The 10 Million Dollar Dream and the Myth of the Wealthy Physician

Children believe in fairy tales

All three of my children believed in Santa Claus, the Tooth Fairy, or the Easter Bunny, at some point.  Heck, I am pretty sure my 12-year-old has figured it all out by now, but he is too smart to up such a good gig!  As their frontal lobes mature, so does their ability to separate fact from fiction.   Yet despite most adults’ ability to reason, many still believe the myth of the wealthy physician.   Most physicians today graduate with crushing debt compared to their predecessors.  The average amount of student loans for some can range between $189,000 and even exceed $500,000 in some cases.   The payments start day one after graduation, and if the interest isn’t paid, then it will compound- ouch! The myth of the wealthy physician starts to unravel.  New doctors, for the most part, are poor.

Established physicians are wealthy physicians- myth or reality?

Let’s examine this common claim.   My data is a little old but it still demonstrates a salient point. In 2005, Prince et al, undertook a survey by means of mail (wow).  They estimated that out of  890,000 physicians, only 43,700 were affluent, or less than 5%.   For the purpose of this study, they considered anyone who had a net worth greater than $5 million dollars as affluent, and even without inflation adjustment, I would agree that this number represents a substantial milestone in the accumulation of wealth.  Also, the data set excluded physicians with inherited wealth.   Of the affluent docs, only 16% of them had a net worth in excess of $10 million dollars, or 0.007%.  So, in the days of Forbes billionaires list where the “rich get richer,” doctors represent a fraction of a percent in terms of real wealth.  Myth busted.

How does age factor into wealth?

If we read other financial physician bloggers, like the White Coat Investor or Physician On Fire, we learn very quickly the key creating wealth starts early in the physician’s career.  Accumulating wealth takes years of diligent saving, investing, and compounding interest.  In many cases where a physician lives within or beyond their means, the creation of affluence will never happen.   The data supports this, as less than 11.5% of the physicians that have a net worth greater than $5 million were under 45 years old.   Therefore, if you believe the data, 0.575% of physicians under 45 years old are wealthy (again we are talking about self-made docs).   This represents about 60% of the physician workforce in the U.S. according to  If a physician has reached affluence, they most likely are older than 45 years.  The myth breaks down further.

Why does the myth of the wealthy physician persist?  

Money as a topic of polite conversation has always been taboo.  As Tony Robbins says in his book, Money: Master the Game, “We might discuss wealth in polite company, but money is explicit, it’s raw.  It’s garish, it’s intensely personal and highly charged.  It can make people feel guilty when they have it, or ashamed when they don’t.”  Only recently, in the blogosphere, have brave individuals begun to have an open conversation about money.  The FIRE movement and the likes of Mr. Money Mustache and others have begun to approach the conversation about money not in terms of shame or guilt, but in terms of what money really is – a tool and resource for a better life.  Some people could argue that the pursuit of money  is equivalent to the pursuit of greed, and this also contributes to the taboo of sharing information about money.  According to Maslow’s Hierarchy of Needs, one can only begin to work on fulfilling the higher pursuits of psychological and self-fulfillment needs, after one’s basic needs have been met.  It is money that provides us with the ability to fulfill those basic needs, and therefore, the security to pursue other more noble levels of existence such as love, self-esteem and self-actualization.  In this model, a person will never be able to reach these levels if they constantly preoccupy themselves with making ends meet, or living pay check to paycheck.  One could then argue that the accumulation of a security blanket of wealth is a noble pursuit, and should be discussed openly for the sake of helping one’s self and others.   This of fear talking about money for the sake of sounding crass is the reason the myth of the wealthy physician persists.

A very comfortable retirement

On one rare locker room occasion, the topic of retirement came up.  I am not sure what triggered this conversation, but I think it was prompted by the conversation around my current wish to go part-time.  An older colleague asked how much I would like to have in net-worth upon my retirement.   Taken aback and unprepared for the question, I answered,  “Somewhere between 3-4 million dollars,” feeling a little ashamed.   He replied, “Really, I am hoping to have at least 8-10!”   Shocked, I asked,  “Why so much?”   He retorted, “I want to be very comfortable.  I’ve grown accustomed to a certain lifestyle, and I want to maintain it.”   That exchange ended quickly.  This colleague for better or worse wants to live like a rockstar in retirement, which is cool, but at what cost?   I know reaching this level isn’t impossible, but I also don’t want to work until my health has deteriorated to the point that I need that money to keep me alive!  I think I would rather be a little more frugal and maybe a little less comfortable now and later, in exchange for more free time now – when my health is at its peak, and my children are young.   I realize that this is a highly personal choice, but the question arises – how many docs want to be “very comfortable” in retirement, and at what cost?  Also, when we speak of the wealthy physician, is wealth only measured in financial net-worth, or are we missing some priceless intangibles, like physical and emotional health? 


Ten million dollar question

After that conversation, I began asking others what would be their hypothetical ideal number for retiring.    To my surprise, I had encountered numerous individuals who had the same goal- $10 million!  How can this be?  Is the data flawed?  Am I working with some of the richest, most savvy investors in the world?   Or is something else going on?   I confess that I do remember at some point having a pie in the sky dream of having $10 million, until I realized how very improbable or difficult that goal would be.  I am also guilty of promoting this dream of the wealthy physician to others around me and now I have some damage control to do, especially in my immediate family.   I wonder how many physicians have realistic expectations of their net-worth at their retirement?   Am I  guilty of propping up the myth too?  I think so, at least until recently…

Reality sinks in

Physicians are truly blessed! As a result of hard work and delayed gratification through our education and training, we have the satisfaction of practicing in a prestigious career, and are treated with the highest respect in our communities.  For this, we receive good compensation.   We receive multiples more than average-earning professions.  We also get to enjoy other benefits such as regular vacations, nicer homes, and other amenities.   All this comes at a price in terms of hours spent at work, taking call, and working in high-stress situations, with lives of others being at stake.  What I hope to demonstrate is that physicians on the surface may look wealthy, but in reality, have comfort but not wealth.  Again, I do not want to imply that we as a whole are suffering in any way, but I don’t know any docs who have private jets or yachts (ok, just one but he doesn’t count, since he didn’t make his fortune from clinical practice).

Some physicians buy into the myth

My part-time position just started March 1st.   I openly admit that luck played a major role in this transition, thanks to an excellent job market and even better stock market returns.  Before this transition, I did not show very good restraint in my annual spending and looked more like Dr. Carlson from POF classic post.  Now that I have taken a 25% haircut in salary (more like 21.5% thanks to the progressive tax system), I have no choice but to budget and live within my means.  While this change may necessitate a long-overdue trimming of the fat from our loose spending habits, it has afforded my something that money can’t buy – time with my children while they are still young, and time to pursue interests outside of the wheelhouse of my hospital job setting.  After looking at Porsches, BMWs and Land Rovers in the physician’s parking lot, it seems more clear as to why many people believe the myth of the wealthy physician.  How many of those cars are leased or purchased with 0% financing?   Before I came to grips with the wealthy physician myth, I probably would have considered purchasing one too just to maintain the image and keep up with my peers, but not anymore.  If anything, those possessions have now come to represent the golden handcuffs keeping many docs at a job, whether or not they enjoy their work, in a virtual prison of their own creation.

 Can’t buy me love

Ironically, what has been proven in economic studies- that more money will only bring more happiness up to a point– also holds true to physicians.  Of the 43,700 affluent physicians previously mentioned, none were any happier having higher wealth.  Instead, the study showed the opposite.  Once they had the money, they lived their lives in fear of losing it, like a mad leprechaun protecting his pot of gold.   I guess Notorious B.I.G was right, “Mo money, mo problems!”  What if rather than trying to win the game by scoring the most points, we score just enough points to finish the game intact?  In other words, why win the financial game with the largest possible margin and sacrifice everything in doing so?   Robert Kiyosaki, of Rich Dad Poor Dad fame,  always says if you want to win, you have to give yourself a financial education.   Simply stated, know the rules of the game, have a strategy, and when you score enough points the game is over.   It sounds easy enough but for some reason or some people (like me), it isn’t.

If you wish upon a Star

I like what one blogger said to sum it all up.   “Are you working toward your goals–or wishing upon a star?”   Personally, I am done with the 10 million dollar myth, and the myth of the wealthy physician.

Thanks for the Visit,



15 thoughts on “The 10 Million Dollar Dream and the Myth of the Wealthy Physician

  1. Very informative post. Originally I had always shot for a 5 million net worth to signal that I had enough for retirement (with a 4% rule this would provide $200k/yr income). I have since started thinking this number is way too high and after reading reports that happiness peaks at around 90k/yr I think that a 3 million net worth would be more than adequate to shoot for (I am more than 2/3 way there excluding my primary home which is paid off). Honestly I think 125k/yr would be my sweet spot which would allow to spend on more extravagant vacations and more fancy dining during my golden yrs (I just turned 47).

    1. This was the breakthrough moment for me. All my partners survived 2001, 2008 and in some cases the 1987 crashes. Many of them saw their fortunes disappear overnight. Many of them have chosen the higher number out of fear. If you have 10 million and lose half, you still have 5 million. Also if you factor in inflation which hits docs the hardest in terms of college education and healthcare cost the dose of fear doubles. So many of them work out of fear. I have chosen to ignore this fear and plan based on the math. My wife recently bought into this idea and it has been nothing short of life-changing. We still have date-night, vacations, and eat the best organic food but we have eliminated everything else. Our budget changed radically but our happiness didn’t. We are going to downsize once my kids finish school so we may only need ~100K or less a year? Thanks for the comments, you are well on your way to financial freedom. The question is, what are going to do will all your time, maybe catch up on some sunlight! 😉 DOAT

  2. “Of the 43,700 affluent physicians previously mentioned, none were any happier having higher wealth. Instead, the study showed the opposite. Once they had the money, they lived their lives in fear of losing it, like a mad leprechaun protecting his pot of gold.”

    That’s the key factoid in the entire article. Not only is amassing $5 Million or $10 Million difficult, it also carries a weight that tends not to make people any happier. Which is pretty sad when you think about it.


  3. I retired at 52 with a net worth of 3-3.5 million. What I found interesting is that doctors think that I was being reckless, and most others would wonder why you worked that long.
    The key is how much do spend. Yes if you want to spend $30000 monthly, you might need $10 million. But realize that if you remove the expenses of college savings, retirement savings, decreased taxes, and decreased charitable donations (since I base on income), you need a lot less.
    Whether it is $95000 or $150000 that makes life comfortable (which might depend on health insurance, and whether you still have a mortgage), in most of the country you don’t need $400000.

  4. Great post. It’s funny that net worth is the deciding factor for retirement for many people. I never had a net worth number in mind for my financial independence. I always only looked at two things: The value of my retirement plan, and the passive income cash flow my investments generated. Net worth is a useless number when it comes to retiring. You can’t live on net worth. You live on the cash flow that investments produce. If you inherited a $5,000,000 house free and clear, you would have a net worth of $5,000,000. But you couldn’t retire on that. You would have to keep working to pay for the upkeep on the house. Likewise, the farmer who has lots of land, has a high net worth, but a low cash flow.

    Net worth is a fun thing to track, but it is not what pays the bills in retirement.

    I think doctors are thought of as rich because america has a paycheck to paycheck mentality. Most people equate wealth to the size of a paycheck. Doctors get a big paycheck so they must be wealthy.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

  5. I do see 10million discussed more and more as a net worth goal. I expect to hit that number thru the power of compounding after retirement. I agree with Dr Fawcett’s comment about you can’t spend a net worth number. I think this really applies to people with a large portion of their net worth tied up in a primary residence. I quit working full time when I realized the dividends and interest spun off from my taxable account would pay my spending. Everyones goals and priorities are different.

  6. I agree with Cory Fawcett, net worth has minimal value in retirement. The real key is what assets you have that will produce income or grow in value faster than inflation. I plan to have my home paid off, that will be over 450k of my net worth, but I will not draw from it (unless things get extremely bad). The real question is how much will your expenses be in retirement, and do you have assets that will cover that throughout retirement. In my case, shooting for 150k between pension and drawing from investments, that should easily cover retirement. Looking to have investments that will cover a 3-4% withdrawal rate depending on how the economy is doing. Net worth will be .5 to 1 million above investment assets with home and other assets.

  7. Retiring in 2 weeks at 60. I’ve hit the 10 number invested through great luck and a phenomenal bull market. I’ll be more than comfortable and just need to learn how to enjoy things. Medicine hasn’t been as fun in the last few years as when I started so long ago so I’m itching to get out and wish I had done it sooner.

  8. I can’t relate to colleagues with high expenses. Whether it’s multi-million dollar homes, fancy cars or 6-figure expenses. Personally, besides housing, retirement and kids education, I have to think hard about how to spend 6-figures. As such, a $10M portfolio seems unnecessary and over the top for me. Fortunately, due to my low expenses, I can retire sooner or go part-time. Those with dreams of a large portfolio can keep hustling away.

    1. I feel the exact same way. I am enjoying my part-time job and every time I return from a long absence at work, I can feel the stress and unhappiness around from my co-workers who are killing it just to get ahead. I heard a younger co-worker even say that they are working over-time to just to pay for a vacation or desired item. I guess it beats going into debt, but I don’t recall ever hearing anyone say they are going to work overtime to retire early. Double kudos to you for figuring it out early, it took me a long time to figure it out.

  9. Great article. The only thing I take issue with is that it was actually the Notorious B.I.G. who recorded Mo Money Mo Problems.

  10. 10M is actually not difficult to get to.
    20M is much harder. I reached it at 55.
    But can’t bring myself to retire.

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