As a doctor or someone who has considered becoming a doctor, you likely want to get a sense of what you might expect in terms of salary. However, net worth encompasses more than just salary. You can calculate your net worth by subtracting your liabilities from the assets you own.
Net worth may be more important than bringing in a high salary. After all, it’s possible to have a high salary and a low net worth! If you spend more than you bring in, it’s possible to have a low net worth, even if you make hundreds of thousands of dollars per year. Therefore, it’s worth putting a priority on calculating the average doctor’s net worth over bringing in a high salary.
Let’s take a look at the definition of net worth, discuss doctors’ net worth as a whole (including prior to COVID-19), how to improve net worth, and resources for doctors to improve their net worth. By the time you’re done reading, you’ll have a rounder idea of net worth, including the average doctor’s net worth at retirement.
What is net worth?
You can calculate your net worth with some simple math: Net worth = Assets – Liabilities
But is net worth easy to calculate in real life? Not necessarily, because you might find it challenging to add up all of your assets and liabilities in order to include them in the calculation.
Assets may include checking accounts, savings accounts, retirement savings equity (the amount you own), real estate, vehicles you own, and other assets. Liabilities may include consumer debt, personal loans, student loans, mortgages, auto loans, and other types of debt. American families have an average net worth of $748,800, according to data from the Federal Reserve’s 2019 Survey of Consumer Finances, the most recent information available.
Let’s put the net worth calculation into practice. Let’s say you have the following assets and liabilities:
Assets:
- Equity in your home: $400,000
- Retirement savings: $500,000
- Checking and savings accounts: $10,000
Liabilities:
- Student loans: $200,000
- Mortgage: $200,000
- Auto loans: $40,000
In this case, you can calculate net worth like this:
- Net worth = ($400,000 + $500,000 + $10,000) – ($200,000 + $200,000)
- Net worth = $910,000 – $400,000
- Net worth = $510,000
If your liabilities exceed your assets, you’ll have a negative net worth.
The amount of money you make as a doctor can help you build your net worth. The type of doctor you become as well as your level of education and specialization affects how much you make. U.S. physician compensation grew 3.8% on average between 2020 and 2021, an increase compared to the previous year’s 1.5%.
Merritt Hawkins compared physician starting salaries (excluding bonuses and benefits) using the most recent data below:
| Medical Specialty | 2018/2019 Average Salary Offer |
| Cardiologist (invasive) | $648,000 |
| Orthopedic surgeon | $536,000 |
| Gastroenterologist | $495,000 |
| Urologist | $464,000 |
| Cardiologist (non-invasive) | $441,000 |
| Dermatologist | $420,000 |
| Anesthesiologist | $404,000 |
| Otolaryngologist | $402,000 |
| Pulmonologist | $399,000 |
| Hematologist/Oncologist | $393,000 |
| Radiologist | $387,000 |
| ER physician | $382,000 |
| OB/GYN | $318,000 |
| Neurologist | $317,000 |
| Psychiatrist | $273,000 |
| Hospitalist | $268,000 |
| Internist | $264,000 |
| Pediatrician | $242,000 |
| Family medicine physician | $242,000 |
Are doctors millionaires?
In order to qualify as a millionaire, you must have assets worth $1 million or more.
The 2021 physician wealth report showed that 56% of physicians reported a net worth of over $1 million. The majority of family physicians become millionaires by the age of 55 — only 11% had a $1 million net worth before 45. Younger doctors typically have a lower net worth; older doctors have typically saved more in order to accrue a larger net worth.
In 2019, 96% of doctors under 28 years old had less than a $1 million dollar net worth, while 25% of doctors 70 years or older had less than $1,000,000 net worth. A total of 54% had a net worth between $1,000,000 and $5,000,000.
Average doctor net worth pre-COVID-19
Primary care physicians tapped into their savings to keep their practices going during the COVID-19 pandemic, according to a new report from Medscape. Primary care physicians experienced a 55% drop in revenue and a 20% to 30% drop in the number of patients.
In 2020, in a survey of 17,000 physicians, primary care physicians made around $243,000 and specialists made about $346,000. A total of 42% of physicians had a net worth between $1 million and $5 million and 8% had a net worth of more than $5 million.
The 2021 Medscape Physician Wealth and Debt Report found that of 20,000 physicians surveyed have a net worth under $1 million, while the other half has more than $1 million and 7% have over $5 million.
Finally, what is the average doctor’s net worth at retirement? Of physicians aged 65 and 69, 24% have less than $1 million, 59% have $1 million to $5 million and 17% have over $5 million. Of physicians over 70, 25% have less than $1 million, 54% have between $1 million to $5 million and 22% have over $5 million.
Expenses of doctors
Doctors may have unique expenses compared to other professions. For example, they may have larger student loans, homes, and mortgages compared to the general population. Let’s take a look at each:
- Student loans: The Association of American Medical Colleges (AAMC) found that the median medical school debt of graduates in 2019 was $200,000, which doesn’t include debt from undergraduate school.
- Home size: Doctors often buy larger homes to shield their assets from bankruptcy from malpractice lawsuits. Certain states offer homestead exemptions that allow them to keep their homes after losing a lawsuit. Physicians purchase homes that cost 13% more than business executives and lawyers who earn the same salary. Without homestead protections, the differences in home prices do not exist.
- Mortgages: The fact that many physicians purchase larger homes means that they also have higher mortgages. Doctors can tap into physician loans, which allow for a lower down payment, no private mortgage insurance (PMI) (which protects the lender in the case that physicians stop making payments on their home), and a higher debt-to-income (DTI) ratio, which means that a physician can have higher debt related to income.
Resources for doctors to improve their net worth
Physician bloggers, Facebook groups, financial advisors, and other resources can help you increase your net worth. No matter where you are in your career, you can start building your personal wealth, particularly with a large salary at your disposal.
If you don’t feel as if you can do it alone, it’s a good idea to consider touching base with a financial advisor to help you. A financial advisor will help you organize your goals, understand your risk tolerance and walk with you in the process of helping you build wealth. They will meet with you as often as you like to help you accomplish your net worth goals.
How to improve your net worth
Consider all the ways in which you can put your finances first in order to build your net worth. For example, purchasing expensive cars may not be the right approach because you may lose money on a depreciating asset. However, putting money into a retirement fund in which your hospital matches a certain percentage of your investment can set you up for financial success in the future.
For example, you can improve your net worth in the following ways:
- Pay off credit card debt
- Build an emergency fund
- Pay off student loans
- Max out retirement contributions
- Cut expenses
- Live below your means
- Pay yourself first
- Invest in yourself
- Buy your forever home
- Avoid liabilities and acquire assets
- Improve your financial health
- Protect your net worth with insurance
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