Tag: money

How would wealth impact your life trajectory?

Posted on by SmartMoneyMD

I frequently wonder how my career trajectory would have mapped out if I knew at a very young age that I’d be financially set no matter what I did. Would I have busted my ass to get a high paying job if I were already financially independent?  Would I have dedicated my life to philanthropy?

Who knows. I’ve met plenty of people in my life who clearly have had various degrees of family wealth. Like the guy I knew in college who was neither a genius nor a hard worker who still got into medical school. I didn’t realize that he came from serious means until his parents cut him a $2 million check when he got into medical school.  Sometimes you can’t actually tell whether someone’s lavish lifestyle is due to wealth or simply egregious extension of their credit lines.

I always figured that if I had the preordained luck to be born into wealth, I wouldn’t have tried so hard in school.  Over the years, I’ve come to realize that the answer may not be as simple.  If I were fortunate to have inherited a family fortune, would I really want to feed off the fat? Or would I have the ambition to build on that wealth to make a name for myself?  Should I just work just as hard and find my true passion? That is a much higher level decision to make than simply working hard to put a roof over your head.  There is a reason why some of the wealthiest people I know still chose a challenging career in medicine.

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You can work and play to you true ambition if money is out of the equation.

I tend to view our life choices as a conglomeration among three needs: (1) fortune, (2) fame, and (3) happiness.  It’s challenging to have all three, but coming into the world with fortune will get you a head start on life.

You can’t have it all.

If money were not a problem (fortune), I probably would have ordered take-out a lot more often and saved myself hundreds of hours of cooking during medical school (happiness). Those hours could be been better spent studying, exercising, or even socializing.  Perhaps that would’ve enabled me to pursue a different specialty in medicine. Would I have chosen a less lucrative profession? Would I have chosen a lower paying but intellectually stimulating job (fame) in a higher cost of living city?

I think that the wealth factor definitely influences how one goes through life. I like to look at it in phases:

Money is awesome phase: This is presumably realized in childhood. Any toys, vacations, foods, or material goods can be had without consideration of cost. This is where bad habits can be ingrained.

Money is a tool phase: As you get older, you start to realize that you can purchase favors or amenities to get ahead in life. Private tutors. Exchanging cash for other people’s time.

Seeking purpose: Everyone experiences this. You try to figure out what you want out of life. Careers. Wealth influences your career choices too. This is where you try to figure out what you ought to be doing to become happy.

Money is a tool again phase: You go about your career with highs and lows. Wealth can be used to ease the daily grind.

It’s clear that wealth can certainly put in an advantageous position to be happy, but wealth can’t guarantee happiness. Had my financial situation been different in childhood, my life trajectory would have been different, but I think that my level of content with my life choices would likely be the same.

Have you pondered these scenarios before?

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Work is still bad for your health

Work is still bad for your health

Posted on by SmartMoneyMD

Over the past two months, my work has been on a tear in a not-so-good way.  I’ve been clocking more hours than I ever had in my attending career.  The time I spend in the office and operating room is more intense than ever.  Ironically, I doubt that the hard work will even translate into additional year-end income.  The rationale behind such irrational aspects of medicine can only be partially explained through a PhD dissertation, but this is the life of medicine that we’ve signed up for.  Now, this post isn’t intended to be a rant session, but it does serve as data for me to reflect upon.

Longer/Strenuous Work Hours = Less Time Off

We only have so many hours in a day.  You have to rob Peter to pay Paul. Longer hours for me means that I have less time with the family, less time to clean the house, and less time to devote to the Smart Money MD website. More strenuous hours also mean that I am more exhausted when I get home.  Caffeine can only get you so far, so many of my evenings have been entirely unproductive or degraded into menial tasks like dozing off while having the television on.

Long-term this can’t be good for the psyche.  Unless you really love your job.

Someone else benefits off of your labor.

In the field of medicine, we try to cure diseases.  The more time you spend working in medicine, the greater number of people you will help. Helping people alone is a powerful feeling. I am happy every time I am able to help someone out with my medicine knowledge.

But medicine isn’t all for altruism.  We get paid to help people too.  And that pay isn’t necessarily bad.  A good paycheck is useless if you don’t have the time to enjoy it.  If you spend the bulk of your time at work, who exactly enjoys your hard-earned dollars?

No, we shouldn’t blame stay-at-home spouses or the kids! A physician’s family by default signs up for both the pains and joys of the physician member. I know plenty of partners and spouses of physicians who have equally challenging or more demanding jobs than they do. But family members also have to deal with missed recitals, holiday events, family gatherings, and other joys of being with friends and family.

The truth is that I’ve seen plenty of physician households that enjoy luxuries that probably don’t afford a significant increase in happiness and otherwise wouldn’t have been chosen if it weren’t for a good income.

Things like getting a $120,000 car instead of a $30,000 car for a four-person family. It’s bad when your trunk release in your expensive car fails to open and all of your fancy groceries spoil (yes, true story).

Image that your $100,000+ car is holding your $150 steaks in the trunk hostage in the dead of the summer.

Or getting a house so large that you need three hot water heaters in order to supply all of the faucets.

Or buying into a subdivision that requires a well-maintained lawn with grass even though you live in a drought-stricken area?

You end up throwing money unnecessarily to solve problems.

In keeping along the lines of the scenarios above, I’ve seen busy doctors throw money at their problems simply because they don’t have time to deal with them.  Ordering take-out more than four times a week is one example.  I’ve had another colleague who ended up paying for an entire hot water heater system (his was like 4 years old) because the first plumber told him that replacement was the only fix!

All of these scenarios have played through my mind as I’ve stayed late at work these past few months.  Is that something that I truly want to deal with long term?

It does, however, sound like a reminder how important maintaining your financial health is to our future.

(Photo courtesy of Flickr)

How much do you love money?

Posted on by SmartMoneyMD

This is a loaded question.  Most of us opted for a career in medicine not because of the money.  I knew that doctors made a decent living when I considered applying for medical school, but my main goal for becoming a doctor was to be able to do something really cool.  Cool stuff like saving lives or eradicating disease.  Activities related to money were not on the radar.  Tax lost harvesting? Indexing? No way! As a doctor who went through the hellish initiation process of medical school and residency, I should be immune to dealing with the toils of real life!

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Boy I was so wrong.  You can lose out in life if you don’t know how to control your finances. Guys like RootOfGood, Retireby40, and FinanciallyAlert are the smart ones who got it right early so that they can enjoy life.

You can make a lot of money as a doctor.

Herein lies the fallacy.  Just because you can make a lot of money in the medical profession doesn’t mean that you will.  It certainly doesn’t mean that you will get rich either.  I’ve met too many middle-aged doctors who have taken one too many fancy vacations and funded their kids through one too many private schools.  I’ve met plenty of doctors who end up taking poorly compensating jobs in highly desirable places. Both of these situations aren’t conducive to building a solid net worth.

I blame the salary bump that we all get after residency.  I tripled my income after fellowship.  Sounds amazing, but I probably should have increased it by a six-fold instead if I had picked a smaller town to live in.  Nonetheless, this significant jump in income plays tricks on you.  It makes you feel really rich even though you are not.  You have to pay taxes to Uncle Sam for having such a high income.  And Uncle Sam doesn’t really care if you have a negative net worth either.  It hurts to pay high taxes on everything while you still have a negative net worth.

Realizing that the medical system puts doctors at a huge financial disadvantage has actually helped me pay more attention to finances and money.

Doctors generally work pretty damn hard.

This is also a problem.  The nature of medicine puts doctors at a financial disadvantage. The long hours that doctors have limits what can be done outside of work.  If you work from 6am until 8pm—my friend Moe often works even longer hours—you aren’t going to have time to shop for discount groceries or cook dinner.

As much as I like Tikka Masala, I will rarely have the time or energy to cook it myself like Justin @RootofGood is able to.  (j/k)

All joking aside, most doctor lifestyles aren’t conducive to saving money.  And we all know that savings rate is a key component in building net worth, especially early in your working career.  The doctor with long hours is more likely to order take-out, have a housemaid, hire out lawn services, and take fancy vacations to compensate for the challenging lifestyle. That’s human nature. It’s not possible to run at high gear all of the time.

For these reasons, I’ve learned to respect money. We work long and strenuous hours. It’s easy to burn through our earnings relatively easily due to the stress of our work.  My long term goal has been to find a work arrangement that is conducive to a reasonable work-life balance with adequate compensation.  Not easy, but it should be a goal that all of us strive for.

You can work as hard as you want.

There are a lot of ambitious people out there. The great thing about our society is that ambition, hard work, and a bit of luck can get you far in life. Without a doubt, you can earn more if you work more. I know some doctors who work two jobs.  They like it. I know surgeons who operate while they are on vacation (they are licensed and take some locums opportunities). I know some who take time to do more medical work in charity. If the money is good and your health is good, you can theoretically work until you croak.

Don’t keep rolling that rock up the hill if you don’t know what’s going to happen next!

Make sure you have an end goal in mind.

It’s important to reassess your goals frequently. If money is what you want, then just work harder and spend none of your hard earned money. Otherwise, figure out what you really want out of your day, week, year, and life. Where does free time come into play, and how much of this can you control? When you are considering your financial goals, think about how much you actually need, and how much your heirs would get out of your excess earnings and whether that would even be beneficial to them.

(Photo courtesy of Flickr)

Do doctors even need to have ancillary income?

Posted on by SmartMoneyMD

We focus a lot on finances and keeping realistic lifestyle standards on this website.  As doctors, we are privileged to have a relatively high standard of living compared to the rest of the population.  Of course, this does come at a price of a long incubating period before doctors “become” useful and a relatively high level of stress in our work.  What is important to realize is that despite a nice paycheck, doctors are far from immune to financial ruin and bad decisions.  Much of these bad choices come from generalized overspending and bad investment decisions.  I remember seeing an oncologist in my hometown open a Baskin Robbins and Popeye’s fast food establishments only to have them close down after a few years.  Just because you can cure cancer doesn’t mean that you can run a fast food business.  But hindsight is 20/20, as they say.  If you are going to hit it big, you’ve got balance risk and reward while adding in a touch of luck.  If I truly had that formula, I’d be selling it through my informercials.

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Diversification protects us from obsolescence.

I’ve long believed in branching out our revenue stream. It doesn’t ever seem wise to be a one-trick pony in income generation.  What if a younger, better version of yourself comes along to take your job? In middle school, I remember seeing kids trade baseball cards.  Sometimes the trades involved cash, but only in small amounts.  After all, 5th graders were limited to allowance money.

Later, Magic: The Gathering cards came about and kids started trading and selling those.  It was a mini-economy.  I remember that there was one kid who seemed to have the most valuable cards that everyone else wanted.  The kingpin.  I always considered that kid to be a successful entrepreneur until the game fell out of fashion, and no one wanted to buy any of his cards anymore.  Amateur.  He should have diversified.

If you didn’t protect your trading cards from Kool-aid spills, your investment could be worthless!

You might also like: Why every doctor needs a side hustle. 

Unfortunately, most people never diversify either.  Most doctors I know certainly put all of their eggs in one basket.  Myself included.  Most of the time we just don’t have the time, energy, or interest in diversifying income.  The people I know who actually do really love money.  Sometimes more than their families. The rest of us just buy disability and life insurance and move on.

But having ancillary income isn’t necessarily a bad thing.

What is even better than income diversification is passive income diversification.  Who doesn’t love passive income? (That’s you @PassiveIncomeMD!)  Many doctors I know buy real estate, flip homes, write books, and even host wine tastings as means of additional income.  Some of it is passive. Others seem far from passive.  Many of these options do bring income outside of their primary occupations.  Who knows, at some point your hard work will actually pay off.  The book you wrote that you spent months away from your family can actually produce a lasting income stream for years. Think of it like paying it forward with delayed gratification.

Bullshit! I trained 12 years to become a thoracic surgeon, and you want me to flip used furniture on Craigslist on my hours off?

Point well taken.  You have to look at the situation in two aspects:

1) How much time do you have to spare? What are your family obligations? If you spend that extra 5 hours per week writing an ebook after being at work for 85 hours that week, will your wife divorce you? How much do you like money? How much potential earnings and gratification would you get for doing extra work?

2) Will this ancillary business venture affect your primary income stream? You see this as a recurrent theme in Shark Tank.  You have bustling entrepreneurs who aren’t willing to quit their day job yet but have potentially groundbreaking businesses that need more dedication. Which one do you choose?

You have to look at what your passion lies.  The anesthesiologist who spends his residency looking at foreclosures clearly has a passion in real estate (not in medicine).  If you are a thoracic surgeon who spent twelve years of your life to learn about cracking open chests, you’ve probably found your passion.  You probably don’t want to (or need to) find a side hustle.

Doctors really don’t need to have supplemental income. 

This goes back to my main premise—doctors don’t need to have ancillary income outside of their jobs.  We work relatively hard in our primary jobs, and make good money.  Just because some doctor you know from the hospital brags about flipping homes in his spare time doesn’t mean that you do too.  Likewise, just because some doctor blogger on the internet starved himself for two years to pay off some egregious amount of student loans doesn’t mean that you do either.

You just have to know what is important to you, play your cards strategically, and fold when you have a bad hand.  If you have a potentially lucrative hobby, you can decide whether it is worth your time to venture into commercializing it.  If not, you can still be a successful doctor even if you are a one-trick wonder.

How would your life change if you earned an extra $100,000 a year?

Posted on by SmartMoneyMD

I’m sure all of us have either wondered or openly discussed the prospects of having a higher income.  We’d actually be able to “afford” those outfits that the celebrities sport or cruise into the hospital parking lot with that dream car.  On a smaller scale, perhaps we could choose to have more meals out in restaurants or splurge on a nice vacation that would otherwise be lengthen your working career.

Interestingly, being a physician actually awards us the experience of incremental income growth over many arduous years. We start out in debt during college and medical school, build up to a positive but meager resident income, incur a potentially lower income as a fellow (Yes, this can happen!), and finally a decent but questionably delayed higher income.  How does that affect the psyche? Let’s take a look:

 

The guy who becomes unleashed

We’ve all seen this.  There are people in medical school who always seem up for a round of drinks at the bar or a hedonistic winter vacation.  Obviously these guys are either funding their lifestyle through family money, a spouse, or loans.  Once they secure a solid five-figure income during residency, they spend as if they had a six-figure income with a seven-figure net worth.  The expenditures grow at every step of the trajectory.  The present lifestyle is essentially supported by future income.  Can this be sustainable? Absolutely if the future self makes good on his earnings.  I know a guy who did just that.  He is doing fine, but working like there is no tomorrow.

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Ironically, this model of lifestyle represents much of our society.  That is why there is so much consumer debt and how credit card companies survive. If this guy earns another $100,000, I frankly don’t think that he’d change much of anything to his lifestyle.  He is already on a mortgaged lifestyle.  A pretax increase of $100,000 in income may only mean another $55,000 of post-tax take at the higher federal and state marginal tax brackets.  This welcome addition might mean additional frivolous purchases in someone with already frivolous spending habits. Nothing else.

The ultra spender can pick up one of these the first year she has a salary bump.

The ultra-saver

I think that most financial bloggers out there are in this camp.  The debt-adverse, ultra-saving, crazy bunch prefers to stash away everything towards retirement.  This camp of doctors were frugal during medical school, residency, and are still living the conservative lifestyle.  These guys just like watching their Personal Capital accounts build up, gloat when their investment accounts actually increase after several years of retirement with 4% spending, and take extended month-long family vacations since they are not beholden to any boss after retirement.

You could imagine that a windfall of an extra $100,000 might not impact the habits of this camp either.  This extra income is going straight to the bank or index fund of the ultra saver.  Give it some ten years, and the bank of ultra-saver will have an extra $1,000,000.  If invested prudently, this additional income can shave off a few years of your working career, or fund some great charities.  Either way, the lifestyle of the ultra-saver doctor isn’t going to change with a salary bump of $100,000.

I wished that I could be in this camp, but I’ve unfortunately been tainted with a moderate desire for materialism, overpriced foods, and luxury.  ?

Ultra savers log into their Personal Capital accounts several times a day!

The average middle of the pack doctor

Most doctors are in this boat.  They have a higher-than-average income compared to the rest of society, but they aren’t in the ultra-celebrity net worth range.  A salary bump will likely have an immediately positive impact on her lifestyle.  It can be used to pay down some student loan debt, contribute to a mortgage downpayment, or fund a well-deserved vacation.

An extra $100,000 income can be used as a temporary patch for an immediate need.  After a few years, your lifestyle will either transition to a higher baseline, but it’s unlikely to make a significant impact on happiness, lifestyle, or your hobbies.  There will be a new steady state, but the steady state will still be in the same tier as the doctor of ten years prior.

 

The percentage change in income is what counts.

In all three scenarios, an increase of income didn’t really change much of anything.  For the average doctor, a $100,000 salary income could represent anywhere between a 10% increase in income to a whopping 100% increase in income (I do feel sorry for those doctors out of training who slave at a $100,000 income).  Either way it’s not enough to quit your day job. How much would it have to change to make a meaningful difference? 500%? 1000%? Either way, most doctors aren’t going to reach that level of change.

To this end, doctors need to realize that any narrow range of income that they may fall under may not necessarily impact their lifestyle in a significant way.  A Hospitalist can double her shifts to bump up her income from $200,000 to $400,000, but working harder would be best suited if there was a goal in mind.  Do you want to retire earlier? Do you want to buy a nice stove? Is it worth the stress of putting in the extra shifts? Figure these questions out, and you’ll be a happier person.

How much of a salary change would it take to change your lifestyle?

(Photos courtesy of Flickr)

Are you turning away millions of dollars as an academic doctor?

Posted on by SmartMoneyMD

After doctors finish their medical training, there is a spectrum of career options that range from full-time clinical medicine (which most people choose) to full-time academic medicine to full-time researcher. Whichever path one takes will surely benefit society, but can have a major impact in compensation. Over the course of one’s career, there is unfortunately a huge discrepancy in earnings.

Think millions of dollars.

Or for you gamblers, it’s like getting to the final table (guaranteed $1 million earnings) of the World Series of Poker every few years, but donating your earnings back to your hospital administrators. These administrators then make you work harder for less pay.

Sounds fair, right?

Let’s take a look, step-by-step, at how there can be such a discrepancy in earnings despite being the same type of doctor.

 

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How doctors generate revenue in private practice.

As a doctor involved in direct patient care, you generate revenue directly from your services. The more services you provide, the greater revenue you bring into your practice (or your employer). For many doctors who participate in insurance plans, this is measured in revenue value units (RVUs) or something similar—anesthesiologist work is measured in ASAs, which are calculated on the difficulty of a type of surgery and modified by the duration of a surgery.

 

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Even doctors who don’t participate in direct patient care—that means you, pathologists and radiologists—have productivity that can be quantified.  Additionally, there may be other factors in physician productivity that aren’t directly quantifiable, such as the number of consults that are generated and procedures that other specialists perform on patients that you cared for who otherwise wouldn’t have received treatment. If you look into capitated care models, managed care models, and closed-system models, the revenue streams becomes even more obfuscated.

 

No matter how confusing this may seem, medicine in a private practice model is still service-driven. The more you work, the more money you bring into your practice or your employer. Hopefully this work translates into a higher income for us all.

 

How doctors generate revenue in academic medicine.

If you are a physician in an academic center or university setting, the revenue generating component is more opaque. I look at it like a black box:

No one knows what happens inside the black box, not even the administrators!

The service portion of being a doctor in academic medicine is diluted into many different roles. Some of these roles aren’t directly related to patient care, so any revenue that is generated doesn’t go through the typical insurance panels.

Take, for instance, research. This is a very valuable component to the healthcare industry, but there is no visible compensation in research unless there is a breakthrough discovery. Research funding in the U.S. comes mostly from the National Institutes of Health (NIH). Most researchers have to apply for funding through an arduous process every few years!  The funding that one receives through a research grant is unlikely to even cover your salary!

Teaching medicine is another example where the income stream is not clear cut. Insurance companies pay you for taking care of their insured clientele, not for educating future doctors.  It doesn’t matter if you’re taking full liability for a full inpatient service, presenting grand rounds, or writing a case report.

Let’s compare a specialist working in academic medicine with one in private practice.

Suppose that you are a vascular surgeon who decides to work at a teaching hospital. You have a faculty appointment at the medical school but you are primarily a clinician working 85 hours a week. The call schedule is only once every five weeks, but you get called in every time you are on call (hey, ruptured aneurysms wait for no one!). You also spend time teaching medical students, residents, fellows, and prepare grand rounds cases. Your hospital pays you about $500,000 a year, but your salary is essentially capped. That means that you’ll likely be earning the same take after five to ten years on staff. You’re making big money, but you’re also spending a lot of time at the hospital.

If you decided to leave the university setting, there are a number of options that could materialize. You could join a hospital group, get paid a much lower starting salary than what the university might actually offer you, but build up to that $500,000 a year. You’d still be working those 80 hours a week. The difference is that by not being involved with teaching or research, you might actually free up a few extra hours a week. No bad, eh?

 

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A third option might be to join an office-based vascular surgery group. You might be brought on board with a salary lower than what you might get at the university, but there is room for growth. After several years of servitude, you purchase into the group and build equity in the equipment. There is an angio-suite that you own along with the practice. You are still working those 80 hours a week (yeah, what a brutal subspecialty), but you bring in a cool $1.5 million each year.

Think about it. A vascular surgeon can have a $1 million income difference depending on where she decides to work. I’ve actually seen situations where the income differences are even greater. Now we’re talking serious money.

What’s the moral of this story? Vascular surgeons have tough jobs!

 

It’s not about the money! 

Look, life isn’t all about the money. Some of us don’t enjoy yachting on the weekends or having caviar every night.  Some of us who do may even be fortunate enough to have alternative sources of income.  Our happiness levels start to plateau after a certain amount of income and net worth. I like to think of it like this:

Your happiness actually increases if your income potential is hopeless, but happiness will also plateau with increasing income.

For some doctors, academic medicine is a means to pay the bills AND be happy. What is not to like about conducting research that could potentially revolutionize healthcare or simply educating future generations of physicians?  Some of us actually enjoy writing and editing scientific manuscripts.  Academic institutions are structured to allow doctors to do just that.  These roles may not necessarily maximize a doctor’s income potential, but they contribute to society and personal satisfaction. If you would like to put a price on that, state your argument in the comments section below. 😉

 

What should I do if I’m undecided?

There’s not going to be a magic ball that tells you what to do. I know plenty of doctors who left academic medicine after several years when they needed a change. I also know several doctors who decided to enter academia after many years of pure clinical practice. The doors remain open no matter what decision you make early in your career.

Remember why you entered medicine; I hope that it was to care for patients. At the end of the day, you still need to be happy. However, it doesn’t hurt to consider the financial implications of your decisions.

How did you decide between academic and purely clinical medicine?

Ways to generate ancillary income as a doctor

Posted on by SmartMoneyMD
Expert side hustler

Diversification is a path to reduce risk. This applies not only to our investments, but also our income. As doctors, we are sort of like one-trick ponies. I pretty much only do a handful of procedures and clinic-related activities. Most doctors are paid based on their clinical productivity.

If you are injured and cannot perform your typical duties, you are screwed. Sure, there’s disability insurance, but the cost of coverage does balloon up for most doctors in mid-career. Many of us pay almost a full month’s salary towards disability premiums in order to cover one year! This is not insignificant especially if you are trying to repay loans or build up a nest egg.

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What can doctors do to diversify their income?

Keep your primary profession

Okay, so this isn’t diversification, but it does boost your income stream, allowing you to have more to invest.  The easy option is to do what you are already doing. You can rarely find something outside of your medical profession that can offer you a similarly high hourly rate. And it won’t be anything new that you’d be doing compared to your primary job.  Add some shifts if you are a shiftworker. You can opt for locums opportunities or moonlighting (working a second part-time job) if your primary employer allows for it.

Some radiologists that I know actually do locums opportunities when they’re on vacation! There are many primary radiology jobs that offer significant amounts of time off. Sometimes family schedules prevent you from taking off for vacation (spouse’s job or kids’ school schedule)

One of my friend’s spouse is an ER physician. He lives in the Bay Area, but actually has several part-time options in the midwest, where reimbursements are higher!

 

Do things that are peripherally related to your career

I frequently receive surveys conducted by medical consulting firms with monetary compensation. Sure, the surveys will never replace your day job, but it can bring in another $50, $100, or even more depending on how involved the questionnaires are, and how well research in your profession is funded. I have noticed that professions that utilize medications more frequently will have more options for medical research related survey work.

Speaker fees: Let’s say that you are an expert in G6PD deficiency. There is a new medication on the market to treat it, and the company needs experts to vouch for their product. Yes, you will become a shill for a faceless corporation, but you can get paid for giving a talk. You won’t get rich off of these events, but it does add ancillary income.

Consulting: Likewise, you can either be an expert in the science or an expert in the process of certain treatments or specialties. You can start your own company and offer your technical knowledge of a particular subject. I have seen full-time clinicians start side consulting businesses, only to transition to them full-time when they become busier!

Find occupations outside of your primary career

I once met a doctor who ‘retired’ from clinical care at age 42 to start his financial corporation. I’m not sure what he actually does, but perhaps he sells insurance vehicles or offers wealth management services.  That’s a significant 180 degree change, but I guess he likes what he is doing and is probably good at it.

From seeing what other money bloggers out there are doing for ‘side hustles’ or ancillary income, there is a wide range:

Food delivery / messenger: Delivery services like Postmates, UberEats, and other startups need drivers and messengers for the lazy! I’m not sure what the going rates are for messengers, but based on the pricing for customers, I’m assuming that one could command anywhere from $10-$15/hr depending on your region. @financialpanthe has reported doing this on his free time, and also the consequences of looking like a lawyer in the process! Kudos to him. I would assume not to risk running into my patients while I was making a delivery.

Uber/Lyft driver: This is the foundation of food delivery. I suppose that this is a fun way to meet interesting people while making some money. Sam @FinancialSamurai appears to have an interesting arrangement to activate his Uber activity whenever he wishes to drive across town to run an errand anyway. Nice. It is also less stressful since he already has multiple income streams that don’t require a set time commitment. Would I want to pick up an Uber passenger on my way to work? Uh, probably not.

 

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Real Estate: This is a big one. If buying your shares of VNQ (substitute your favorite REIT) isn’t active enough for you, you can invest in the real estate market. Plenty of money bloggers deal with real estate, like @FinancialSamurai @RetireByForty and others. There is definitely more involvement (or headaches) in real estate, but you can leverage your investments and generate significant cash flow while having a physical piece of investment property.  I certainly have not had the energy to dive into the real estate market, although I would be willing to venture into this source of income if the right opportunity comes around.

Online sales: eBay, Amazon, and Etsy will have you covered. If you have a source of items that other people might want (like your handmade Russian-style finger puppets), you can have a wide audience with limited initial investment. There is still a cost of time involved in the sales process that can be time consuming. Remember, as a doctor you are trading your time and skills at a relatively high hourly rate for your services. If you are making online sales, you are doing the same thing at a lower rate. But hey, diversification is diversification.

What other means have you discovered to generate ancillary income?

(Photo courtesy of Flickr)