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Why Aren't More Doctors Driving Ferraris?


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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.

Most residents are fairly old. A ton of them are married or have kids. Kids are little money pits. And aren't condusive to roommates.

 

While some people certainly do overspend, another part of the problem is just that people are old in residency much of the time and you start to run into the real adulthood years, which cost significantly more than the college years (when roommates and KD are much more acceptable).

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Most residents are fairly old. A ton of them are married or have kids. Kids are little money pits. And aren't condusive to roommates.

 

While some people certainly do overspend, another part of the problem is just that people are old in residency much of the time and you start to run into the real adulthood years, which cost significantly more than the college years (when roommates and KD are much more acceptable).

 

I know we're all worked up over here but let's not drag KD into this. You tell me an age when KD isn't acceptable and I'll call you a god damn liar.

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Most residents are fairly old. A ton of them are married or have kids. Kids are little money pits. And aren't condusive to roommates.

 

While some people certainly do overspend, another part of the problem is just that people are old in residency much of the time and you start to run into the real adulthood years, which cost significantly more than the college years (when roommates and KD are much more acceptable).

 Fair enough, definitely a more complex problem than i brought to the table. Was just trying to give a simple example to the poster who I assumed was younger (or trolling) due to the na. There are definitely a lot of older people in residency as you have said, many coming from previous careers and educations. Certainly not everyone who gets into medical school is a fresh 22year old undergrad graduate by any means. 

 

I know we're all worked up over here but let's not drag KD into this. You tell me an age when KD isn't acceptable and I'll call you a god damn liar.

 Probably the best post that will exist in this thread

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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.

Well, when I was doing my clinical practicum at a hospital, I saw plenty of Porches in the parking spots reserved for "physicians on call" - so at that hospital, at least, there were a good number of physicians with Porches who drove them to work and didn't seem to worry about the optics. I did see many more BMWs and Mercedes though. Those are less flashy than the Porches.

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Well, when I was doing my clinical practicum at a hospital, I saw plenty of Porches in the parking spots reserved for "physicians on call" - so at that hospital, at least, there were a good number of physicians with Porches who drove them to work and didn't seem to worry about the optics. I did see many more BMWs and Mercedes though. Those are less flashy than the Porches.

 

I think it would be a more significant issue when it comes to smaller practices. Nobody wants to walk around the ferrari parked in "Dr. Feelgud's" spot in front of a family clinic only to go in there and wait hours for a doctor who will tell them that it doesn't matter what they googled on WebMD, go get a blood test and come back in 3 weeks when it's done.

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I think it would be a more significant issue when it comes to smaller practices. Nobody wants to walk around the ferrari parked in "Dr. Feelgud's" spot in front of a family clinic only to go in there and wait hours for a doctor who will tell them that it doesn't matter what they googled on WebMD, go get a blood test and come back in 3 weeks when it's done.

I mean almost all of the time it truly doesn't matter for what patients google on Web MD....

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Also Ferraris dealerships are few and far between in this country. It's not like I can pick one up in any reasonably sized town and Joe Mechanic at my corner garage can service it for me. So that's also probably holding Ferrari purchasing back.

 

Full disclosure: i do know a doctor with a very nice Ferrari.

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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.

 

I'm not so sure about that a lot of Fam Docs can make 250-300k and they will probably work a less stressful job with similar hours to a VP. A VP in IB probably makes more than 280k a year though I believe. At the same time, its a very stressful job, you really can't compare someone who works 60 hours a week but is doing high stress tasks all day and responding to emails all night with someone who works 60 hours a week but is more or less able to have the same job day in and day out. 

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I'm not so sure about that a lot of Fam Docs can make 250-300k and they will probably work a less stressful job with similar hours to a VP. A VP in IB probably makes more than 280k a year though I believe. At the same time, its a very stressful job, you really can't compare someone who works 60 hours a week but is doing high stress tasks all day and responding to emails all night with someone who works 60 hours a week but is more or less able to have the same job day in and day out. 

 

250-300k before overhead  :P  Typical take-home pay for FM docs is considerably lower.

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  • 2 weeks later...

I imagine a lot of newer doctors, especially the ones that chose specialties based on lifestyle, are planning on retiring at an age somewhat similar to many others in the general population i.e. around 65. Therefore they actually have to think about saving money for their retirement. This is in contrast to older doctors who may have been willing to work until their 80s or even later if they could. Buying a Ferrari is correlated with less savings in your bank accounts and investments. Therefore, probably not a great idea for docs who aren't making bank in the 1% of physicians.

Actually I have no idea if that correlation is even true because for all I know only super rich people buy Ferraris.

Maybe buying a Ferrari is actually correlated with having more money in your bank account and investments. Therefore buying a Ferrari makes you richer.

I do need a new car...

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My husband works on some fancy cars now and then (he does auto glass.) In fact, he was working on a Ferrari yesterday.

 

Why on earth would you want a vehicle that requires that much babying? They just end up requiring such careful handling because damaging them in any way, including what would be considered normal wear and tear on other vehicles, reduces their value so much.

 

They're pretty and all, sure, but any time we've seen them around (seems to be a fair number of stupidly expensive vehicles running around Toronto any time we drive through) they're stuck in traffic just like everyone else.

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My husband works on some fancy cars now and then (he does auto glass.) In fact, he was working on a Ferrari yesterday.

 

Why on earth would you want a vehicle that requires that much babying? They just end up requiring such careful handling because damaging them in any way, including what would be considered normal wear and tear on other vehicles, reduces their value so much.

 

They're pretty and all, sure, but any time we've seen them around (seems to be a fair number of stupidly expensive vehicles running around Toronto any time we drive through) they're stuck in traffic just like everyone else.

 

 

Just like anything in life, people have different interests. Some people love to travel, some love fine food, others love to have a beautiful home, while some people would love to have the car of their dreams in their garage. Of course some will buy them as a status symbol but those who truly love cars see it more as a labour of love rather than an annoyance. Keep in mind, these cars would probably be used on the weekends for all the reasons brought up before (too high profile, too expensive to maintain and run all the time etc.) so they won't be seeing as much wear and tear as your daily driver. 

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My husband works on some fancy cars now and then (he does auto glass.) In fact, he was working on a Ferrari yesterday.

 

Why on earth would you want a vehicle that requires that much babying? They just end up requiring such careful handling because damaging them in any way, including what would be considered normal wear and tear on other vehicles, reduces their value so much.

 

They're pretty and all, sure, but any time we've seen them around (seems to be a fair number of stupidly expensive vehicles running around Toronto any time we drive through) they're stuck in traffic just like everyone else.

 

I personally don't have an interest in cars but I wouldn't put down people that do.. some people have a genuine interest in fancy cars, and not even to "show off". They like taking it to the track and driving it around. 

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I don't have a lot of interest in owning a "fancy" car (I drive a 9 year old VW Rabbit with escalating rust issues).

 

But I did rather enjoy parking next to a Lamborghini at the Avalon Mall two weeks ago. The owner had either gone to Starbucks or possibly Sears...

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I don't have a lot of interest in owning a "fancy" car (I drive a 9 year old VW Rabbit with escalating rust issues).

 

But I did rather enjoy parking next to a Lamborghini at the Avalon Mall two weeks ago. The owner had either gone to Starbucks or possibly Sears...

Sure it wasn't a Ferrari F430? I know there is one of those in town.

 

On a side note, Sears is the worst. No idea how they are still in business.

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Sure it wasn't a Ferrari F430? I know there is one of those in town.

 

On a side note, Sears is the worst. No idea how they are still in business.

Oh I inspected it quite closely. Lamborghini all the way.

 

Sears is occasionally good for socks and underwear. Pillows and bedding.

 

That's about it. Can't even buy a clock radio there anymore.

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Suppose you start working as a specialist, lucky enough to have a full time job at the age of 35 with a ''fat salary'', but with 200k+ of debts, no savings, a Ferrari is not exactly a wise spending, especially if you're looking forward to start saving for retirement and some downpayment for a mortgage. The car itself is über expensive + you can't drive that car everywhere (small cargo, potholes will destroy it, can't drive it in snow)... i.e. you need to buy another car. So a practical answer would be: doctors don't really make enough money for that.

Edit: oh and most med students I know don't really want to own a Ferrari or the like even if they could afford it.

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