Back in late 2013, I wrote a little book called The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing. That year, I was a newly minted millionaire (the original title of the book was Millionaire by 40), was a partner earning >$300,000 for about a year (much higher than my prior income), and The White Coat Investor wasn’t making anywhere near enough money to justify the time I was putting into it (about $5,000 in profit in 2012 and $20,000 in 2013).
The book was mostly a common-sense primer about how to manage money as a physician in a way that would lead to financial success. It has helped tens (hundreds?) of thousands of doctors, and it was mostly accurate and functioned as intended. But it wasn’t perfect. It wasn’t perfect because my crystal ball was not functional. A few economic changes have occurred over the last 12 years that make at least one chapter in the book look kind of silly.
That chapter is called The Big Squeeze.
The Big Squeeze was supposed to be physicians caught between the rock of flat-lining and even declining income and the hard place of increasing costs of medical school and student loans. That didn’t really pan out as expected at the time I wrote the chapter.
Physician Incomes
Physician incomes have continued to increase, at least on average. Here’s a recent Medscape survey slide that demonstrates the trend:
Here’s a similar slide from the 2017 survey:
I know that lots of doctors are making less than they used to, some doctors are working more just to keep the same income, and the general trend is for fewer and fewer doctors to be self-employed. But the fact remains that, at least on average, physician incomes went up, not down, over the last 12 years. Yes, I know a lot of that increase is just inflation. But if we use the 2024 number ($374,000) and that 2011 number ($206,000), that’s an annualized increase of 4.7%. Meanwhile, inflation from 2011 to 2024, as measured by CPI-U, increased by just 2.6% annualized. That includes the 2021-2023 inflation spike, so it’s clear that doctors’ incomes didn’t actually go down.
More information here:
16 Ways to Earn More Money as a Doctor
Will More Money Make Me Happier?
Residents Say Modest Salary Increases ‘a Disgrace,’ Some Believe They Deserve More Than Double Their Pay
The Cost of Medical School
Now that we’ve addressed the rock, let’s talk about the hard place. We’re talking about the cost of medical school. It is certainly true that median tuition and the cost of attendance have increased. Here’s a chart from Reddit demonstrating that, at least through 2016 or so:
But it didn’t increase nearly as much from 2013 until now; in fact, it basically flatlined as a percentage of median household income. More recent data shows a similar trend:
Yes, it looks like a steep line, but tuition and fees only increased from $50,400 to $58,900 over nine years. That’s 1.8% per year. CPI-U over those years increased by 3.1%. MD schools, at least, are CHEAPER now than they were in 2015, on an inflation-adjusted basis. This explains data like that shown in the graduating medical student survey each year.
I look at this thing every year, and for a LONG time (well before 2021), that median debt figure stayed between $195,000 and $207,000. It’s up to $220,000 now, but the fact remains that borrowing $220,000 to get a job that pays $374,000 per year is a GREAT financial investment. Medical students, at least US MD medical students, are not, on average, being squeezed too hard.
The situation is even better than this data looks. The general trend from 2013 until the passage of the OBBBA in mid-2025 has been for federal student loan policy to become more and more and more generous. Interest rates dropped precipitously, at least until 2022. Every new IDR that came along was more generous than the last. When SAVE was implemented, it was so good for borrowers that the states freaked out and took it to court (where it lost). Perhaps 50% of indebted doctors are taking jobs after training, at least for a few years, that qualify for Public Service Loan Forgiveness (PSLF). The pandemic-induced student loan holiday turned student loans from a burden into a no-payments-required, 0%-interest-rate breeze for 3 1/2 years. Some people received PSLF without ever paying even a five-figure total amount toward their student loans.
On average, doctors weren’t squeezed by dropping incomes and rising costs of education. I was wrong. I projected current trends at the time out into the future, and the future did not resemble the past. Now the pendulum has swung back a bit with OBBBA. Repayment Assistance Plan (RAP) is not nearly as good as SAVE was supposed to be, and new borrowers aren’t going to have the ability to pay for all of med school with public money. But PSLF was basically unchanged.
Even so, this is not the squeeze doctors are feeling. There are two squeezes they’re really feeling that I didn’t write about at all in 2013.
The Housing Crisis
The biggest financial issue in America today is the housing crisis, and that’s no different for doctors. The median home in America now costs more than $420,000. That’s a lot of money when the median household income is just $80,000. Buying a house that costs six times your income is a fool’s move. There is massive regional and neighborhood variation as well. In 2010, we bought our home for well under half a million dollars. Here’s a current Zillow map showing houses for sale in the area we looked at in 2010.
Nothing in my neighborhood has been listed for a six-figure amount for a long time. And Utah isn’t even really a high-cost-of-living area (HCOLA). Median housing prices in HCOLAs include:
- San Francisco: $1.27 million
- Washington DC: $594,000
- Boston: $780,000
- Manhattan: $1.17 million
And what kind of a doctor, earning in the top 1%-3%, wants to live in the MEDIAN house? The doctor houses cost twice that much. At least.
I should have had a chapter in that book telling you to buy your house now, even if you were still in junior high. Student loans aren’t the big problem in most young physicians’ financial lives. Their house/mortgage is.
More information here:
How to Buy a House the Right Way
How to Help Your Child Buy a Home
The Burnout Crisis
You know what else I missed while penning that book 12 years ago? How big a deal burnout would be. I recently had a discussion with a surgeon almost my age. He had been totally burned out, and the solution ended up being a change in the employment situation to one where he (and his spouse) were paid 1/3 less (at least initially) to regain control over their work environment and to exit a toxic one. This isn’t uncommon. In fact, it might be the norm to have burnout by mid-career.
Look at this chart from a recent Medscape survey.
Burnout is the biggest financial risk to your career. You can insure against disability but not burnout. This has become a much larger focus of what we do here at WCI over the last decade. Half of WCICON content is now about wellness and burnout, and those are often the best attended and most appreciated sessions.
The bottom line is that the Big Squeeze showed up after all, and being financially prepared for it was a good move. But the Big Squeeze wasn’t between dropping income and student loans. It was between housing costs and burnout.
What do you think? What have been the biggest financial challenges of your career? How big a role have maintaining income, dealing with student loans, buying housing, and staving off burnout taken?
