The average physician makes $352,000, and some earn well into the $500,000s. So, doctors don’t have to worry about money, right?
You know the answer to that.
One thing all physicians have in common about money, says James M. Dahle, MD, FACEP, founder of The White Coat Investor, is that they don’t receive any training in business, personal finance, or investing throughout their schooling or careers unless they seek it out. This leaves many unprepared to make the best investing and money-saving decisions, while others get too frustrated about their lack of knowledge to even dip their toe into the investing pool.
Exhibit A: Four out of 10 physicians have a net worth below $1 million, according to the Medscape Physician Wealth & Debt Report 2023. Elizabeth Chiang, MD, PhD, an oculoplastic surgeon and a physician money coach at Grow Your Wealthy Mindset, notes that many of those doctors are over age 65, “which means they essentially can’t retire.”
And that’s just one pain point.
Physicians have money concerns specific to their profession and background. Luckily, some fellow doctors also serve as financial and wealth advisors just for other doctors.
Blind Spot #1
The early lean years skew doctors’ money outlook. “We have an extended training period, which commonly consists of taking on a large amount of debt, followed by 3 to 8 years of being paid a modest salary, and then finally a large boost in income,” explains Dr. Chiang. This can lay a shaky foundation for the earning years to come, and as a result, a lot of doctors just don’t think about money in healthy ways. Once their incomes increase, physicians may be surprised, for example, that making a multiple six-figure salary means paying six figures in taxes.
The Fix
Treat financial health like physical health. That means money cannot be a taboo subject. “The misguided mindset is that we didn’t become physicians to make money, we did it to help people,” explains Jordan Frey, MD, creator of the blog, The Prudent Plastic Surgeon.
Dr. Frey acknowledges that the desire to help is certainly true. But the result is a false idea that “to think about our personal finances makes us a worse doctor.”
Blind Spot #2
Because doctors know a lot about one thing (medicine), they might assume they know a lot about everything (such as investing). “Totally different fields with a different language and different way to think about it,” Dahle explains. This overconfidence could lead to some negligent or risky financial decisions.
The Fix
Educate yourself. There are several books on personal finance and investing written by physicians for physicians. Dr. Chiang recommends The Physician Philosopher’s Guide to Personal Finance, by James Turner, MD; Financial Freedom Rx, by Chirag Shah, MD, and Jayanth Sridhar, MD; and The Physician’s Guide to Finance, by Nicholas Christian and Amanda Christian, MD. There are also podcasts, blogs, and courses to help educate doctors on finance, such as the Fire Your Financial Advisor course by The White Coat Investor.