Maybe I’ve been reading too much about entrepreneurship recently but I was thinking about our doctor’s salaries just yesterday and wondering what an entrepreneur would do with that kind of income.
Any entrepreneur who could get to $250k of gross income from their business certainly knows what the fuck they’re doing. They are likely competent and hardworking.
There are no overnight success stories, we all know that despite what the media likes to tell us. So it took this person quite a bit of hard work to get to that 6-figure income.
Would the successful entrepreneur stop at that income and just say “yea that’s good, $250k is what I was aiming for, I’m good right here.” or would they be focused on growing their income and creating something that is self-sustaining?
It’s unlikely that they would be buying fancy clothes, fancy cars and an oversized home. Sure, they may buy themselves a Rolex or buy a car in cash perhaps to maintain a certain perception among their clients. But splurging they certainly wouldn’t do… at least not the person who has made it this far in a cut-throat industry.
What might they do once they have reached such a high income? They would either be looking to expand their business or perhaps investing in other businesses, branching out and diversifying.
If they did buy a house it would likely be an investment property or a home which could one day be a profitable rental property. I don’t see that person buying an $800k home with a 30-year mortgage.
If they were leasing equipment to run their business they would purchase them. If they were paying rent for their business location they would probably try to buy the property.
Would they be timidly setting aside $2,000 every month in a shitty little index fund hoping to grow that bit of money by 2-3% shitty percentage points annually? Unlikely.
Would an entrepreneur have to do less work than a doc to earn that quarter million? Hell to the no. I show up to my job, change into scrubs, pick up my badge and stethoscope and start seeing patients. When the urgent care doors close I probably have 1-2 patients left to finish up with and then I’m out of there. All the drudgery is left to those running the organization.
Being a task-based employee is one of the easiest jobs out there. It’s the c-level workers, CEO, COO, etc. who have to make the tough decisions and deal with all the chaos that occurs.
What should I learn from this?
I have probably become more conservative with my investments as my net worth grows.
I invest in index funds knowing that best case scenario my money could go up by a few percentage points in an average year.
And through the same index funds I risk my money dropping by 30-50% in any given year.
Should I be as bold as an entrepreneur?
I recognize that I didn’t earn or work hard to make this kind of income; I worked hard to be a doctor – that’s a whole different beast. The rest of you can complain all you want that doctors are underpaid. I will agree that a healer offers something of value far in excess of $250k/yr. I will also agree that holding us to infallible standards with a fallible pay is a bit idiotic… then again monetary compensation isn’t set by some nerd sitting behind a desk, it’s driven by the economy.
We docs didn’t earn $250k the way a real estate mogul, an entrepreneur, a hustling startup or a restaurateur earned their $250k.
Put a business person out on their street, naked with nothing to build on and I would bet they could get back up to a sizable net worth in a short time.
Take a doctor’s medical license away and short of filing for disability or consulting there wouldn’t be much the physician could/would do. It’s the curse of specializing and having just one client, the employer.
So, should I start being as bold as an entrepreneur? Pull my money out of index funds and invest the shit out of it?
Probably not. I have the luxury of doing work that’s in high demand, highly regulated and therefore a big pain in the ass to shift the scales of supply and demand. Because of my somewhat safe and steady income it’s wiser for me to bank on a steady income but still save & conservatively invest at least 50% my net income, live on somewhere around 25% and put the other 25% to work.
Will medicine always yield such high incomes? Fuck no. Every profession has had or will see its day of Armageddon from which it will have to slowly build back up. It might come in the form of everyone finally realizing that they could prevent a lot of disease by just living a healthier life (unlikely).
Reimbursements could be cut drastically by stronger regulation measuring morbidity and mortality and not just relying on shitty, falsified big pharma research.
Just like the housing industry ate shit in 2008, the large health insurance groups could crumble and completely turn the reimbursement model on its head.
Reaching a little further, with a complex and devastating epidemic 90% of the current medical model could become obsolete. How likely is that? We in the US have created quite an impressive fortress and our foreign policies aren’t exactly doing the rest of the world any justice. Is it possible that as their societies crumble so will their healthcare which would inevitably put the rest of the world at risk?
That was fucking depressing. Okay, realistically that stuff isn’t gonna happen tomorrow or overnight but I don’t want to be the hard money-lender caught with my pants down at my ankles like it happened to some during the mortgage crisis. Neither do I want to be a pessimistic bitter man sitting and waiting for bad things to happen.
Where was I? Yes, putting the other 25% to work. If I can save 50% in something conservative, let’s say index funds, then I should feel secure enough to go calculated wild with that other 25%. I find this to be a good middle-ground between being a balls-to-the-wall entrepreneur and a dorky clinic based doctor (not you, you’re cool, talking about myself).
I haven’t figured out what I should do with this hypothetical 25% yet, I’ll add it to my growing to-be-researched list. But at least I know where to look, Portland isn’t shy of entrepreneurs.