Reflection on “The White Coat Investor”
At the close of 2013, I penned a book titled The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing. I had just become a millionaire, having transitioned to a partner earning over $300,000 in my first year—quite a jump from my previous salary. However, the book itself was not generating substantial income, bringing in around $5,000 in 2012 and about $20,000 in 2013.
This book was mainly a straightforward guide on managing finances for physicians, designed to lead them toward financial prosperity. It’s helped many doctors—tens of thousands, maybe even more—and has mostly been effective. Still, it wasn’t without flaws. My predictions didn’t always pan out. Major economic shifts over the last decade made at least one chapter feel somewhat outdated.
That chapter? “The Big Squeeze.”
Originally, it described doctors feeling squeezed between stagnant income and the rising costs of medical school and student debt. As I wrote it, I thought I understood the landscape. Turns out, I was mistaken.
Physician Income
The average income for physicians, it seems, has continued to grow, despite the ups and downs. Recent Medscape data illustrates this ongoing trend.
While there’s a sense that many doctors earn less than before—and some certainly must work extra hours just to keep their income stable—the averages indicate an increase. Indeed, looking at figures from 2011 ($206,000) to 2024 ($374,000) reflects a 4.7% annual growth, outpacing the CPI-U inflation rate of 2.6% during the same time. Sure, inflation has had its moments—particularly in the last couple of years—but the overall picture shows physician pay hasn’t plummeted.
Highlights include:
- Ways to increase income as a doctor
- Does more money really equate to more happiness?
- Residents voicing frustration over low salaries and feeling undervalued.
Medical School Costs
Now switching gears to medical school tuition. There’s no denying that the median costs have been rising, as many charts depict—even on platforms like Reddit.
However, from 2013 onward, significant hikes have plateaued. In fact, when you look at median household income as a percentage, the costs have remained relatively steady in recent years.
A closer look at tuition reveals a modest increase—only from $50,400 to $58,900 over nine years, averaging a mere 1.8% per year. This is notably less than the CPI-U, which is around 3.1%. In adjusted terms, entering MD programs might actually be less burdensome financially than it was a decade ago.
Interestingly, the median debt for graduates has hovered between $195,000 and $207,000 for years. Even with current borrowing limits at $220,000, taking on that level of debt for a job yielding $374,000 annually still looks like a solid investment. So, on average, medical students aren’t drowning under pressure—at least not compared to prior trends.
Furthermore, federal student loan policies have gradually become more favorable, and interest rates have decreased remarkably through 2022. The pandemic even temporarily relieved some of these burdens, alleviating payments and interest for extended periods. While concerns still exist, especially as repayment plans have evolved, the core question remains about their overall burden.
I misjudged how the landscape would unfold. Now, with adjustments in student loan policies, there’s a different kind of challenge on the horizon. However, the expected pressures around incomes and educational expenses aren’t as heavy as they might have appeared years ago.
The Housing Crisis
Now, let’s talk about one significant financial strain: the housing crisis. It’s a pressing issue affecting many, including physicians. Currently, the median home price in the U.S. has surpassed $420,000, which poses worries given the median household income sits at just $80,000. Such a disparity—buying a house that costs six times your income—is obviously concerning.
In 2010, I purchased a home for less than $500,000; however, in the current climate, nothing in my neighborhood is listed for under six figures anymore. And by the way, my state, Utah, isn’t classified as a high-cost living area either. For context, the median home prices in HCOLAs are staggering:
- San Francisco: $1.27 million
- Washington DC: $594,000
- Boston: $780,000
- Manhattan: $1.17 million
So, it raises a question—what type of physician earning in the top income brackets can realistically buy a median-priced house? It’s likely that their homes are priced at least double that. I can imagine a chapter in my book suggesting to buy now, even if you’re not in a position yet.
The Burnout Crisis
Another area I overlooked was the significant challenge of burnout. Recently, I spoke with a colleague, a surgeon, also in mid-career. He found himself completely burnt out and ultimately changed his job for a lower salary just to escape a toxic work environment. Unfortunately, this kind of story is becoming more common in the medical profession.
Studies, including one from Medscape, highlight troubling trends regarding burnout experiences among physicians.
Burnout is arguably one of the biggest threats to a medical career. While you can insure against disability, there’s no real safety net for burnout. This awareness has grown in my work over the years, and topics related to health and burnout have garnered significant attention in our sessions.
The conclusion? While I initially considered the “big squeeze” to be primarily about income and loans, the conversation needs to include housing costs and burnout issues. Those pressures, perhaps, may be the real challenges physicians are facing.
How have you experienced financial challenges in your career? Are income pressures, handling student loans, buying a home, or preventing burnout prominent in your journey?
