Sunday, August 2, 2020

Which Specialties Will Make You Rich?

Most people think that all doctors are rich, right? One definition of rich is somebody who makes more money than you. If that is the case, then nearly all doctors are richer than the average American. But to really understand how well off somebody is, you need to look at their net worth. A high income doesn't mean anything if it is frittered away and there is nothing left to show for it. A Charles Schwab Modern Wealth Survey reported that most people considered a net worth of $2.3 million as a definition of being wealthy. That is a considerably higher bar to hurdle than just merely have a high income.

For most physicians, that is a difficult, though not impossible goal to achieve. Obviously if you're just starting out, $2.3 million in net worth sounds like a pipe dream. But as your career flourishes, the goal gets closer and closer within your grasp. And certain specialties have an innate advantage in achieving high a net worth.

While the average person thinks $2.3 million defines the wealthy, physicians have a different point of view. Most doctors would probably be happier with $5 million in net worth. Can't show up at the country club driving a Mercedes when your colleagues roll in with their Bentleys and Aston Martins. So here are the ten specialties that have the most doctors who have a net worth of over $5 million courtesy of Medscape.

1. Orthopedics, 19%
2. Plastic Surgery, 16%
3. Gastroenterology, 16%
4. Cardiology, 15%
5. Oncology, 15%
6. Dermatology, 15%
7. Otolaryngology, 14%
8. Urology, 14%
9. Radiology, 13%
10. Ophthalmology, 13%
*11. Anesthesiology, 12%

Medscape Physician Compensation Survey 2020
Medscape Physician Compensation Survey 2020

Naturally most of the fields in this list are also the same ones who have the highest incomes. But making a lot of money doesn't guarantee that you'll end up with a high net worth. If you spend all your money on fancy cars, bad investments, and multiple wives and children, you can still end up a pauper despite making a six figure income. I know doctors who are working well into their 60s and 70s because of poor life choices over the years.

While this list looks impressive, fifty percent of all physicians have net worth of under $1 million. Since there are no ages associated with these statistics, it's probably safe to say that most of the doctors under 50 years don't have a net worth of $5 million. In fact, in some fields like pediatrics and family medicine, over 40% have net worth of under $500 thousand.

So all you millenial physicians just starting your careers, keep saving into those tax deferred accounts and other wealth building plans. Five million dollars may seem impossible to attain at your current situation, but keep plugging away. Compound interest and six figure incomes will work to your advantage in the future.

* I just had to add anesthesiology to the list to show how close we are to the top ten of wealth generating specialties.

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