There can be multiple contributing factors. Medical-related expenses contribute to why physicians as a whole have far higher expenses than typical earners, separate from being “easy prey for purchasing annuities” or “exotic investments” in commodities. In surveys, it’s common for private practice physicians to spend >$600k/year in business overhead expenses. Depending on specialty and other factors, malpractice insurance + medical school debt could amount to $100k/year.
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My bank/financial S has told me the same
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But isn’t the share of physicians in private practice declining, and aren’t many of the business expenses of private practice paid before the money counts as income for the physician?
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Lots of speculating about physicians. I think there are as many types of doctors are there are speciality’s
Today there are very few single practitioners or even groups that are physician owned. It’s just not profitable anymore. You don’t have to believe me if you don’t want but a family member just sold their practice because they couldn’t make it. Says that it is the way of the past, now you are an employee of the hospital system or private equity.
I also know happy physicians who love their job, love what they do and like making a difference. As with all jobs, they don’t care for the endless paperwork, bad administration and all the normal things that others don’t like about their jobs. Jobs are that, a job that you work hard at and hopefully make a decent living. The one thing all physicians seem to agree on is that they’d rather not talk shop all the time. They want to do the normal things and talk about the normal stuff with their friends.
As far as spending money, I know ones who work a lot, spend a lot and I know people in different professions who do the same. And some who are frugal also. It’s all over the place.
I don’t really know why there seems to be this presumption that all people who happen to be in a certain profession are a certain way.
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While in decline, nearly half of physicians still work in private practice. It’s no doubt a significant portion that is influential towards physician expenses, as well as portion living paycheck to paycheck.
In this type of survey, the typical prompt is similar to “What is your total annual household income before taxes?”, leaving it up to the person filling out the survey whether they want to count income before or after business expenses, as well as what they want to consider as part of household income.
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There are single practitioners and physician owned practices still out there. The new model is going to hospital owned or private equity. I didn’t know that half of the practices are private but I think that it will become less and less over the years
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I have not read the thread since well, I am tired now. Lol.
But if you’re having issues living on this much then you’re living at a higher level then maybe you should be. On that much money you’re making life choices. Region definitely comes into play. That I get but there are still choices to make to help level this out.
It’s funny since now being so called retired I feel like I have more spendable money now then I did while working. I blame the kids 
. 
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Since private practices are smaller, the percentage of physicians in them is smaller than the percentage of practices that are private practices.
https://www.ama-assn.org/practice-management/private-practices/smaller-share-doctors-private-practice-ever says that 42.2% of physicians worked in private practices in 2024, down from 60.1% in 2012.
Also, a physician working in a private practice may not necessarily be the owner of the practice who has to deal with the business expenses and management.
Because they want to live the luxury life. Fancy cars, private schools, designer goods, country clubs etc.
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In some places or situations, it is a necessity. In others, a choice.
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Yes, that’s what I meant.
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The sense of security when you’re making >$500k and safety net is very different than those making $50k. You lose your $500k job, you have opportunities and likely a social network that will support you — all your wallstreet, doctor, lawyer, accountant buddies. So, my point is, they’re not exposing them to the same risks as much as those that make $50k and suddenly lose their job. I think that helps make sense (partly) why the some of the wealthy don’t save as much as they should— cuz they know they’re not going to be out in the street.
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Support in what way? I would think if for some reason you don’t have much of a safety net, losing your $500k job possibly means you have hefty mortgage payments, property taxes, possibly private school fees, possibly a full pay college student etc, maybe still paying off student loans etc - large monthly overheads to support that you can’t just suddenly cut off. Maybe you can give your leased car back but the others you can’t just suddenly stop without significant ramifications. Different than at $50k sure, but if that family is living paycheck to paycheck it implies high monthly expenses.
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This is the whole premise for “Your Friends and Neighbors!” You can always become a thief 
Don’t those high dollar jobs often come with pretty good severance packages? Much more so than the $50K jobs who likely get $0. Older s was telling me what his company gives out and my jaw hit the floor.
This is why “they” say you should have 6 months of living expenses in savings. Much easier to do when you’re a high earning. We were lucky to have 1 month when the kids were growing up
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If by support you mean referrals to new job opportunities, then yes, perhaps (although, no one will simply give you a job). But I doubt many would reach out to their network for financial help. There’s a lot of pressure among high-income earners to appear successful and maintain a certain lifestyle, and admitting they’re struggling financially would mean letting that facade slip.
No, not necessarily, unless there are special circumstances or it was negotiated as part of the offer. Otherwise, they’re subject to the same severance policies as other employees. And even a generous package only buys you so much time, especially if you have a high cost of living and struggle to find a comparable job. Keep in mind that the corporate pyramid narrows significantly at senior levels, so comparable opportunities can be hard to come by.
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Well, again i would think it’s relative. Is it easier to save when you’re high income, of course; is it easier to save 6 months of “living expenses”, not necessarily- after all this article is about living “paycheck to paycheck”. And as I alluded to above, it’s not that easy to suddenly adjust your high monthly spending to a new reality. Of course I am not saying I think living like this is smart - but people do.
Not sure how prevalent this is in the US but I know in some places, it’s not uncommon for someone to have the living/reception areas of their home (where guests might hang out) full of expensive furniture and fittings, and the rest of the house (bedrooms etc) done super cheap, because the emphasis is on presenting the right image.
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I’m dismissive of the results of this survey, as I’ll explain below. To reiterate what some others have said, this is how people feel. Meaning, it’s not necessarily a reflection of what they actually have in savings or their overall financial condition.
This was the actual question:
There is a lot of wiggle room in those choices. To start with, ‘living paycheck to paycheck’ wasn’t defined. I could easily see people checking that they are living paycheck to paycheck, even though they might be making regular 401K, Roth, and/or 529 plan contributions. There were certainly times I would have chosen the first option, because I did feel it was a struggle to save (we were maxing out 401Ks and putting $1K/month into each kid’s 529 plan their entire lives), and our financial goals seemed so far away. Some people are just wired to be relatively more anxious about finances/financial security, whether because of their makeup or the fact that life has so many uncertainties. I’m definitely in that camp.
With all that said, the cost of life has outpaced income for decades. So, I am not surprised more people would be struggling to save…said differently, things aren’t the same as they were when many of us were in our 20s, 30s, 40s. I’m also not saying there aren’t people living beyond their means and/or making poor financial decisions. We know overall financial literacy is low in the US, and this can affect people of all education levels.
Separately, I don’t understand why threads like this bring out such high levels of judgment and smugness.
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I was coming on to this thread to say the same thing -’ Holy judgement batman!
One thing I don’t think is mentioned is that those earning $500,000+ don’t have 9-5 jobs. They are working 20 hours a day sometimes. Or working 60 days in a row without a day off. They do not have time to do some of the cost saving things I’ve seen upthread (commute longer to cheaper areas to live, eg). I always say there’s a REASON these jobs pay so much.
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Whenever I have been let go (not for cause), I’ve had 6months-1 yr severance. On Wall Street they also often give “garden leave,” which is 3 months - 6 months, during that time they would pay you and you couldn’t work for another company.
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Let’s be clear that this isn’t standard across the board or available to all employees. It applies to senior leaders like VPs and Managing Directors and above, and three months is more common. Six months is less common, and a year is rarer still, unless the employee has a long tenure and/or seniority.
Lower-level employees typically don’t get more than two or maybe four weeks. There are also nuances: severance pay may include just base pay, but perhaps not a prorated bonus, and they may lose some or all unvested RSUs. European banks tend to be more generous than US ones.
It also matters what the employee’s tenure and seniority are (an MD who ran a large business isn’t the same as an MD who’s a senior individual contributor). Some people also negotiate severance into their employment contract.
I would definitely not make a broad statement about severance pay or make it sound like everyone receives such generous severance.
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