01 May Psychological impact of a rapid increase in income
As someone who has gone through the American medical training process, I can confidently say that it is a miserably long process. Aside from the stress from many hours of studying, challenging hospital rotations, and constant testing and validation of your knowledge, you have no real income.
In residency, your compensation is arguably not commensurate with the amount of work done. Somehow after either residency or fellowship, your income rises at least a four-fold overnight. This increase is reflected on paper before taxes (you probably lose anywhere from 28% and upward after taxes), but this potential increase in quality of life far extends beyond its monetary face value. Here are a few considerations that went through my mind during my transformation:
- You really aren’t rich [yet]. You are far behind in potential net worth than your college buddy who became a financial analyst.
- You might never become rich if you don’t live within your means. The Millionaire Next Door
has a good precautionary tale of doctors growing into their income.
- You will become rich if you plan out your investments, expenditures, and savings. It won’t happen overnight, but it can happen.
- There is no free lunch in life. The reason why your income has grown is a result of the “lost” decade that you’ve invested to become a doctor. Your job has more emotional, mental, and cognitive toil than your aforementioned college friend financial analyst.
- Burnout is a valid concern. Pace yourself.
- Retail therapy can be a coping mechanism, albeit not always consistent with your retirement wishes. Hell, you deserve that $6,000 TV, right?
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