Why Doctors are Not Wealthy

[Music] today we're talking about why doctors are not wealthy [Music] welcome back to my channel I am dr. Jude I'm an orthopedic surgery fellow here in Toronto though I did all of my training in the UK and today I want to address a common misconception people often think that doctors surgeons even other healthcare professionals or other professionals such as lawyers and etc wealthy today it's probably more important than ever to be financially savvy pay has not really increased in real terms cost of living has skyrocketed education is extremely expensive and actually if you look at many of the senior surgeons and senior doctors they actually enjoyed free education so perhaps the decision-making didn't necessarily have to factor in all of the debt that most people are going to accumulate now from going to university make sure you check out my other videos on this channel we talked about how much junior doctors earn we then talked about how much fellows earn and then how much consultant doctors and Surgeons earn before I continue if you like make sure you subscribe throughout the video if there's anything you agree with or disagree with make sure you put it in a comment section so that we can kind of create a platform for discussion so I talked about this in a different video but it's so important that young people understand the difference between income and wealth most kind of financially awoken people will have multiple streams of income and that's essentially what you want to aim for your wealth is it's a difficult thing to define but essentially it's how much you are valued at in general so how much has your investments how much of your is your previous years of hard labor contributed to your financial standing today and really what does it mean to be wealthy that's a difficult thing and for me I think being wealthy means that you could stop working tomorrow and you would still be able to maintain a reasonable standard of living or it means that you could continue working but do your financial preparation and decision making thus far you are able to sustain your family or another individual or pay for education for your kids without having to go into debt or accumulate credit the problem is as doctors we value income / wealth creation and that is not a problem isolated to doctors that tends to be the majority of well educated professionals unimportant it's certainly in medicine is that we neglect investing and we prioritize career progression and accumulation of qualifications education and these things means that we do not stir earning the income that we desire until the latter stages of our career which means if you see in previous videos and the average earning of a UK doctor it's about 115,000 pounds which is quite good but that tend to be realizing you're kind of mid-50s so if you wait until you earn a good income which is your mid-50s before you start investing then you've kind of missed the boat and unfortunately you've not been able to take advantage of compound interest which we discuss in a previous video and compound interest is when the interest of your initial investment gains additional interest and that can be an extremely powerful tool over years and that basically requires you to save early it means that your money is working for you and your money is making money and that money goes to work another problem with neglecting wealth creation and concentrating early on income is that as your income increases you tend to work more which means as doctors the older we get the harder we work whereas in other professions as your finances your financial decisions and your investments begin to produce fruit you tend to attend work less and that is when you become less reliant on your income but more reliant on your assets if that makes sense another problem I've seen within doctors is that because we concentrate on career progression becoming educated becoming able becoming well-paid doctors if unfortunately you become ill seen doctors into their risk and ski accidents I'm unable to perform surgery for say three to six months in that time you find it very difficult to earn and if you have one revenue stream which is your job things can quickly get very difficult and I've heard of doctors almost becoming bankrupt because they've gone from relatively high salary down to very menial kind of sick bay so the next reason is that doctors love formal education we love education we study we want to learn new techniques we want to learn cutting it science we want to learn you know how are we going to best treat our patient what we don't like learning however is about money numbers finite when it comes to money most doctors will switch off and most doctors have not invested in personal education or personal finance we prefer more formal education but actually the best and most valuable education is the one that you can give yourself simply picking up books going on seminars paper courses pain for advice from financial advisers that is probably the most valuable education to get and what I've learned is that often it is not necessarily the most educated or most intelligent people that enjoy financial freedom if you look online you'll see several stories where they've compared the earnings of plumbers and doctors and you'll frequently see that plumbers end up being far wealthier than doctors because of their understanding of money most plumbers would have less school and instead they've started working at age of 18 have begun earning money far earlier than a doctor they begin saving if they're savvy they'll buy a property they may even invest in business ownership maybe owning the whole business or part of their business and as time goes on they make good financial decisions and actually are able to stop working and allow other people to work or at least a lot of investments to earn money for them whereas the opposite is said for the doctor because we spend time in school accumulating debt and not really being able to invest and be debt-free until we have perhaps in our 40s and 50s and for the younger generation coming through is certainly in the UK with far more debt I think that's gonna push things back even further so the next thing is more of a cultural thing with in the UK doctors don't like talking about money we don't work for money we work for patients however that is changing I don't know if you've seen in the media recently the way the government changed tax relief on pension contributions which made their senior doctors would be penalized financially for working extra and going beyond and so many of them voted with their feet and they're taking early retirement or refusing to take on additional shift as in the long run it will actually cost them money and besides the junior doctor contracts that is one of the first time that UK doctors have come out openly and spoken about how government decisions has adversely affected them so another reason doctors tend not to be wealthy is because of the middle-class mindset this is a common concept throughout many kind of wolf education texts and it's well recognized the middle-class enslaved themselves with debt and credit to buy the new car get a new holiday get their house sent their kids to that school wear these clothes and essentially keep up with the Joneses at the same time there's a mantra that the rich get richer the reason of rich get richer is because they do not purchase liabilities they purchase assets in other words they use their money to make more money whereas the middle-class tend to purchase liabilities and an asset is an appreciating commodity the rich buy assets are the poor buy liabilities the rich don't work for money they have learned to make their money work for them they use their income to purchase assets and then the assets to purchase the luxuries there's a saying that it's not about how much money you make but about how much money you keep until we kind of grasp that concept that we need to spend our life accumulating assets you can never be wealthy in this world it's not the smart who get ahead unfortunately it's the bowl now whilst doctors are intelligent people in general we tend to be institutionalized we like operating within framework we get uncomfortable functioning within that unknown it tends to be the risk takers who benefit financially the most all you have to do is look at some of the biggest success stories such as Mark Zuckerberg and Facebook people who tend to be more financially independent tend to be people who have been bold of risk takers people who've thought outside the box perhaps cornea alone spent time but he weren't actually earning any money and perhaps he even left a pretty bismal life until till their their labor began to bear fruit have you ever heard that saying that you are a combination of the six people you spend the most time with both doctors we tend to walk around in packs we'll sit there for hours and share tales from medical school about how we saved their life with nothing more than a marshmallow and an iPhone but that really isn't going to do much for your financial situation we're not likely to sit around and give each other business advice and talk about our financial decision making it just doesn't happen and I realized that as I got older and my friends group began to expand would be at dinner parties or social engagements and the conversation would generally be about business opportunities investment options that share business stories and even talk about international experiences and options that came up and so I realized that having a broad group of friends will certainly broaden your horizons open your eyes and change your perspective about what is possible and what is out there in the world the world's a big place and as doctors we tend to get relatively narrow field of view we tend to stick with what we know we tend to spend a lot of time with other doctors but having a diverse group of friends just shows you the world in a slightly different way so I certainly found myself become more free anyways I hope you found a video useful I am a full-time surgeon so I would appreciate your feedback drop me a comment let me know what you thought let me know if there's any more videos you want to see me make and I will definitely get to if you did enjoy it please make sure you subscribe share the video with anyone else you may find it useful make sure you check out my website dr. judith will be sharing way more on there till next time be good [Music]

Channel: DR JUDE

Views: 44,679

Keywords: day in the life of a medical student, doctor, earning per year, how much do doctors earn, how much do doctors make, how to get into medical school, how to prepare for med school, mcat, med student, medical school, medical school vlog, medical student, money, premed, preparing for medical school, what is medical school like, doctors eanings, consultant, surgeons, doctors in the uk

Id: o2wa-Fik4Bc

Length: 12min 26sec (746 seconds)

Published: Wed Oct 30 2019