You can download the income analysis spreadsheet here to follow along – Are Doctors Rich? An Income Analysis – Excel

Doctors are rich! Become a doctor and you will soon be wealthy, right? I mean toiling through undergrad, medical school, and residency surely means that by the time you’re a full fledged attending physician, you will be making bank and surely the hard work will pay off financially. Not so fast.

Becoming a doctor in the United States (and most other countries for that matter) may not be as financially lucrative as the generally public believes. In this post, we will do a quick demonstration and analysis of finances between physicians and UPS drivers. The results may surprise you.

Assumptions for Analysis

This analysis cannot be perfectly accurate as there are too many variables at play. Therefore, we use a series of assumptions. There is a link to the analysis spreadsheet in the description below where you can follow along with the calculations I made.

First, let’s decide how much money the average doctor makes. A 2017 Medscape Physician Survey placed the average full-time compensation for primary care physicians at $217,000 per year. Specialists, such as cardiologists, dermatologists, radiologists, etc. make an average of $316,000 per year.

A UPS Driver, on the other hand, makes much less at only $74,000 per year. While on the surface being a physician seems much more financially lucrative, we must remember that physicians, unlike UPS drivers, must undergo 4 years for a bachelor’s degree, then 4 years of medical school, and then 3-7 years of residency prior to securing attending physician salaries. In the process, these individuals accumulate debt from college and medical school amassing to an average of $185,000.

Compound interest also comes into play. For the sake of simplicity, UPS drivers and doctors each save $5,500 per year and have a return of investment of 7%, which is the historic average of the stock market. Doctors, however, only start investing when they are out of debt, which is 10-12 years later. This analysis does not include yearly expenses or interest on student loans, but rather only income and investments, again for the sake of simplicity.

Overtime for UPS drivers is $45/hour. I ran the analysis for a UPS driver working only 40 hours per week, but then also for a UPS driver working the same hours as a doctor, which is 80 hours per week up until they finish residency. After residency, work hours per week drop to 60.

So Who Is Better off Financially?

Looking at the analysis, we see that a UPS driver working only 40 hours per week is financially ahead of doctors, both primary care and specialists, until the age of 34 – or 16 years after finishing high school. That means throughout your twenties and the first half of your thirties, you would be better off financially as a UPS driver working only 40 hours per week.

If a UPS driver works the same hours as a physician and gets paid overtime, it takes longer for a physician to catch up. Specialists, such as radiologists, anesthesiologists, and other high income specialties average $316,000 per year. It still takes them until the age of 41 – that’s 23 years after high school – to catch up with the UPS driver who is working the same hours. As a primary care doctor earning $217,000, it takes even longer. They only catch up to the UPS driver at the age of 53 – 35 years after high school – and only 12 years before retirement.

Should I Go Into Medicine for the Money?

I understand this analysis is far from perfect and that’s beside the point. The purpose of this analysis was to demonstrate that becoming a physician is not as lucrative as you may initially think from seeing the salaries. There is a massive opportunity cost associated with this career path due to over 10 years of training and student debt. Medicine is not a bad field to go into – I have completed medical school and am now in residency. I have zero regrets about that and I love the field I chose. But if you are on the fence, if you think going into medicine and becoming a doctor will make you rich and allow you to live lavishly, then I hope this analysis has shed some light on the reality of the situation. Don’t go into medicine for the money. For those of you who are undecided on a career in medicine, check out my video titled “Is Med School Right for Me?”

I’m curious to hear your thoughts in the comments below. Are you surprised by these figures and the analysis? Are you relieved that you did not go into medicine? Are you having second thoughts? Or are you happy because the money wasn’t ever the primary focus?

Sources

MedScape Physician Compensation Report 2017  

UPS Average Salary 

Physician vs UPS Driver Comparison