Why Aren't More Doctors Driving Ferraris?

[Edict]

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

 

But incorporation cuts tax rates for a number of things as well doesn't it? Idk i think we can say they are similar? 

[ralk]

But incorporation cuts tax rates for a number of things as well doesn't it? Idk i think we can say they are similar?

Incorporation is not some magic system that drastically reduces taxation. It can help, depending on circumstance, but it's not going to counteract 25-30% overhead costs. A VP earning 280k will still have higher take-home pay than an FM doc billing 280k.

[rmorelan]

Incorporation is not some magic system that drastically reduces taxation. It can help, depending on circumstance, but it's not going to counteract 25-30% overhead costs. A VP earning 280k will still have higher take-home pay than an FM doc billing 280k.

 

quite true - incorporation merely lets you do two (well important) things:

1) you can chose not to withdraw earnings in a particular year and thus not pay all the tax on them right away. That is a tax deferral scheme used mostly for retirement planning. That relies on you taking home a lot less than your maximum pay to work 

2) you can write off all reasonable business expenses. That is just standard for any business of course and in part where that 25-30% overhead is coming from. 

 

the VP earning 280K would still be way out ahead. On top of that salary as well I bet that VP has both a pension plan and/or stock options, and full benefits (and I mean full). Plus an expense account for travel......

 

Of course VP jobs earning 280K aren't exactly growing on trees either. 

[rmorelan]

Source of my last pair

Sorry to see the decline of the middle-class retailer.

 

some have argued it goes along with the decline of the middle class, and is a sign of the income divide. 

[cleanup]

 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 

 

I think you would be surprised how your tastes change as your income does. Not that I fully expect people to start to buy luxury goods as soon as they can afford them (given the difference between 'technically affordable' and 'actually reasonable'), but the definition of 'frugal' will certainly change as your income does. Right now, the 'cheapest good quality car' might be both affordable and reasonable, and a luxury European sedan technically affordable but unreasonable, but in a few years, that luxury car will be both. 

 

And I think it has less to do with you showing the world you have money and more to do with your own comfort level and treating yourself, because you earned it. When I buy something of quality & expense, it's not because I want to show it off, it's because it makes me happy. That's a much more carefully made decision than the one that's motivated by "I wanna look cool."

 

I think it's relatively safe to say that the folks driving around in 6-figure cars were able to do it because a. they decided to spend rather than save or b. they saved for a long time it became both reasonable & affordable. I'd say a sharp minority are in the camp where they simply make enough to both buy extremely expensive cars AND live frugally/fiscally responsibly otherwise. Even a top ophthalmologist billing $1.5 million a year would give some pause to buying a $300k Ferrari, as it's 20% of his annual income (I know, most of these are probably financed, but still).

[Edict]

quite true - incorporation merely lets you do two (well important) things:

1) you can chose not to withdraw earnings in a particular year and thus not pay all the tax on them right away. That is a tax deferral scheme used mostly for retirement planning. That relies on you taking home a lot less than your maximum pay to work 

2) you can write off all reasonable business expenses. That is just standard for any business of course and in part where that 25-30% overhead is coming from. 

 

the VP earning 280K would still be way out ahead. On top of that salary as well I bet that VP has both a pension plan and/or stock options, and full benefits (and I mean full). Plus an expense account for travel......

 

Of course VP jobs earning 280K aren't exactly growing on trees either. 

 

True, and in most cases your job security as a VP is nowhere near guaranteed. In addition, GPs are probably going to be earning that income sooner than most people could rise to the position of VP as well.  

[JohnGrisham]

Cargo pants.  Cargo pants are where it's at.

HA! I guess that might fly depending on how chill your hospital is?

[A-Stark]

some have argued it goes along with the decline of the middle class, and is a sign of the income divide.

There is much to this. To take one isolated example, I remember going to Yorkdale 20 years ago when it was a thoroughly middle class if still trending toward upscale mall. Now the Sears is gone and it's all Tiffany and Cartier and Tesla (!) and Holt Renfrew expansions.

 

Avalon Mall is enough for me. Got the Thai Express and the Lululemon now.

[NLengr]

There is much to this. To take one isolated example, I remember going to Yorkdale 20 years ago when it was a thoroughly middle class if still trending toward upscale mall. Now the Sears is gone and it's all Tiffany and Cartier and Tesla (!) and Holt Renfrew expansions.

 

Avalon Mall is enough for me. Got the Thai Express and the Lululemon now.

If I'm rich I'm not gonna walk around the mall on my own two feet like some peasant. That mall better send a golfcart to drive me around.

[JohnGrisham]

If I'm rich I'm not gonna walk around the mall on my own two feet like some peasant. That mall better send a golfcart to drive me around.

Or someone to drive a segway, while towing you on another segway.

[member_225]

Lmao this question is so stupid I'm glad people are giving you silly answers. 

[rmorelan]

I generally prefer to be carried around on a gilded chair carried by 4 ripped and shirtless men with an additional 2 fanning me with palm fronds along the way when I go to the mall...which might actually cost less than a lambo considering I don't go to the mall very often.

 

I guess that would work - personally I just have my personal shoppers do mundane tasks like mall shopping. Frees me up to sip more champagne and eat imported quail eggs.

[rmorelan]

There is much to this. To take one isolated example, I remember going to Yorkdale 20 years ago when it was a thoroughly middle class if still trending toward upscale mall. Now the Sears is gone and it's all Tiffany and Cartier and Tesla (!) and Holt Renfrew expansions.

 

Avalon Mall is enough for me. Got the Thai Express and the Lululemon now.

 

ha

 

in truth we can overall either have high paying jobs or cheap goods. Cannot have both at the same time in the long term without insane continuous productivity increases.

[NLengr]

I guess that would work - personally I just have my personal shoppers do mundane tasks like mall shopping. Frees me up to sip more champagne and eat imported quail eggs.

Imported endangered quail eggs. That's the only kind worth eating.

[Arztin]

Imported endangered quail eggs. That's the only kind worth eating.

What about a 1500 dollar sandwich?

[RedLily]

What about a 1500 dollar sandwich?

 

LOL, and that honesty at step 14...