Doctors are more than 10 years of income behind their peers

Think about it. You spend at least four years in college, four years in medical school, and between three to seven years in residency and fellowship to actually practice medicine. If you take a year off for research or work in between college and medical school, you add a few more years into the mix. I even had a few classmates who started medical school in their late 20’s or even early 30’s!

Thus, most doctors aren’t able to generate a six-figure salary until they are in their 30’s—at least ten years behind most other career choices. A recent thread on Corporette had a few anonymous posts on net worth. One stuck out in my mind:

“$1.7mil by 37. $120k annual earnings.”

This author is unlikely a doctor because a doctor is unlikely to be able to accumulate such net worth in the short amount of time (maybe 6 years). Actually, according to the American Medical Association, a significant number (41%) of doctors have less than $500,000 in savings. This includes the 35 year old newly minted electrophysiologist and the 66 year old general surgeon who is twice divorced with three mortgages and a taste in fine European gas guzzlers. That is scary.

As top income earners in their 30’s and beyond who spent their 20’s accumulating negative net worth, doctors lose the advantage of at least a decade of compound interest. For instance, $100 accumulating at an annual 5% compound interest will have $163 in 10 years. Add a few zeros into the mix, and you realize how quickly ten years can add up.

Sure, a doctor can catch up in time, but many doctors never catch up due to lifestyle creep. Don’t let that happen to you. Follow SmartMoneyMD and learn how to get your net worth in line.

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