Medicine...

[Lavarball 7]

I think you're really underplaying the difference between a 85000 and 150000 after tax income. That's almost a double increase! The biggest factor would the better ability to save and having more disposable income. If you assume that the FM physician has the same lifestyle as the PA and lives on 85000 dollars a yr, that means they are able to save 65000 dollars a year!

Taking that and investing 65000 dollars a year in a broad index fund and assuming around historical 6% percent return, you would end up with a 5.5million dollar portfolio after 30 years. It would vastly outweigh the pension of 1 million of the PA plus the opportunity cost of going to med school. You are looking at around a 3 million net worth difference!

[blah1234 136]

23 hours ago, gogogo said:

 

From a purely economic perspective, it depends on how old you are, how much you expect to make as a family physician, your salary as a PA, and the expected value of your PA benefits + pension. I'll make a few assumptions to show you the math, but you can change them for a more accurate outlook. This message looks long, but it's pretty straightforward, so I encourage you to read it to the end. But for a quick spoiler: Probably not worth it.

My assumptions:

Age: 25

FM Ontario average income: $250,000 post-overhead = $150,000 after income tax 

PA salary: $120,000 = 84,000 after income tax

Value of PA benefits = $2,000 per year

Value of PA pension: $84,000 x 50% x 25 years (this assumes that your pension will pay half of your post-tax salary for 25 years of retirement) = $1,050,000

 

Now let's chart your net worth's trajectory, starting with PA, where you earn $84,000/year + $2,000 in benefits/year: $86,000

Age 25: $86,000;

26: $172,000;

27: $258,000;

...You get the point, so I'll skip ahead to age 39 ($258,000 + $86,000 x 12 years):

39: $1,290,000

I stopped at 39 because it's the first year that your net worth as a FM would be greater than your net worth as a PA. But we should also look at how much it's greater: $10,000 (i.e., FM net worth = $1,300,000 at age 39). I am also assuming that you made zero investments as a PA (e.g., stocks that appreciate in value), that you have zero savings right now (that would only make your net worth as a PA look better), that there is no interest on your med school debt (which only makes your net worth as FM worse), and that you will never slow down productivity as FM (e.g., taking parental leave, working fewer hours in your late 50s and early 60s).

Even ignoring these exacerbating factors, you are essentially saying that you want to sacrifice 6 years of your life (med school and residency are not chill) so that at age 39, you can have $10,000 more as a FM vs. just staying a PA. Alternatively, you can stay a PA, which would mean enjoying the rest of your 20s, having stable hours, better wellbeing because of relatively lower stress, vacations, etc. Is that worth it to you?

But wait, there's also your pension, which is valued at $1,050,000. As FM, you'd have to save $35,000/year over a 30-year career to equal that pension value. In other words, let's subtract $35,000 from the FM post-tax salary, making it equal to $115,000. If we do that, then it would take until age 50 for your FM net worth to be higher than your PA net worth. Again, the net worth difference isn't much: $14,000. So up to you, but to me, putting up with all of med school, etc. isn't worth it to just be $14,000 ahead at age 50. 

Of course, you can make more than $250,000 pre-tax/post-overhead as FM, but after speaking to several FM physicians and shadowing them, that would be working very, very hard...for *most* physicians, that requires much more than the 37.5 hours/week you currently work. Even the $250,000 post-overhead is not easy; FM physicians are going from room-to-room, doing quick 10 to 15-minute appointments, lots of paperwork, etc. It's hard work and you really have to earn every dollar you make. There are those who do walk-ins exclusively and make crazy money, but not everyone can handle the 2-5 minute walk-in appointments, and who knows, the government may restrict walk-in practice because it is very lucrative.

So all in all, if it's just about the money, I agree that you're already in a great place and should just enjoy your life now. There is a reason that residents, even with the prospect of making multiples of your salary in a few years, are telling you that you've got a good gig. It's not always about salary in an absolute sense, but everything else that comes with it (lifestyle, how early you earn that salary, pension, benefits, stress, etc.). Also consider that many physicians will have a partner who stays home to take care of the family (i.e., no income earned from the partner). Given your hours and benefits, you can just find a partner who makes a similar salary to you and be a double-income household with a reasonable lifestyle, and then be close to earning what a FM makes.

 

For completeness, here's the math for family medicine, assuming your cost of living + tuition is 45,000 per year (25,000 tuition + 20,000 for living, rent, etc.), and then ~65,000 income as a resident, and then $250,000 pre-tax income as FM:

Age 25 (M1): $-45,000;

26 (M2): $-90,000;

27 (M3): $-135,000;

28 (M4): $-180,000;

29 (PGY1): $-115,000;

30 (PGY2): $-50,000

31 (FM): $100,000

32 (FM): $250,000

...Skip to 39 ($250,000 + $150,000 x 7):

39: $1,300,000

Amazing analysis!

I would say that for many professionals, a switch to medicine doesn't always make sense financially. We do very well in medicine and I think it's a smart financial choice for many people but it is a harder argument to make once you are already in a stable career. Never discount the ability for healthcare professionals who are eager and hardworking to move up the ranks through further education (which can often be subsidized and done part time). I'm close friends with many nurse managers and higher who have packages that many MDs would only dream of when you consider their responsibilities and hours.

Another understated point is the ability to maintain a healthy lifestyle with your partner who could also have gainful employment. I have many colleagues that have a stay at home spouse to ensure the household is somewhat functional and I can't say they are ahead of a lot of my dual-income friends.

Medicine is a great job but the road can be long. I am a big proponent of doing it out of interest and some degree of passion. If finding a secure job and a paycheck is all you are after I would say there is a good chance you could run into burnout and disillusionment in the future.

It's easy for students to say they will be average or above average in billings but now that I'm a staff I can see clearly there are people who cannot keep up the stress and the pace their entire lives and have to scale back. Worst of all I see people who did that entire stretch of training and actively dislike their careers. I don't believe that does them or their patients any good.

[Snowmen 587]

On 10/21/2020 at 2:13 AM, Bueno said:

I work and manage a bunch of R1-R5s

I'd love to see how well you "manage" a junior resident let alone an R5.

[gogogo 64]

5 hours ago, Lavarball said:

I think you're really underplaying the difference between a 85000 and 150000 after tax income. That's almost a double increase! The biggest factor would the better ability to save and having more disposable income. If you assume that the FM physician has the same lifestyle as the PA and lives on 85000 dollars a yr, that means they are able to save 65000 dollars a year!

Taking that and investing 65000 dollars a year in a broad index fund and assuming around historical 6% percent return, you would end up with a 5.5million dollar portfolio after 30 years. It would vastly outweigh the pension of 1 million of the PA plus the opportunity cost of going to med school. You are looking at around a 3 million net worth difference!

Hey, I would love to be wrong about this, because I could've pursed another career after my previous degree, made low six figures without any school debt, and called it a day. Instead, I chose med because of many reasons, one of which is that I thought it would be financially smarter. Too bad I only realized what I wrote in the other post once I got into med school....

But tell me, how am I underplaying it? I showed how the net worth is essentially equal for both careers with very simple math. The "double increase" that FM is making is simply compensation for the head-start that the PA (or any other reasonably earning professional) started making years earlier without any debt. The extra $65,000 dollars that the FM is making per year is money that the PA has already accumulated and the FM is just playing catch up.

By the way, this reasoning also applies to FM vs. other higher-earning specialties. For instance, let's say I start med at 27, and then I can choose between FM (250k/year for 33 years) vs. a surgical specialty (450k for 30 years; it's 30 years because I spent 3 extra years in residency, and that's a conservative estimate). The surgery specialty pulls ahead at 38...by $78,000, which isn't that much to me. I'd consider several hundreds of thousands of dollars to be approaching a significant difference in net worth. When does that happen? At 41-42, where the surgical specialty has ~400k more than FM. At 48, the surgical specialty is 1 million dollars ahead. But seriously, what's so great about 1 million dollars extra when you've nearly hit 50? Especially given that surgery has a much more stressful lifestyle that involves trading away every other aspect of your life. Is your freedom and last remaining youth worth trading for 1 million dollars at 50? So while the 450k salary sounds amazing vs. the "low-paying" 250k of FM, it only shows itself once I hit my 40s-50s. That's not a great trade to me.

You're right though, with the right investments, FM could pull ahead. But do you really want to justify this difficult path based on speculations regarding the stock market? The prospect of 5.5 million dollars that I can "cash in" when I'm 60 isn't that appealing. Any day of the week, I'd trade the potential/speculative 3 million dollars at 60 for a more normal youth that wasn't so high-stress and hell-bent on being academically exceptional.

What I want to stress to premeds and potential career-switchers is that you should make sure you're going into med for the right reasons. Going into it because you think it'll elevate your life beyond what you have (as long as you're in a decent place right now) is an illusion. Don't underestimate the precious value of youth, lower stress, freedom, etc. One day you'll wake up and wonder where it all went. I'm not old by any means, but now that I'm seeing my 20s come to an end, I reflect on the fact that I've spent the last two decades in school, and will do so for the next several years. If I live to my early 70s, I'll have spent nearly half of my life in school/training. This is time I will never get back and time that was full of unnecessary striving. I often envy my friends/family who took a much more normal path. Sure, I might drive a slightly nicer car, have a somewhat nicer house, be able to eat at nicer restaurants, etc. but none of those things can compensate for lost youth and the high stress that I will carry with me for my adult years as a physician. Freedom, lack of stress, time for family, a calm mind...these are the luxuries of life, not a car or house just to show off to others.

I look at my classmates in their early 20s and I think that they, like me until very recently, don't realize that we're on a hamster wheel and that this never-ending race doesn't end until we decide that it ends. We imagine that once we become staff, then we'll have reached the promised land. But, I look at the staff and so many of them are burnt out, lacking relationships with their kids, and it's tragic, because they lost their one chance at a normal life. It's not all doom and gloom, of course, many staff are happy. But I just want to emphasize to any one younger than me in this thread that it's not all about making 250k+. Like blah1234 said, many of my lower-earning friends are living great lives. I have one friend who only did college and has worked since high school. He just bought a house in a desirable GTA suburb, is living with his fiance, has a 9-4 schedule, and will soon be buying a rental property to make extra income. He's achieved this by making between 40k-70k since high school and saving diligently, and with his girlfriend making 70k, them having no debt, they are in a great place.

This is already a terribly long post, so I'll end with something more positive. We are very lucky in medicine to make the money that we do with the stability that we have and the impact we can have on people. I don't want to come off as if I'm complaining about making an income that puts me in the 1%. Just recognize that there is more to life than making an amazing salary, and that being "average" is perfectly okay and more desirable in many ways.

[indefatigable 653]

I really second this - the one thing we can never get back is time and relationships.  Life happens while we're on the treadmill, grinding through pre-med, clerkship, residency, ..  not to mention the constant uncertainty of where one will be for a longer term.  

Staff life is often better than residency, but marriages and children can get caught in the middle of continued professional and personal pursuits.

I think it'd be hard to get through medicine without at least some interest and passion, but it really does get put on a pedestal with "cracks" appearing often only as one moves through training, with growing disillusionment where all of sudden further sacrifices seem harder to justify.

 I think I've had a challenging route in more than one way (probably not worth going over here), but there's a sort of resignation that sets in when one realizes that one is simply "existing", potentially fulfilling a useful and valued role in society - without feeling personally fulfilled on almost any other level and waking up knowing tomorrow will be very similar to today until years have gone by and being almost exactly in the same place.  I imagine metaphorically being trapped in quicksand would feel similar - fully aware of one's immobility and unable to do much to change except make things worse.  

I did do something else previously - but, switching was something I more had to make, not based on calculating future potential earnings.  My route was particular and I'm not sure I would have made the same choice, but that's not something I could have known at the time.  

 

[offmychestplease 176]

-

[premed72 80]

40 minutes ago, offmychestplease said:

I started med at 25

Hey friend, I feel what you're saying, I too just started med at 25 and have these thoughts sometimes. Here's what helps for me: try not to compare yourself to others. Other people's paths really don't mean anything to you. Focus on your next goal at hand and your success will come with time. 

I always think about how I will look back at my mid 20s when im like 65 years old after a 30+ year career (probably drinking beer in the backyard too). And ask myself: "why did I worry so much back then?" "Everything turned out perfectly fine". I speak to my dad about this sometimes and he basically always tells me to chill out. I'm pretty sure he was in an 80s rock band when he was my age and he turned out perfectly fine. Bottom line, try not to get ahead of yourself or you're going to turn 50 before you're 50 (as my dad would say). 

Im just a naive first year med student but I feel like medicine is a great career and I expect it to be a challenging road with some "life delays". But id rather have those delays than have a whole life of not being fulfilled. Think about your mid 20s as an investment for a future that will be fulfilling to you for many many years. 

Cheers 

[1029384756md 16]

Chiming in as a FM staff who started med school at 21yo... what's with all the woe is me med school ruined my 20's posts? While my friends were either stuck in low-paying jobs with poor prospects or aging x10 in corporate, I got to live like a student for another 6 years and enjoyed all the good stuff that came with being a student. If I stopped aging I'd probably stay in school forever. Life is good now with more money but you know what I really miss? Playing some street ball and chilling over beer afterwards, back when we were all broke AF and couldn't afford to play golf or go on trips. Now we're all loaded with staff cash but no one has the time or energy to play pick up anymore. For those in their early 20's, staying in school with a solid high paying job at the end is a solid path to take. Lost income due to school? You'll make it back fast if you really want.

To the OP, don't switch if money is the main reason. If you enjoy learning and want a degree that opens up a whole new world of opportunities, then go for it!

[Lavarball 7]

13 hours ago, gogogo said:

Hey, I would love to be wrong about this, because I could've pursed another career after my previous degree, made low six figures without any school debt, and called it a day. Instead, I chose med because of many reasons, one of which is that I thought it would be financially smarter. Too bad I only realized what I wrote in the other post once I got into med school....

But tell me, how am I underplaying it? I showed how the net worth is essentially equal for both careers with very simple math. The "double increase" that FM is making is simply compensation for the head-start that the PA (or any other reasonably earning professional) started making years earlier without any debt. The extra $65,000 dollars that the FM is making per year is money that the PA has already accumulated and the FM is just playing catch up.

By the way, this reasoning also applies to FM vs. other higher-earning specialties. For instance, let's say I start med at 27, and then I can choose between FM (250k/year for 33 years) vs. a surgical specialty (450k for 30 years; it's 30 years because I spent 3 extra years in residency, and that's a conservative estimate). The surgery specialty pulls ahead at 38...by $78,000, which isn't that much to me. I'd consider several hundreds of thousands of dollars to be approaching a significant difference in net worth. When does that happen? At 41-42, where the surgical specialty has ~400k more than FM. At 48, the surgical specialty is 1 million dollars ahead. But seriously, what's so great about 1 million dollars extra when you've nearly hit 50? Especially given that surgery has a much more stressful lifestyle that involves trading away every other aspect of your life. Is your freedom and last remaining youth worth trading for 1 million dollars at 50? So while the 450k salary sounds amazing vs. the "low-paying" 250k of FM, it only shows itself once I hit my 40s-50s. That's not a great trade to me.

You're right though, with the right investments, FM could pull ahead. But do you really want to justify this difficult path based on speculations regarding the stock market? The prospect of 5.5 million dollars that I can "cash in" when I'm 60 isn't that appealing. Any day of the week, I'd trade the potential/speculative 3 million dollars at 60 for a more normal youth that wasn't so high-stress and hell-bent on being academically exceptional.

What I want to stress to premeds and potential career-switchers is that you should make sure you're going into med for the right reasons. Going into it because you think it'll elevate your life beyond what you have (as long as you're in a decent place right now) is an illusion. Don't underestimate the precious value of youth, lower stress, freedom, etc. One day you'll wake up and wonder where it all went. I'm not old by any means, but now that I'm seeing my 20s come to an end, I reflect on the fact that I've spent the last two decades in school, and will do so for the next several years. If I live to my early 70s, I'll have spent nearly half of my life in school/training. This is time I will never get back and time that was full of unnecessary striving. I often envy my friends/family who took a much more normal path. Sure, I might drive a slightly nicer car, have a somewhat nicer house, be able to eat at nicer restaurants, etc. but none of those things can compensate for lost youth and the high stress that I will carry with me for my adult years as a physician. Freedom, lack of stress, time for family, a calm mind...these are the luxuries of life, not a car or house just to show off to others.

I look at my classmates in their early 20s and I think that they, like me until very recently, don't realize that we're on a hamster wheel and that this never-ending race doesn't end until we decide that it ends. We imagine that once we become staff, then we'll have reached the promised land. But, I look at the staff and so many of them are burnt out, lacking relationships with their kids, and it's tragic, because they lost their one chance at a normal life. It's not all doom and gloom, of course, many staff are happy. But I just want to emphasize to any one younger than me in this thread that it's not all about making 250k+. Like blah1234 said, many of my lower-earning friends are living great lives. I have one friend who only did college and has worked since high school. He just bought a house in a desirable GTA suburb, is living with his fiance, has a 9-4 schedule, and will soon be buying a rental property to make extra income. He's achieved this by making between 40k-70k since high school and saving diligently, and with his girlfriend making 70k, them having no debt, they are in a great place.

This is already a terribly long post, so I'll end with something more positive. We are very lucky in medicine to make the money that we do with the stability that we have and the impact we can have on people. I don't want to come off as if I'm complaining about making an income that puts me in the 1%. Just recognize that there is more to life than making an amazing salary, and that being "average" is perfectly okay and more desirable in many ways.

I’m simply saying that you’re underplaying the net worth difference between pursuing medicine versus staying as a PA. The math does not add up to equal net worth, I think honestly you might be privileged to say that 3 million dollars is not something worth considering when it’s generational wealth and something most people would want to ensure a better future for their family.

 

Everything else I completely agree with, you should be considering the opportunity cost as well as the time plus stress from pursuing this. It’s so important to be passionate about medicine although if they’re a PA I would assume they do enjoy medicine. 
 

There are a lot of reasons to not pursue medicine but finances are not one of the reasons. It’s just a fact that you come out ahead the majority of time.