I can retire---and my doctor can't?!?

[tangomonster]

Okay---what is wrong with this picture.

Went to my doctor yesterday for work-stress-related stuff (hypertension, anxiety, insomnia, heart palpatations). He thinks it's just stress and that it will get better in 10 weeks (ER, in part to you guys convincing us that we could do it).

He said he was jealous and wishes that he could retire early, but he sees himself working for many more years.
He is virtually my and DH's age (50 versus my 52) and has no kids, like us. Didn't think he was into fancy things. Does seem to eat out a lot.

It made me a little paranoid and I started to wonder whether DH and I have made some error about our FI and ER ability. If my doc can't do it (internal medicine in a wealthy suburb of Atlanta, very busy practice with four other doctors---have no idea how much he makes but let's say $150,000 to $225,000+), how can we think we can do it---us who have never earned more than $80,000 combined?

The only possible answer I can come up with is that maybe we've just invested more/better. I tried to tell him about the 4% SWR and his eyes glazed over, so he may not be into financial things---whereas we started to save and invest in our twenties.

But it made me uncomfortable (first, actually saying aloud that we;re going to ER in 10 weeks and then that we have the finances to retire but our doctor doesn't!). I guess it's possible that he doesn't have the 4 million net worth we do or couldn't live as simply as we do, but it still was a little freaky....

 

[2B]

Welcome to the forum.  Enjoy ER.

The ability to ER is to live below your means for many, many years.  You did.  He didn't.  Case closed.

I have to throw in more detail.  Many years ago you were working and saving while the doctor was running up student loans to become a doctor.  He got out and started his practice but he had been depriving himself all those years in college, medical school, residency, etc. that he deserved that expensive house and BMW.  Everyone is glad to give the doctor credit.  You were still living below your means and saving.  You probably weren't a genius investor but you were saving and investing.  That's why you can ER and he'll work until the day he dies.

Of the doctors I have known, they are all in debt.  They somehow think that their enjoyment of the finer things is part of the package.

Now I am ready to be slammed by the 48 ER'd doctors that are regulars on this forum. If there are any?

 

[Brat]

I had an uncle (since passed away), an MD, who spent a lot of his time on community work, made a good but not huge income, and spent what he earned on a large family.

When he retired my stay-at-home society aunt discovered that they had nothing but a house and social security. He was not money wise, but he was a darn good doc.

 

[Rich_by_the_Bay]

..He said he was jealous and wishes that he could retire early, but he sees himself working for many more years...Okay---what is wrong with this picture.

Well.. think about having > $150k in debt at age 28. Think about paying every spare penny to remove the debt until you are about age 40. Then you note that you live in a modest home and your amazingly supportive spouse desires a reasonable but much more expensive house and, finally, a nice vacation. Then your kids enter high school and you realize that you will need to come up with, say, 20K/kid/year. Add to that the fact that most primary care docs earn mid-100s, plenty of money but not Bill Gates.

I think you get the picture. The greatest cost is the inability to begin saving early in life.

Fortunately for me, I sold my practice when I went back to academics 15 years ago and it helped jump start our serious savings. We live(d) nicely but not exorbitantly. Shooting for ER at age 60 or so.

What makes it all worth it: I have always loved the work I do, have done it for the rich and for the poor alike, and get a hug or a little thank-you card or gift from a patient pretty regularly. Maybe even get to save a life here and there, help make lots of others a little more comfortable or just reassuring folks about scarey false alarms. It has been a fine tradeoff for me.

But the time comes when you need some balance, some time for self and family, and less adrenaline, less on-call, less 2 am phone calls. If I can pull off this semiretirement thing in a couple of years, it will be just right.

 

[Helen]

Our family doctor of 40 some years was forced to retire and is not only broke but in debt. The last time my Mother saw him he didn't have any teeth and couldn't afford dental care. He is a nice guy but was really poor at money management.

My Father always said that most doctors are really bad with their money. I think it's a combination of feeling entitled to spend to keep up with the image and not having time to learn about personal finance.

-helen

 

[roadkill]

I think you get the picture. The greatest cost is the inability to begin saving early in life.

There is no question that most of us get maybe a 8-10 year head start on most doc's in so far as saving is concerned. The ole basic power of compounding.  On the other hand, I am familiar with several who simply need to live the high consumption lifestyle that society expects doc's to live. As a result they are living paycheck to paycheck on $200K per year.

 

[JPatrick]

It's the tale of two IQ's for many, no question about the professional IQ, but often the financial IQ never develops,  for good reason.
But fear not,  there are few other professions that attract more souls "willing to take care of it for yah doc."  So while your sawbones is toiling, you can bet there's a financial planner that's funnin.
I'm sure that is too harsh. 

 

[Nords]

I tried to tell him about the 4% SWR and his eyes glazed over, so he may not be into financial things---

I'm beginning to think that a clue lies somewhere in that sentence!

Maybe he just doesn't want to retire?

 

[haha]

My Father always said that most doctors are really bad with their money.  I think it's a combination of feeling entitled to spend to keep up with the image and not having time to learn about personal finance.

-helen

It may be different now, but 20 years or so ago if a Doc were in private practice, and if he were in a field where he was depending on referrals, he night have had to keep up an expensive front. Better to spend your money to establish a reputation as a success, get referrals, make more money- than to fail in practice.

Several of my old friends and a few cousins are Docs. Another thing that happens to them is divorces and wives that feel neglected and need a natural pearl necklace to try to keep them away from that cute tennis pro.

Also, these guys love to speculate. I have known several who actually went bankrupt with farmland/ property development speculations. Also some got truly rich the same way.



Ha

 

[2B]

From what I'm reading doctors aren't any different than the rest of us except they start their careers about 10 years later and in debt.

Most people have an almost zero financial bent. I don't know how many people I've talked with about portfolio management (low cost diversified mutual funds) and the importance of saving at least 10 - 15% of their pay. Most people stay with their "financial advisor" or keep chasing the next hot stock. Plus, they can't see how they could possibly save another penny over their minimal 401k contribution.

The people on this forum are different. Very few of us inherited a fortune, made a huge killing in stock options or bought that IPO that turned $2K into $2MM in 4 years.

Most everyone hear would probably say their approach has been to live below their means, save regularly and invest for the long haul.

 

[Rich_by_the_Bay]

From what I'm reading doctors aren't any different than the rest of us except they start their careers about 10 years later and in debt.

Bingo.

Or, to paraphrase someone famous, "Doctors are just like everyone else, only more so."

 

[grumpy]

Oh, please! Lots of folks start their careers with a load of educational debt that is just as great a percentage of their starting salary as do doctors. So many people deify doctors just because they had the book smarts to get through medical school. They forget that when it comes to money doctors are often just as stupid as most other folks. If a doctor making $200K or more can't retire its because he didn't make a plan to retire and stick to it. Simple as that.

Grumpy

 

[Rich_by_the_Bay]

Oh, please! Lots of folks start their careers with a load of educational debt that is just as great a percentage of their starting salary as do doctors. So many people deify doctors just because they had the book smarts to get through medical school. They forget that when it comes to money doctors are often just as stupid as most other folks. If a doctor making $200K or more can't retire its because he didn't make a plan to retire and stick to it. Simple as that.

Naah, it's not as "simple as that." Though like I said above, I agree that doctors are just like everyone else when it comes to money. Not sure where the "deifying" thing enters in here, but I'll let you sort that out for yourself.

The reason it's a legitimate issue is that you have to combine college debt with medical school debt with training at low wages until you are 30+. At that point your jumbo loans become payable with interest. Usually you are well advised to a) save emergency funds, then b) retire your debt , and then c) save and invest. You could nitpick about low interest loans v. higher stock market gains but the reality is that the debt feels and is like a thousand pounds on your 30 year-old shoulders.

Whatever issues one might have with the profession or its practitioners, that particular set of circumstances, at least for those of us who paid our own way, makes for a very slow start on the FIRE journey. Not complaining or saying there aren't plenty of financial-idiot medical geniuses out there, just that it's a particular set of challenges to be dealt with. Well worth the reward, at least to me.

 

[Martha]

I am with Rich on this one. Remember the power of compounding that we pound into the heads of every young person that comes to this board? It is tough to start early saving for retirement when you go for an advanced degree. I see what kind of debt my associates have when they start practicing law.

 

[Lazarus]

Those $50,000 a year nannys make it hard too!

 

[poboy]

Old but still true, "Not what you have, but what you have left over."

 

[newyorklady]

doctors don't make that much anymore, because of the high insurance rates. some doctors make a killing, mainly surgeons. the doctors i know do live a great lifestyle but aren't financially savy. so there you go...

 

[Helen]

I am with Rich on this one.  Remember the power of compounding that we pound into the heads of every young person that comes to this board?  It is tough to start early saving for retirement when you go for an advanced degree.  I see what kind of debt my associates have when they start practicing law.   

Well, I didn't buy a house or start saving for retirement until I was 35. While I never was in trouble with debt, I wasn't a saver. Still I will be able to retire at age 56. My household income will not be close to that of a Doctor's ( and rightfully so), but the late start and high debt might be a wash compared to the high salaries once in full practices.

I think it is the expectations of living the high life styles (as documented in the Millionaire Next Door) combined with the lack of time to learn about investing.

I am guessing that most of us have spent a lot of time learning about saving and investing - I know I have. Most MD's don't have enough time for families let alone learning about investing.

JMO,

-helen

 

[sgeeeee]

My doctor is an Asian woman. I get the feeling that she was probably born wealthy enough to retire, but she has chosen to keep a practice in a relatively poor part of town in an old storefront. Whenever I go to her office, it is always a diverse cultural experience. I really like her. She doesn't have a coddling bedside manner. She and her staff are incredibly efficient. Our exchanges are brisk and factual. She asks the questions. I answer them. She prescribes or refers. I'm out the door. And she's good.

She used to charge me $5 for an office visit. But an interesting thing has happened the last couple of times I visited. She has not charged me at all. Last time I had to see her, I mentioned to her office worker that I never got charged on my last visit and asked if I could pay for both visits this time. I was told that the doctor left instructions that there was no charge. My wife uses the same doctor and was not charged last time either.

I'm worried that the doctor has come to the conclusion that my wife and I cannot actually afford healthcare so is providing it for free. I don't know how to bring up the subject to let her know that we are multi-millionaires who just happen to dress in old clothes, get haircuts twice a year, and like her no-nonsense style.

 

[2B]

sgeeeeeeeeee,

Maybe she's not telling you the whole truth. I'll bet she always wears rubber gloves when she's around you. It's possible she doesn't want to to leave anything behind that you've touched -- even money.

 

[Martha]

SG, why not give a gift to the clinic?

I know a Korean woman who was also born into wealth. She is a surgeon. Some people actually work because they want to.

 

[2B]

Another approach is to just come right out and tell her you appreciate her not charging you but you can afford to pay. There's no reason to tell her the millionaire stuff. Since you probably look like a destitute bum to her anyway, that would only make her think you have dementia.

If she still won't charge you, Martha's idea is good except you would then have the added problem of figuring out what they wanted or needed every visit. If it bothers you that you're getting something for nothing, donate the fee to a charity in either her name or yours.

 

[DW]

I've never really undestood the debt-ridden, unable-to-retire M.D. syndrome. I don't think it's just an issue of starting late and having school expenses. I put myself through college, then grad school, and got a "real" job on a university faculty at age 29. I'm certainly paid much less than an M.D., but I'm going to be FIREd by age 58-59 with an SWR above my current salary. No magic - just did what most of you folks did: lived below my means and saved. My guess is that the issue with M.D.s has a lot to do with spending to maintain a high lifestyle instead of saving.

 

[Rich_by_the_Bay]

I've never really undestood the debt-ridden, unable-to-retire M.D. syndrome. ...My guess is that the issue with M.D.s has a lot to do with spending to maintain a high lifestyle instead of saving.

You are right about much of this. The only consistent difference is that after putting one's self through school and residency, physicians often have 100K to 200K of debt and are 30-33 years old. Freedom from debt and thus ability to save comes in the early 40s.

Not an impossible situation given the promise of large income, but it does require enlightenment at a fairly young age. In that regard, at least, it is their problem from that moment on. Note, too, that income can vary 300% from specialty to specialty (primary care [internal medicine, pediatrics, etc.] at the low end, and procedural subpecialties [gastroenterology, ophthalmology, surgery, radiology, etc.] at the high end.

For me, I saw the light at around age 40 (not coincidentally the same age I got my debts paid off). I was able to do OK from then on, but had I started 15 years earlier, my current picture -- satisfactory as it is -- would look a lot brighter.

So, it's true that there is nothing unique or special about medicine as a FIRE profession except that the high stakes years (read the early years) are shot.

 

[DW]

The only consistent difference is that after putting one's self through school and residency, physicians often have 100K to 200K of debt and are 30-33 years old. Freedom from debt and thus ability to save comes in the early 40s.

Yep...that loss of 10+ years to save could make a big difference.