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Why Aren't More Doctors Driving Ferraris?

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The average family doctor is making around 280k, the avg internist is doing like 390....even after tax and overhead thats good money. Why aren't more doctors driving ferraris, lambos, and porsches? Save up for 2-3 years. Maybe even after a year you could afford one. 

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Even if you ignore the fact that not everyone wants an expensive/high profile car, cars like that require a lot of upkeep. Cars of that caliber are money sinks and you really have to have the money and passion for the car to maintain it properly. To most it's just not worth it to throw a couple hundred thousand dollars at a depreciating asset that will only cost you more money as you use it. 

 

I'm also ignoring the quoted average incomes that you mentioned as I'm no expert on earnings of physicians but I feel those numbers are a bit on the higher side of things.

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impact on your finances aside and living in a climate where such cars have reduced utility,  it is a conservative profession. right now in particular showing off wealth is not likely to make you a lot of friends in the field or with the other health care workers - it reinforces the notion that we are paid too much, and that is not a message people like being sent out. That will only lead to pay cuts in the future or other forms of bad will. Being too flashly will hurt your career in many ways.

 

Some doctors have those cars - they saved up like you are suggesting. They tend not to routinely drive them around though.

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Priorities and values come in to play their role. Highly expensive cars that will be not be used often don't excite most doctors, nor does showing off wealth. Doctors work hard and have better things to do with their money, like planning for the family, preparing for retirement, their kids' education and other sensible priorities. Cars play a role of functionality, they are not seen as investments or as a means of excessive spending.

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I see a lot of high end cars in driveways, but rarely on the road. Honestly like some of the other posts mentioned, there are a lot of deterrents, either personal or external, that actually makes owning those types of cars a hassle. (I would definitely buy a Tesla X because I'm low key that kind of person haha)

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I was talking to my financial advisor about physicians, and he said a big problem is the debt levels to prevent them from doing this. A problem people encounter is that they are about to finish residency and they ramp up their expenses during residency or shortly after before they have paid off loans. They have their LOC racked up, during residency they increased their cost of living and got a nicer place, some student loans still, maybe a car loan. Then once they get out take out a mortgage on a house, many of his clients bought like 600-700K homes, which where I live is a big house. Then you have a massive quantity of debt, if you have already started having kids even more. 

 

 Then you are like 32 if you specialized with huge debt, and a family on the way or growing. So really the pay is high but by the time some of them manage to pay this all off such purchases just don't seem worth it. Now other doctors he knows lived within their means with roommates in residency paid off loans ASAP, then got a house and have a lot of money in the bank. I just think living under your means, paying loans off asap, saving etc isn't the route that comes naturally to most people. 

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I'm starting to think this is a troll thread... It seems a little weird to me to assume that the majority of doctors would want to drive luxury cars. People here have made some pretty good arguments as to why a lot of doctors fiscally can't, but then I don't know if most doctors would even want to if they had the means. I know I wouldn't, even if just for the reason that I wouldn't want my patients to see my flashy Porsche parked outside the clinic while they may be scraping together the money they need for treatment. There's already enough of a power differential between physicians and patients, and I wouldn't want to contribute to that any more.

 

In the end, to each their own. It's up to you how you want to spend the money you work hard to earn. But I'd much happier with something more practical and more humble.

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I'm starting to think this is a troll thread... It seems a little weird to me to assume that the majority of doctors would want to drive luxury cars. People here have made some pretty good arguments as to why a lot of doctors fiscally can't, but then I don't know if most doctors would even want to if they had the means. I know I wouldn't, even if just for the reason that I wouldn't want my patients to see my flashy Porsche parked outside the clinic while they may be scraping together the money they need for treatment. There's already enough of a power differential between physicians and patients, and I wouldn't want to contribute to that any more.

 

In the end, to each their own. It's up to you how you want to spend the money you work hard to earn. But I'd much happier with something more practical and more humble.

 

 For sure, I honestly don't plan on ever buying an expensive car. I don't see the point, I will buy the cheapest good quality car available, preferably for environment sake hybrid. A vehicle literally is only used to get you from location to location whether you are in a 150k car or a 20k car i find once you are used to it and driving a lot at the end of the day you still can't wait to get out of the car and to the location you are driving to. I don't have a large desire to prove I can afford something 

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I was talking to my financial advisor about physicians, and he said a big problem is the debt levels to prevent them from doing this. A problem people encounter is that they are about to finish residency and they ramp up their expenses during residency or shortly after before they have paid off loans. They have their LOC racked up, during residency they increased their cost of living and got a nicer place, some student loans still, maybe a car loan. Then once they get out take out a mortgage on a house, many of his clients bought like 600-700K homes, which where I live is a big house. Then you have a massive quantity of debt, if you have already started having kids even more. 

 

 Then you are like 32 if you specialized with huge debt, and a family on the way or growing. So really the pay is high but by the time some of them manage to pay this all off such purchases just don't seem worth it. Now other doctors he knows lived within their means with roommates in residency paid off loans ASAP, then got a house and have a lot of money in the bank. I just think living under your means, paying loans off asap, saving etc isn't the route that comes naturally to most people. 

 

this is exactly why you shouldn't ramp up your expenses to that level :) I mean you can increase it of course but the idea of spending every cent you earn is not logical - particularly while you are in debit. It isn't the route that comes naturally to most people, but that is why the average professional is also not as financially successful as they could be.

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I think it has to do with the motivation people have to go into medicine. In careers where the prime motivation is in fact money, like in investment banking, corporate law, or private equity, then you will see these professionals show their money by buying expensive cars and properties - because that is ultimately part of the end result they want to see out of their career. Medicine is different because:

 

1. Money is not usually the prime motivation (stability and a good living is another thing).

 

2. Relatively speaking, you actually don't make "big bucks" as a Family MD compared to equally successful people in finance or law. A VP in investment banking (with a bachelors degree and 4-5 years prior work experience) can make ~$180, 000 base salary and up to ~$100,000 bonus. You can make even more in private equity or as a partner at a corporate law firm. The ceiling here is unlimited because it's private sector and they don't have to pay any overhead.

 

The only MD specialities with salaries that could potentially exceed their counterparts in finance or law are orthopedic, cardiothoracic, or neurosurgeons. And these specialties make up a very small percentage of the total MD population.

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I think it has to do with the motivation people have to go into medicine. In careers where the prime motivation is in fact money, like in investment banking, corporate law, or private equity, then you will see these professionals show their money by buying expensive cars and properties - because that is ultimately part of the end result they want to see out of their career. Medicine is different because:

 

1. Money is not usually the prime motivation (stability and a good living is another thing).

 

2. Relatively speaking, you actually don't make "big bucks" as a Family MD compared to equally successful people in finance or law. A VP in investment banking (with a bachelors degree and 4-5 years prior work experience) can make ~$180, 000 base salary and up to ~$100,000 bonus. You can make even more in private equity or as a partner at a corporate law firm. The ceiling here is unlimited because it's private sector and they don't have to pay any overhead.

 

The only MD specialities with salaries that could potentially exceed their counterparts in finance or law are orthopedic, cardiothoracic, or neurosurgeons. And these specialties make up a very small percentage of the total MD population.

 

Law isn't that much less conservative than medicine. Similar to what rmorelean said, lawyers don't really want their clients to think they are being overpaid. But there's also a balance that needs to be struck with dressing and living lavishly enough that your clients your that you are successful and know what you're doing.

 

Also, you're not going to find too many (if any) VPs in banking that don't have an MBA. You're pretty much stuck at analyst until you get that grad degree and move up to associate.

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Many in the public eye let their high earnings go to their head, and they eventually need to declare bankruptcy - all due to no restraint and poor choices. Often, residents end up buying condos and have little left after paying down their LOCs, living expenses and mortgages. My only luxurious expense, but not really, is to take 4 one week vacations for R & R - but I would think that residents would agree this is more of a necessity to re-energize and bounce back to normalcy.

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Law isn't that much less conservative than medicine. Similar to what rmorelean said, lawyers don't really want their clients to think they are being overpaid. But there's also a balance that needs to be struck with dressing and living lavishly enough that your clients your that you are successful and know what you're doing.

 

That may be true for family or criminal law but not at all for corporate or M&A, when your clients are wealthy institutions or businesses. When you interact with clients, you represent the firm (in all its formality), work on contracts and meet the deliverables all in a business formal setting. It's more impersonal than other types of law and your frugality isn't rewarded.

 

Also, you're not going to find too many (if any) VPs in banking that don't have an MBA. You're pretty much stuck at analyst until you get that grad degree and move up to associate.

 

I've seen quite the opposite. The trend now is that more VPs are former analysts who became associates (without any advanced degree). They're lower risk hires for the banks because they already work in finance and know the industry. The main reason you might see MBAs at the associate level is because they were career-changers (no prior experience in banking) and got in via campus recruiting - so in this case, a MBA was key. But more often, banks prefer industry hires with direct experience rather than a MBA/career-changer.

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Law isn't that much less conservative than medicine. Similar to what rmorelean said, lawyers don't really want their clients to think they are being overpaid. But there's also a balance that needs to be struck with dressing and living lavishly enough that your clients your that you are successful and know what you're doing.

 

That may be true for family or criminal law but not at all for corporate or M&A, when your clients are wealthy institutions or businesses. When you interact with clients, you represent the firm (in all its formality), work on contracts and meet the deliverables all in a business formal setting. It's more impersonal than other types of law and your frugality isn't rewarded.

 

Also, you're not going to find too many (if any) VPs in banking that don't have an MBA. You're pretty much stuck at analyst until you get that grad degree and move up to associate.

 

I've seen quite the opposite. The trend now is that more VPs are former analysts who became associates (without any advanced degree). They're lower risk hires for the banks because they already work in finance and know the industry. The main reason you might see MBAs at the associate level is because they were career-changers (no prior experience in banking) and got in via campus recruiting - so in this case, a MBA was key. But more often, banks prefer industry hires with direct experience rather than a MBA/career-changer.

 

 

Neither of these responses have been my experience.

 

Law: Sure, you don't want to go into a meeting looking shabby, but the client in those circumstances will almost always look like the richest person in the room (even if they aren't). The cars in the parking lot are very nice, but nothing exotic (those are parked at home).

 

Finance: My experience here is strictly with the IBs in my family and some of my friends in the industry. All got MBAs for the move from analyst to associate. But these handful of people work for 2 banks so it's possible this requirement is limited to these two institutions (not bulge brackets).

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Law isn't that much less conservative than medicine. Similar to what rmorelean said, lawyers don't really want their clients to think they are being overpaid. But there's also a balance that needs to be struck with dressing and living lavishly enough that your clients your that you are successful and know what you're doing.

 

Also, you're not going to find too many (if any) VPs in banking that don't have an MBA. You're pretty much stuck at analyst until you get that grad degree and move up to associate.

I have a friend earning in the 7 figures who is an investment banker. He does not have a MBA, rather he has law degrees. Being an investment banker requires being an excellent communicator much more than entering with the technical skills, which you develop on the job. He also lives like he is a millionaire, but that is virtually a given in this field.

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Law isn't that much less conservative than medicine. Similar to what rmorelean said, lawyers don't really want their clients to think they are being overpaid. But there's also a balance that needs to be struck with dressing and living lavishly enough that your clients your that you are successful and know what you're doing.

 

That may be true for family or criminal law but not at all for corporate or M&A, when your clients are wealthy institutions or businesses. When you interact with clients, you represent the firm (in all its formality), work on contracts and meet the deliverables all in a business formal setting. It's more impersonal than other types of law and your frugality isn't rewarded.

 

Also, you're not going to find too many (if any) VPs in banking that don't have an MBA. You're pretty much stuck at analyst until you get that grad degree and move up to associate.

 

I've seen quite the opposite. The trend now is that more VPs are former analysts who became associates (without any advanced degree). They're lower risk hires for the banks because they already work in finance and know the industry. The main reason you might see MBAs at the associate level is because they were career-changers (no prior experience in banking) and got in via campus recruiting - so in this case, a MBA was key. But more often, banks prefer industry hires with direct experience rather than a MBA/career-changer.

Although it's highly possible that we have experiences from two different markets.

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I have a friend earning in the 7 figures who is an investment banker. He does not have a MBA, rather he has law degrees. Being an investment banker requires being an excellent communicator much more than entering with the technical skills, which you develop on the job. He also lives like he is a millionaire, but that is virtually a given in this field.

Yeah, I certainly wouldn't argue with bankers flashing their cash. That's practically required in that industry.

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and many are actually asset poor as a result. There certainly a bankers culture though - not an easy career.

Investment bankers live on their cash flow and so long as they have a high income, they can afford to pay for their mortgages, nannies, private schools for their kids, expensive vacations & restaurants, expensive cars and for some, their yachts and/or planes. However, they hae a short life span at the top and they can come to work one day to discover they are fired. As they have limited savings, if unable to find employment quickly at the same income, they cannot pay for their nanies, mortgages, etc - and so, they live on a very slippery slope.

 

However, others have a csh flow provided by their capital or a combination of working income and working capital.

 

As a physician, I will enjoy my practice (hopefully), live modestly and after paying off debt, build up capital which will work productively for me - so that in future decades, my capital will replace my professional income. As rmorelan said, we are a conservative group.  :P

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The average family doctor is making around 280k, the avg internist is doing like 390....even after tax and overhead thats good money. Why aren't more doctors driving ferraris, lambos, and porsches? Save up for 2-3 years. Maybe even after a year you could afford one. 

 

The thing is most doctors start earning a lot of money late, so by that time they have families and that is very expensive. Also, the type of person to become a doctor tends to not be as into the luxury lifestyle, i mean realistically doctors probably spent their 20s getting urine, feces, sweat and blood all over you in a sad depressing hospital making minimum wage, people who want the glam life typically don't go into medicine.  

 

Lastly, the type of person who becomes a doctor is probably a long term kind of person, considering the insane amount of delayed gratification there is, more likely they are the type to spend their money on a house which would appreciate in value over time rather than a car which loses 30-40% of its value the minute you catch those keys  :P

 

Do cardiologists chat about the latest tesla or porsche in between cases though? You bet they do...

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Neither of these responses have been my experience.

 

Law: Sure, you don't want to go into a meeting looking shabby, but the client in those circumstances will almost always look like the richest person in the room (even if they aren't). The cars in the parking lot are very nice, but nothing exotic (those are parked at home).

 

Finance: My experience here is strictly with the IBs in my family and some of my friends in the industry. All got MBAs for the move from analyst to associate. But these handful of people work for 2 banks so it's possible this requirement is limited to these two institutions (not bulge brackets).

Take my N=9, 6 out of 9 in IB got to their higher positions via work experience and not an extra  degree. 

 

Many of them have been working close to  5-6 years now, and 3 have left the field and moved back to more "sane" jobs.  

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I live in a very wealthy area (in no way does this imply my own current socioeconomic stratification) of working professionals.

 

Where I live, over 50% of people drive one of: BMW, Audi, Tesla, Mercedes Benz, Lexus, or maybe Porsche.  I don't ever think I've seen a Ferrari or a Lambo being driven on the roads here.  I've seen a few (enough fingers on one hand to count, probably) Lambos lurking in private parking spaces and garages here.  I don't think I've ever seen those being taken out.

 

Car insurance rates here are also pretty significant.

 

I think most doctors and working professionals have grown beyond the 'showing-off' stage.  Especially when they live amongst each other so that there's little really to 'show-off'.  I won't be surprised if those people would just roll their eyes at the question the OP posed (not that it shouldn't be asked, though!)

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