So, sometimes we ask, what's so special about physician finances? Why do we need different advice from other folks at our income level? One common trait that gets brought up is that most doctors have a low net worth compared to their income, which is why docs may not really be "rich" despite their salary numbers.
I stumbled across this article today on whitecoatinvestor.com: A Net Worth Rule of Thumb for Doctors (and the followup, Part 2).
For the link-phobic, the rule is that Average Post-Residency Income X Years Since Training X 0.25 gives the expected net worth of a doctor. If your net (that would be assets minus liabilities, so real estate equity and savings minus debt) is twice the expected or greater, you're a "prodigious accumulator of wealth". If you're at half the expected or less, you are an "under-accumulator".
If you're post-training, what do you think? Is it a good measure? If you're rating as a "prodigious accumulator of wealth" what do you think puts you there? If you are an "under-accumulator" what's setting you back?
I stumbled across this article today on whitecoatinvestor.com: A Net Worth Rule of Thumb for Doctors (and the followup, Part 2).
For the link-phobic, the rule is that Average Post-Residency Income X Years Since Training X 0.25 gives the expected net worth of a doctor. If your net (that would be assets minus liabilities, so real estate equity and savings minus debt) is twice the expected or greater, you're a "prodigious accumulator of wealth". If you're at half the expected or less, you are an "under-accumulator".
If you're post-training, what do you think? Is it a good measure? If you're rating as a "prodigious accumulator of wealth" what do you think puts you there? If you are an "under-accumulator" what's setting you back?
Comment