How much income do you need from practicing medicine? There are so many potential answers to this. And so many doctors don’t have a solid answer.
In this post, I will discuss the power of knowing how much income you need from practicing medicine.
Taxes & Your Income
You can’t just throw out a gross number because, as an American, you have to account for taxes. In this article, I will focus on after-tax money for income needs.
You could earn $500k, but if it’s all W2 income, you’ll see but half of it. So, not $40k per month but more like $20k – of $5k per week.
Saving for Retirement
It’s also essential to figure out what you need for your retirement. I have lots of good articles on that. If you need an extra $3k monthly to plan a healthy retirement, add that to your personal income goal number.
Basics Needs to Live in the US
Most neighborhoods in the US are relatively safe. Sure, there are shootings and robberies, but it’s often in certain pockets, and people often target rivals.
You need housing, food, and healthcare.
It sounds depressing to think about only having those things in your life. But for those who love living life or trust that they can figure out a way to enjoy living life, all the fun to be had is relatively inexpensive or free.
1. Housing Costs – $1,500
Your income needs to cover housing expenses can be as long as $1,000 per month for rent and $200 for utilities. And all the way up to $10,000 per month as my friend pays for his mortgage and utilities.
You can also buy and share a $550k single-family home and rent spare bedrooms to cover your personal housing expenses.
2. Food Expenses – $500
How much income do I need to eat a healthy diet in the US. Our food quality is unparalleled. Everyone sends their best stuff to us from all over the world.
Beans, potato, brown rice, and a few spices. Sure, you may want the occasional egg, chicken, or beef. But it’s not that bad, really.
$500 for monthly groceries for 2 people is quite fair. But let’s say you also want fancy wine, coffee, veal, or other animal products that have been tortured before you consume them. Fair enough; let’s say 500 per month just for yourself.
3. Healthcare Costs – $500
To be healthy, the best thing we can often do is avoid western medical interventions. But, when you need it, you need it. No doubt.
I don’t believe in health insurance in the US but if you need it then $500 per month is a decent estimate for 1 person.
To get more out of your healthcare, you would focus your energy on prevention and pay cash for your care overseas or with cash-based clinicians in the US.
Lifestyle Goals
Some of us have kids, and some of our kids have horseback riding lessons. The horse rental alone is $1,500 per month.
Others need to have the newest leased BMW. Others, yet, are dating and want to impress the dude or lady with fancy clothes, perfumes, and botox.
For me, traditional medicine sucks major ass. And not in a good way. I fucking hate it most days of the week. I want to avoid it like I want to avoid my recurrent anogenital herpes outbreaks.
My lifestyle goals are to spend the least possible so that I can practice the kind of medicine I want.
Living on $2,500 of Monthly Income
To have $2,500 per month, you probably have to earn around $40,000 per year. Add to that however much you need to set aside for retirement.
If you want some money for a car, gas, and entertainment, you can add another $1,000 per month. Now, you’ll need a monthly income of $4,000 to enjoy your lifestyle.
How Much Income Do You Need?
Imagine you were a barista or busboy. How much income would you need? You’re the same person but you are now a doctor. Why do you suddenly need $330k a year of income?
We’re just imitating other doctors. Or trying to convince ourselves that we are good at what we do. Or that the antibiotics we prescribed actually saved someone’s life.
How much money do you want?
That’s a much more realistic question. It’s how much we want to earn to enjoy what we think we are enjoying.
Sure, you’ll have to sacrifice a lot for the kind of income you want versus what you need. When money dictates our choices in life, it’s rarely going to work out well for us.
Less Income, More Joy
What is awesome about the US is that you can earn a lot of money there. But you’ll have to kill yourself for that.
It’s a rare doctor who works a lot and prospers.
So, you can bust your ass for a few years, but you need an exit strategy. Or you have to cut back and work less and earn a more sustainable income or risk burnout.