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Income Earned, Income Kept

October 2006, I started moonlighting as soon as that medical license arrived in the mail. My net income earned since then is $1.6M and the income kept has only been $500k.

This was a good practice for me to realize how much effort I’ve put over the years. Looking back at all the shit I’ve been through, would I have wanted to keep more of my money? How will this knowledge affect my future decisions?

If you are where you want to be financially then this may be a fruitless exercise. However, if you still have certain financial goals you’d like to achieve then try this out.


Income as a Family Medicine Physician

I earned my income as a board certified family medicine physician. I never had my own panel and have been doing urgent care medicine as soon as I became an attending.

Family medicine is a lucrative specialty after you factor in the time it takes to complete a residency and future income opportunities. The ability to moonlight during residency not only allows you to fast-pace your learning but also adds to income earned.

Job opportunities are abundant for family medicine physicians. I recall what my good ortho buddy had to go through after residency to secure a job – a nightmare.

2006 (Started Residency)

$60k gross income earned. $45k of the income kept.


I made $83k from what I recall. I kept about $60k of this after taxes.


I earned $100k gross from even more moonlighting and kept about $70k that year.

2009 (finished Residency)

I earned $180k while still a resident – a chief resident. The percentage of income kept was high because most of the income was as an independent contractor – $140k.


My first year as an attending at Kaiser Permanente where the advertised starting income was $160k. I ended up earning $220k. $130k income kept.


I grossed $285,000 at Kaiser and kept $180k. The reason I was able to keep a higher percentage was that I was maxing out my retirement contributions.


I earned a gross of $330k and kept $180k of this money. By this time I was contributing to a 401k and a Keogh.


$350k of gross income earned which included overtime work. Of this, I kept $200k-ish.


I whored myself out and grossed $430k which included cashing out $30k of vacation time. I kept $260k of this income.


I grossed nearly $300k and kept $180k. I had moved from Kaiser SCPMG to Kaiser NWP in Oregon.


I retired in 2016 so the income was $220k which included a few months of part-time income. I kept $130k of it.


Total Income Earned

In total I netted $1,600,000 from 2006-2016.

I want to compare this total net earnings to my current net worth which is around $900k. Which means that I only spent $700k over that decade.

But that’s not exactly accurate.

Compounding Returns

My current net worth is as high as it is because of compounding investment returns. Over the years I have probably only invested $500k-600k.

The other $300k-400k is the appreciation of the investments.

By leaving my money invested and not cashing it out, I was able to grow my wealth exponentially.

Favorable Markets

In my case, I started investing in 2008 and we’ve enjoyed incredible returns since then due to a bull market.

It would be a different story if I started investing in 1999 and had to see my investments go through the 2001 and 2008 crashes.

Actual Numbers

More accurately, I netted $1.6M from the above calculations. I kept only $500k of it.

In 10 years I spent $1.1M or $110k per year, on average. This includes paying back debt such as student loans.

I had very spendy years from 2006-2013. I not only spent everything I earned but also cashed out 401k’s, 457’s from residency, and I went into further debt by maxing out credit cards.


Money Momentum

Money that sits around in cash doesn’t have a lot of power. Its value in the long term might even be corroded by inflation.

Money that’s invested, however, can build up momentum and grow through compounding returns. Dividend yields and underlying asset appreciation can make up for years of excess spending.

After going into a lot of debt, in late 2012 I decided to attack my credit cards, auto loans, and mortgage in order to slowly work myself towards a positive net worth.

With only 4 frugal years, 2013-2016, I was able to pay off the debt or get rid of the liabilities and accumulate a healthy net worth.

Any resident can achieve financial security within a few short years after residency.


Evaluating Data

The point of such data collection isn’t to beat myself up. It helps me make better future decisions.

I will always have to make spending decisions even when retired. Billionaires have to make spending decisions, no way around it.

Would I be more content having more in my financial independence portfolio or having had more passport stamps?

If you are coming across this data before age 50 then you haven’t even hit your highest earning years. Medical professionals’ salaries go up with age so my highest earning years are still ahead of me.


Career Disasters

We don’t know what career disasters we’ll experience or what personal disasters we’ll encounter.

It seems that I’ve toured the spectrum from having gotten married and divorced, gone into massive credit card debt, burnt out, and investigated by my medical board.

Most physicians deal with far worse, such as malpractice lawsuits, child custody drama, job-loss, license revocation, and substance abuse.

Entropy is the norm. For us to have a predictable, safe career path we would have to work our asses off far beyond providing good patient care.

We practice medicine thinking that as long as we show up, care, and stay engaged then we are going to do well. I no longer believe that’s the case. The career of medicine is anything but predictable, easy, and encouraging.

My advice for the young physician is to plan for things which we don’t see coming around the corner. My advice to the financial adviser with physician clients is to anticipate such things and forewarn their clients.

You might burn out and lose a couple of years of good income. You might get divorced and lose $150k in legal fees. You might get in trouble with a licensing board which will hinder your ability to find a lucrative job in the future.



4 replies on “Income Earned, Income Kept”

I knew FPs could do well working in UC, but had no idea 400k+ was possible. Would you be able to share how you were able to gross that much in 2013-2014?

I have some post on it where I break it down. My base pay in 2014 was $245k/year. I worked an average of 55 hours a week for the entire year. I made sure to pick my hours on weekends and evenings to get the higher pay differential. I cashed out my vacation for the year. In total I made $437k gross for the year. This didn’t count the pension contributions my employer made on my behalf.

Thanks so much for this Dr. Mo. Really puts things into perspective about saving even when you’re making the big bucks.

Is it still possible to hit these numbers in income that you made?

I think it’s even easier now than before. Urgent care is getting reimbursed at much higher rates than before because of the demand. Now that hospitals have to compete with telemedicine companies for patient dollars, UC will be an even bigger first touch point with patients.

Medical groups are paying $140/hour to FP’s to do urgent care and I’m sure there are higher hourly salaries as well.

With some overtime it should be easy to hit the high $400’s. That said, I don’t think $400k is necessary. I doubt it’ll make much of a difference in a physician’s life versus $300k unless it’s done strategically for a couple of years in order to pay down debt.

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