Rap Video:
https://youtu.be/H1KBHFXm2Bg?t=72
I bought a 'Rari just so I can go faster (skrrr)
Actual Content:
https://www.youtube.com/watch?v=QsdcYyg3HX4
The break even point where the doctor and plumber have the same net worth, in this above calculation, is about 42 years old. That means when both our plumber and doctor are 42, they will be work exactly the same, even though they took dramatically different paths.
“By the age of 50 years old, the doctor is worth over $6.1 million dollars , or $2.3 million dollars more than the plumber. The break even point where the doctor and plumber have the same net worth, in this above calculation, is about 42 years old.”
How many 50 year old plumbers do you think are worth $4 million?
Guess it depends if they own their own business and/or if they’re a Master Plumber.
Also, are we including home equity in the net worth equation?
i only know 1 plumber who is that old and that plumber has a businesses and he’s worth around 7m at age 55. i dont really talk to most plumbers though.
anywho. here is a net worht report on doctors:
keep in mind there are heavy assumptions on the scenario. (50% of take home is saved)
Of course not, duh. It’s amazing how many think they are rich, when it is all ephemeral home equity.
That’s not what I am asking in general. How much can you actually expect to be worth as a plumber by age 50? I am sure some plumbers are wealthy, but there are doctors worth $100 million too.
i got what you are saying, but there are no reports on plumbers so i just gave a worthless anecdote. anyways i think we are looking at this all wrong. we should actually look at the hourly rate. in addition i think we should look at it 100% saved for both, since we cant just make assumptions on how these people spend.
I have a family member who is in a similarly skilled trade in a good market, many live paycheck to paycheck and don’t even contribute to their 401ks to take advantage of company matching. They spend a lot, massive trucks, house, boats, ect
Plumbers and doctors basically do the same job, except doctor’s fingers are cold and plumbers don’t make you fill out as much paperwork.
My understanding is that both doctors and plumbers only achieve Ohai portfolio volatility outcomes when they own the business. I suspect it’s easier to run a doctor practice than a plumbing business, however. This is based on my experience in being involved in the operations of blue collar businesses
There is certainly a higher barrier to entry in becoming a doctor, as well as less transparency. I have no idea if the doctor overcharges me for some treatment, or if they prescribe a lot of tests that I don’t need. Compared to plumbers, doctors can probably operate viable businesses with worse business practices.
also there are ways to beat the tax system as a high earner. consider a lasik doctor i know. his business prolly nets 400k/year. he recently developed a commercial property worth 10m. if we assume a 5 percent cap rate, his annual paper profit is prolly -250k. he can use these losses to offset his profitable primary business. his real cash flow on the building is prolly 200k net. so in that scenario. the doctor is killing it.
Man, I dont know, I read this articles about that a complete average family in America saves 2% or less of their income…and that 65% of families would have difficulties to cough up $400 if needed for emergency.
And then there are these stories of a plumber being worth millions.
I’m in my earlier thirties with a 6-figure net worth and I don’t know whether I should be proud or depressed!
k he wasnt really a plumber. he did plumber things. he worked for a major reit and just managed homes. fixed crap, cleaned stuff. but he was netting 60k/year in his 50s so plumbing esque. his wife who is a nurse made 90k per year right now. so 150k total. then they own several real estate properties that they used for a business in sf, those businesses only report a slight profit, but the cash flow is huge. combined with the appreciation. they have a net worth of 7m combined. really if you split it, it’s around 3.5m per earner at the age of 58 or 59.
This is an area where averages aren’t very useful. I’d just the percentile rank calculators on the web that benchmark networth and income. But if you have six digit net worth you are already doing well in the United States and top 1 percent globally.
I suspect there is way more rent seeking behavior by doctors given the things you’ve mentioned. The market for doctors obfuscates the price mechanism, making it inefficient imo
It is not just your opinion - it is virtually a fact that opacity in the medical field dramatically drives up costs. Furthermore, the American Medical Association is essentially a guild that intentionally restricts supply of providers and ensures constant demand for their services.
Anyway, another thing in favor of doctors is that their income will be highly dependable for a long period of time. Patients do not generally have a high elasticity of demand for medical services, so doctors can probably rely on predictable revenue year after year. Other professional servicers, like finance or law, almost always have some period of downturn or career interruption. Plumber income, I’d imagine, is variable based on real estate cycles. Based on this, an analysis over long periods of time should be adjusted for career stability.
Dispersion of outcomes is also important. Doctors are placed by the medical school cartel into specific jobs. So, their income and opportunities fall within a narrow and predictable range. This is preferable to a job with high outcome variability, where you might do very well, but where you also have a tangible possibility of failing utterly.
This is not a valid comparison.
Choice of profession is one thing and putting the grit and hours is something else. Doctors do get paid so much because they are Doctors which is true but part of it is because of the hours they put studying and being miserable.
If the average plumber put in the same hours into figuring out how to improve his business (provided they have a decent IQ) then we could actually find who makes more.
The studying Doctors do to become Doctors is crazy. Anyone who put in those hours in a job with somewhat linear improvement prospects would do well.
Agreed. My wife took $100k of my monthly muni interest and threw it away on our mortgage. I am so pissed. How does she not know that home equity is totally worthless! Some people just don’t understand finance…
my cousin from the philippines that is really wealthy (20m), just became a doctor recently. It’s a lot of work. he did it just so he can help the poor.
anyways saw this itneresting article. teacher vs doctor
https://www.bestmedicaldegrees.com/salary-of-doctors/
apparently it takes 42k hours to become a doctor (21k hours of which are uncompensated), spending 687k just on costs. then you will then work 100k hours.
a teacher on the other hand takre 6.5 hrs of training, then actually works 65k hours.
once they factor net of tax earnings on a hourly basis, the teacher wins by roughly a quarter a day.
interesting enough teachers have a high likelihood of becoming millionaires.