It goes without saying that medical school is costly. The average medical school debt for 2020 graduates was $207,003, according to the Association of American Medical Colleges. In comparison to 2019 grads, this is a 3 percent increase.
If you’re thinking about going to medical school or are currently enrolled, it’s vital to know what to expect from the funding process and what your debt repayment and reduction options are.
How much debt are you in after medical school?
Including premedical and other educational debt, the average medical school debt is $215,900. The average medical school graduate has a total student loan debt of $241,600. 76-89 percent of medical school graduates owe money on their education. Premedical education debt affects 43% of indebted medical school graduates.
Is medical school worth debt?
While obtaining a medical degree can lead to a rewarding and well-paying career, it can also result in a significant amount of student debt. In 2019, the median amount owing by indebted medical school students was $200,000, according to the Association of American Medical Colleges (AAMC). Fortunately, there are plans in place…
How long does it take a doctor to pay off medical school debt?
There are no penalties for paying off student loans early, and many doctors prefer to pay down their medical school debt quickly. According to a survey conducted by employment firm Weatherby Healthcare in 2019, 35% of doctors paid off their loans in less than five years.
Is becoming a doctor worth it financially?
Going to medical school and becoming a doctor can be financially rewarding, especially if you can save and invest a significant portion of your income before retiring.
Working in the public sector and pursuing Public Service Loan Forgiveness is one option that can save you a lot of money (PSLF). After ten years on an income-driven repayment (IDR) plan, you can wipe out any remaining student loan debt.
Of course, the school you choose has a significant impact on how much debt you accumulate at the end of your studies. Many people choose to attend prestigious and costly medical schools. Choosing a more economical medical school, on the other hand, could help you lower your debt in half.
However, there are several circumstances in which medical school is not worthwhile. In a high-cost city, being a primary care physician in a private practice may not provide a good return on your investment.
It’s also not worth it if you’re not committed to being a doctor for the remainder of your professional life. Medical education is far too expensive, both financially and in terms of time, for a shorter medical career.
Medical school is not a choice to be taken lightly. It’s also a decision that necessitates your complete commitment in either direction.
Do doctors ever pay off their loans?
As a result, you should pay off your loans as soon as possible to pay the least amount of interest. This is the primary reason that 22.3 percent of doctors in our survey chose to repay their loans in less than five years.
Employer Student Loan Repayment, on the other hand, was identified as a second cause. Yes, hospitals and other physician employers may use student loan payback as a recruiting incentive. It is perfectly conceivable for a physician to have their loans paid off by their company in less than 5 years, with offers ranging from $30,000 to $50,000 each year over 2-5 years.
Loan Repayment in More Than 5 Years
Of course, not everyone wants or is able to repay their debt in less than five years. 14.7 percent of our respondents paid off their loans in 5-10 years, 5.4 percent in 15 years, and 19.5 percent in 30 years or less!
“Half of my loans were at 6.125 percent,” one doctor informed me, “so I paid those as quickly as I could.” The other half is at 1.875 percent and will be paid out over 30 years, so there’s still 20 years to go!”
Are doctors actually rich?
Many doctors and aspiring doctors wonder if doctors are wealthy. Because being a doctor is a prominent career that needs a lot of hard work and training, and most prestigious jobs that require a lot of hard work and training pay well, the general public expects that doctors are wealthy. Having a solid salary, on the other hand, is not the same as being wealthy.
Earning a good living is a terrific way to start accumulating wealth.
However, it only works if you put it to good use.
You won’t be able to create much wealth if you spend all of your earnings. If you save 100% of your money, on the other hand, you will quickly gain riches (but is that necessarily deemed rich?). (I’ll get to that later.)
Today, I’ll go through some of the things that doctors (and others) should consider to be wealthy.
How Much do Doctors Make a Month?
Depending on the speciality, practice setting, and geographic region, doctors earn a wide variety of salaries. A pediatrician in an academic context, for example, would make less than $200,000 per year, whereas an orthopedic surgeon in private practice might make well into the six figures!
The wealthiest doctors may earn millions of dollars each year through several commercial ventures such as surgical centers and office buildings.
According to the most recent physician income survey conducted by Medscape, the average primary care physician makes between $200,000 and $300,000. The average specialist (surgeon, cardiologists, etc.) earns around $300,000 per year.
This corresponds to a $20,000-$30,000 monthly income.
That’s a really decent wage!
More than enough to cover your expenses, put money down for retirement, and live comfortably.
Earnings aren’t everything. Earning a high income can help you become wealthy, but it’s up to you to put that money to good use in order to build wealth.
Income versus Net Worth
The distinction between income and net worth was one of the points I made at the outset. The term “income” refers to the amount of money you make. All of your assets minus all of your liabilities equals your net worth. What you own minus what you owe is your net worth. I believe that a person’s net worth is a more accurate measure of their overall wealth.
The writers of The Millionaire Next Door divided people into two groups: Prodigious Accumulators of Wealth (PAWs) and Under Accumulators of Wealth (UAWs) in their book.
They discovered through their research that doctors are among the poorest wealth accumulators based on their earnings.
That is, when compared to other professionals with comparable wages, doctors have the poorest net worth.
Schoolteachers, on the other hand, are among the best savers of money when compared to others with similar wages. As a result, their net worth is frequently more than predicted.
If you make accumulating wealth a priority, a high salary might translate into a large net worth. Even if you have a low income, you can build up a sizable net worth if you emphasize saving over spending.
If all other factors remain constant, a schoolteacher who saves $10,000 per year will have a higher net worth than a doctor who saves nothing—# Math.
The doctor who prioritizes saving will be able to earn riches quickly and build up a sizable net worth over time.
Many doctors commencing practice today should be able to retire with a net worth of more than $10 million if they so chose. It won’t be easy, of course. Along the process, sacrifices will be required. It is, nevertheless, extremely achievable.
You could believe that $10 million is far more than anyone needs in retirement.
Inflation-adjusted, $10 million in 30 years will be the equivalent of $5 million now.
If you have $5 million today, you can live on around $200,000 per year (before taxes) for the rest of your life without worrying about running out of money.
For many folks, this is sufficient.
However, some doctors spend $25,000 each month after taxes, implying that a salary of $200k per year will not suffice.
Some of you reading this will require more than $10 million in the future to maintain your desired lifestyle.
Start putting money aside right now.
How Rich Are Doctors?
This is a tricky question to answer. Doctors’ wealth, or lack thereof, is highly dependent on the individual.
If you look at a normal resident, you’ll see that they’re among the poorest people on the earth.
They are, in fact, the poorest people on the earth.
I can’t think of another group that consistently has a lower net worth than residents.
The average resident I speak with has a net worth of roughly $200,000, according to my calculations.
Negative.
On paper, the homeless person on the street asking for money is wealthier than the typical resident physician!
Student loans are a form of debt.
Currently, the average medical student graduates with a debt of more than $200,000 in student loans. By the time the residency/fellowship is completed, the average salary will be over $250,000. The higher the student loan interest rate, the longer the training duration.
There are a few exceptions to this rule. Some locals are lucky enough to be free of student debt. Others have high-earning spouses and begin aggressive debt repayment while still in school. Some even discover ways to live as cheaply as possible during their training years in order to pay off their school loans.
Most doctors, on the other hand, have a negative net worth until they’ve been in practice for a few years. After a few years of practice, many doctors are able to pay off part of their college debt, save money for retirement, and most likely have some equity in their home.
How rapidly one goes from negative to positive is determined by one’s desire and income. You can advance more quickly if you earn $400,000 per year than if you earn $200,000 per year. Math once more.
Persons earning $200,000 per year, on the other hand, are making more progress than people earning $400,000 per year!
#Priorities. You will run in place if you squander all of your money.
Doctors who have been in practice for longer are more likely to have a higher net worth than those who are just starting out, as they have had more time to save and pay off debt.
In fact, Medscape conducted a thorough poll of over 20,000 doctors on physician wealth.
Their findings can be seen in the Medscape Physician Wealth and Debt Report 2021.
It’s well-organized and presented in easy-to-follow slides.
What did they discover?
About half of the doctors polled have a net worth of less than $1 million. However, half of them are worth more than $1 million (with 7% worth more than $5 million).
It’s also no surprise that the specializations with the highest earnings have the biggest net worth.
Doctors who are younger have a lower net worth than those who are older.
The survey findings have produced a number of intriguing slides.
I strongly advise you to take a look at it.
If a physician retires today with $2-5 million in the bank, he or she will be able to maintain a decent lifestyle.
What if it’s less than $2 million?
They’ll be able to manage, but they won’t be able to live the usual doctor’s life.
Comparing Yourself to Others
When you compare yourself to others, you may never feel wealthy. It’s unlikely that you’ll ever be the highest-paid doctor in your community. It’s improbable that you’ll reside in the neighborhood’s largest home. In the doctor’s parking lot at the hospital, you’re unlikely to have the most expensive automobile. You’ll have buddies who go on trips that are more exciting than yours. Some of the doctors you know will have spouses who are more attractive than you. You’ll never have the same number of Instagram followers as one of your colleagues. Your children will not be the best athletes in school, will not receive the highest grades, and will not attend the most prestigious college.
You might tick one of those boxes, but someone else will have you beat on the others.
When comparing your life to others, you must use caution.
It’s quite difficult not to.
We’re all human, and we measure our achievement in comparison to others.
When you’re watching Usain Bolt sprint alone, it’s difficult to determine how fast he runs.
It’s only until you put him in a race with other extremely fast people that you realize just how fast he is.
When it comes to personal economics, though, you must be cautious about comparing your life to that of others. You can really take your own money out of it – just be careful when comparing yourself to others. For one thing, unless they’re telling you every last detail about their money and lives, it’s unlikely that you’ll ever get the whole context when comparing your finances to theirs. Second, what is essential to you might not be the same as what is important to them.
How Do You Define Rich?
The term “rich” is a relative one. You can live like a king if you have $500,000 and reside in a third-world country. That is something that some people do. They work hard, save their money, and go to a low-cost country where they can live comfortably. It’s a simple and quick way to get fatFIRE!
But, for the purposes of this blog article, imagine that the majority of American doctors wish to stay in the country indefinitely and live happily by American standards.
Geographical arbitrage does exist.
The example of a third-world country given above is an extreme form of it. However, the quantity of money needed to feel wealthy in San Francisco, CA, is significantly more than the amount required in Memphis, TN.
Some people define wealth as having more than their peers. However, as we stated a moment ago, this can be counterproductive to overall pleasure because you’ll almost certainly never be the wealthiest person in the room.
Others may define wealth as having all of the crucial things in life that they desire. Consider that for a moment. Having all of the things that are vital to you.
When most people are asked what is most important to them, they frequently respond with the same set of responses: family, health, control over how I spend my time, and so on. Having a lot of money, on the other hand, isn’t frequently on that list.
Some of my clients have more money than they know what to do with, but they refuse to spend it or enhance their lifestyle.
We’ll pleading with them to take a more luxurious trip, travel first class, or replace their duct-taped 20-year-old car. Instead, they are fully satisfied with what they have and how they live.
It’s crucial to find a way to be content.
When you concentrate solely on what makes you happy, you begin to see how insignificant most of the rest of life is.
How Much Money is Enough to Feel Rich?
To balance things out, many doctors, especially those in their later years of practice, will be wealthy by most standards. The median net worth in America, according to a Federal Reserve analysis, is around $121,000. Most doctors will surpass that milestone within a few years of practice. According to Credit Suisse’s Global Wealth Report, more than half of physicians have a net worth of more than $1 million, whereas only 7% of the overall population has a seven-figure net worth.
Doctors, on the other hand, do not compare themselves to average Americans.
Doctors make comparisons to one another.
Do you want to start feeling more wealthy? Drive through a working-class neighborhood. Better still, move to a working-class neighborhood. Send your children to a public school where half of the students receive free lunch and can’t afford to spend spring break in Hawaii.
Keeping up with the Joneses is a two-way street.
If everyone in your new neighborhood drives a beat-up car with at least 100,000 miles on it, driving your recently leased Mercedes will make you feel humiliated.
The purpose of this piece isn’t to make you feel bad about your good fortune. Instead, I had two goals in mind: 1) provide you with some hard data on how wealthy doctors are. And 2) encourage you to focus on yourself rather than on others.
Don’t be concerned about the people around you. Instead, concentrate on yourself, your objectives, and what matters most to you, and you will be able to live your most prosperous life.
Is med school harder than law school?
You’re probably aware that law school is difficult. Someone else, however, claims that medical school is more difficult. Law school is more difficult than medical school.
Can you go to med school without debt?
However, they also claim that 29.9% of medical school graduates graduate with no debt! Is that even possible?
Despite the fact that the average medical school student loan debt is $200,000, over 30% of students finish debt-free. Students can graduate debt-free by using a combination of smart choices, scholarships, work, and family support, among other methods.
What is the average GPA for med school applicants?
Admissions administrators must make some initial screening judgments based primarily on GPA and MCAT scores due to the high number of medical school applicants they must sort through. In 2017–2018, medical school matriculants had an average GPA of 3.64 in science, 3.79 in non-science, and 3.71 overall.
What is the cheapest medical school?
These are the ten cheapest medical schools in the United States, according to AAMC data, if you want to save money on medical school tuition and fees.
How much does it cost for 4 years of medical school?
According to a fall 2020 report released by the Association of American Medical Colleges, the median cost of four years of medical school attendance in 2019-2020 was $250,222 at public institutions and $330,180 at private colleges. According to AAMC data, the Class of 2020 graduated with an average student debt of roughly $207,000, and one study indicated that expenditures have climbed on average 3 percent -4 percent yearly over the last decade.
