for the comments Patrick! Financial literacy is absolutely a must. I’m not opposed to having a small percentage of your portfolio in precious metals but I think 5% or less.

    6. I don’t get it. You obviously knew what you were getting into when you ‘signed up for the job’ so to speak! I did. Nobody should become a physician for the money. You have no reason to complain after the fact.

      • Hi John, thanks for reading the post! I think it’s fair to argue that all physicians don’t really know what they are signing up for as 20 year old kids out of college. But that’s neither here or there.

        We don’t become physicians for the money. But to ignore money is a road to burnout and becoming a worse doctor. Financial well being is a critical component of overall well being. The pervasive mindset in medicine of “we don’t do this for money” unfortunately is a huge contributor to the abysmal levels of financial (il)literacy in the profession

    7. I chose a 3year FM residency, and I was a CHARTER MEMBER of the ABFM .and after 2 years the Army let me out during the Viet Nam conflict. We lived pretty well on Base and I was promoted from Captain to Major while in. I was able to do some moonlighting for Insurance Companies, and had good housing and good dinners a the Officers club.

      Tuition at med school was vey reasonable due to Indiana State Government Support.
      My first job was with an aging experienced GP, and office visits were only $7.50. My Salary was very low, and after a year of very low salary, I opened my own solo office, and soon hired an office management company to help. I was able to get an FHA home loan (still exist). He guided me to the first year of profit and develop a beginning savings investment.
      I worked 50-60 hours a week, and handled most of my calls. I had almost a 50% overhead. When the hospitals started hiring FM, I could not hire graduate residents, due to the high salaries THEY offered. After 20 years of busy but enjoyable work as a solo, I was denied an HMO membership, and lost overnight about 25% of those member families.
      IN CONCLUSION: The Healthcare system of the U.S. MUST establish a system to encourage training programs that shorten Med School education and begin clinical FM and IM programs that turn them out in large numbers.. They will NOT EVER be poor again, and they will work in well planned PATIENT CENTERED MEDICAL CENTERS Throughout our country.

    8. Hi Jordan,
      As a physician who has just past the 30 year mark working as a private Internal Medicine physician, who even now, only makes half of your current salary, I found the Estimated Net Worth Calculators surprising! Even while living and practicing in California, my net worth is over 3 times using both the of these calculators!

      Oh, and I also invest & renovate (CA) Real Estate on the side. My most recent real estate coup was a Reverse 1031 and created 2 units used as Vacation Rentals. Through your site, I’ve also discovered the Carp Diem blog for that too!

      Since reading your blog, I have discovered that I am in better financial shape than I ever thought! I’ve even started working with a Financial Planner to start figure out how best to tap into the assets that I have when I start to retire.

      I have really enjoyed your blog, and suspect I would be farther ahead still if I had the encouragement, frankness and clarity that you provide with your blog.
      Thanks again for honestly discussing the basics about finances and how it applies to doctors.


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