Smart Money MD

One of the guest speakers at this year’s World Domination Summit, was Pete Adeny, of Mr. Money Mustache fame. You can watch the talk online, but MMM essentially summaries his venture into reducing the excesses of life and how it allowed him to transition to early retirement around the same age I finally finished my fellowship training and started my career.

I’ve been a longstanding reader of his online ramblings, and have admired his willingness to carve out his own path off the typical career trajectory that most of us go through. It is also amazing that his trailblazing career decision has gathered a significant following online. Mustachianism, as his “followers” call the mindset, has been an inspiration for me to take a step back and analyze what is important in my life and what I actually need to have to be happy.

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I didn’t really consider that this approach to life actually works for doctors until I saw other like-minded physicians like White Coat Investor (WCI) and Physician on Fire (POF) cropping up in the online world. These guys live a frugal approach to life just like MMM. Great! You CAN be a high-income physician and still be practical!

Is that really true?

I began to wonder where the average doctor falls in the spectrum of luxury, and where I fall in this spectrum. Can this work for all physicians living anywhere in the country? Doctors like WCI and POF live in Utah and the Midwest, respectively. I grew up in the back woods of the Midwest, and I’d agree that these areas constitute the bulk of what it means to live in the U.S.

Middle class America.

Down to earth folks who you’d say “hi” do when you see them walking down the road.

How does Mustachianism and frugal living apply to doctors living on the coasts?

Does this belief and lifestyle work for a doctor trying to live in California, New York City, or Boston? There is a different mentality in these areas. I hate to generalize, but we have a more materialistic life in New York City than in Milwaukee. It takes a lot more convincing of someone living in Boston to save 50% of her income than her counterpart in Indiana due to external pressures (cost of living, high-end foods, general habits of your peers) in Boston.

In medicine, there is a term coined, “herd immunity”, which means that if enough of a population is immune to a certain condition (immunized), it essentially can provide protection to those who aren’t immune simply by numbers.

In financial terms, I’d call this “herd susceptibility”. If the bulk of your doctor friends in Manhattan wear Louboutin’s or Tory Burch’s, you might look like a pariah if you wear a pair of Xhiliration flats (Target brand) as a Gastroenterologist.

I’m all for driving a normal car, avoiding yearly $3000 a night safari vacations in Tanzania, or cooking your own dinner, but you most likely are expected to have a baseline appearance and level of living as a doctor. This baseline expectation is higher in Manhattan than in Memphis. Who wants a hobo as their doctor?

You would need to have a higher level of financial discipline working in the metropolitan areas. It can clearly be done, as there are plenty of MMM followers who live in NYC and Boston. As a doctor, you have to be extra motivated to live in a modest apartment, seek out like-minded peers, and desensitize yourself from you coworkers who frequent the Michellin-starred restaurants on the weeknights.

Some medical professions are more conducive to Mustachianism.

Some physicians work in outpatient clinics while others work in the hospital. Some of us see patients essentially only once and hopefully never again (Emergency Room physicians, Hospitalists, Anesthesiologists). Some of us never see patients (pathologists and radiologists). Some of us take care of patients for our entire career and see them every year (primary care, dermatologists, internists, ophthalmologists).

The frequency and duration of interaction with the patient determines the level of expectation from the patient of the doctor.

Let me explain.

For example, Emergency Room physicians take care of the acutely ill. The majority of these doctors wear scrubs to work or other clothing that they don’t mind soaking up the smell of vomit in the middle of the night. Their patients are sick and probably don’t care what car this doctor owns, what clothing she wears, or whether that is the latest Apple Watch on her arm. You can be driving an $80,000 Tesla or a $20 bike to work and no one will care.

In contrast, Plastic surgeons are most likely well-dressed, and their patients expect them to have a higher “expenditure for appearance”. How would you feel if your plastic surgeon drove a 12 year old Honda Civic and wore Tevas?

The disconnect is that an ER physician earning $400,000 a year living in Memphis will be more likely to reach financial independence earlier than a plastic surgeon earning $500,000 in the Upper East Side.

Ironic, isn’t it?

Who would have thought that it might be harder to save your money if you became a plastic surgeon or dermatologist than an Emergency Room doctor, even though your earning potential might be higher as a plastic surgeon?

How would you guys approach this conundrum?

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[Photo courtesy of of Flickr]