Well said @Aaron Hunt . I know there are some but there are not many physicians out there who became Drs just because of the money. It's a calling-a passion. The goal is to maximize their financial progress so they can live their passion on their terms.
Same with Real estate - Not everyone has the true passion for real estate investing. For so many I see it is simply perceived as the easiest means to an end. I'm just not sure what the end is in those cases.
To have a passion like the healing arts is a gift. To have the freedom to exercise that gift in the way you choose without regard to the financial side of it is the greatest gift. That's where something like real estate investing can supplement.
I work with a lot of doctors and I can tell you that their biggest problem is their expenses. If you ever played cashflow the board game... it’s is the teach or mechanic who has the highest likelihood of winning.
The doctors position in real life is tough because there is little pain. As an engineer we don’t make that much so we have to scheme our way out of it. There is a weak WHY for doctors.
Doctors don't have cash flow, they get a salary. Your question is the difference between a W2 salary and investment cash flow. Cash flow is the result of your money doing the work, W2 income is the result of you doing the work.
This is a fundamental concept that everyone needs to understand.
To become a doctor you invest 8+ years of time and well over $100K into your education.
If you are trying to chose between becoming a doctor or a real estate investor, there is no doubt you can become financially independent much faster in real estate.
There are even other career options that give you better pay to investment ratio. You really should become a doctor because you love the profession, not just as a paycheck. It is way too much time investment to be only for the money.
Just my opinion, good luck.
You’re asking this on a real estate investment forum, so you’re getting what’s expected. Go ask the same question on a physician forum and see what replies you get.
Why compare docs to real estate investments, what about most any other job that requires years of education and you get paid for your labor?
Reading this thread is actually funny......but I agree it’s kind of unfair to compare a doctor to a landlord. A better comparison would be someone in real estate such as a flipper, a great wholesaler, a great realtor(the last two are very hard to find nowadays since everyone wants to become a realtor and or wholesale). It’s very possible for those three occupations to do well beyond what a doctor salary can(if the inventory is good and available). But I honestly think a better comparison would be a doctor and a CPA, almost any kind of engineer, a lawyer, and a dentist. But at the end of the day as most people have mentioned those are just employees. If you really want to obtain freedom of any kind it’s almost a necessity to beocme the employer instead of employee. Economically speaking that is....
There have only been 4 ways to survive throughout mankind. These four ways are pretty much solidified in stone.
1. Business owner- this includes real estate as well because it is a business(certain parts). Wholesaling is a business(when done correctly) . Fix and Flipping is a business. Being a landlord is a business. Owning your own brokerage is a business. Owning patents. Owning Trademarks. Own your own software company. Owning your own pharmaceutical company. Being partial owner of anything. I think everyone is seeing the pattern I’m going here....your the employer and must hire employees and or implement business systems for the business. Otherwise self employment is really just a job that you imprison for yourself.....
2. Employee- where most people are in the world. You get a salary(fixed monthly pay) or paid hourly(fixed hourly pay as most employers don’t want you to go overtime) some employees enjoy a pretty good life as some of the job titles I mentioned above. This isn’t necessarily a bad thing as long as you know what you are and must know your on the clock. I mean that figuratively and literally because if you stay an employee your entire life without having money to live off for retirement...you automatically go onto this......
3. Government assistance- if you don’t have enough money saved up or actual real investments,this is where most people will be. Because they don’t have enough money to live off. SSI, and other government incentives are all just a nice way of basically saying the government will take care of you(more so control). Backtracking a bit.......it’s not entirely a bad thing for someone transitioning into another job to use this assistance because this is what it’s for, temporary assistance.
4. Rob and steal- I don’t want to say too much on this but when there are no other options this is what people must do to survive
Those 4 things are in order of what a person can do in order to survive. Its one of those things that...if you don’t realize what your doing in life and direct your path to become 1 you will fall to number 3. It’s just my two cents though.
@Bryan Tasumi Things get complicated once you know what goes into the life of a doctor making $300K. They’ll have to pay for property management. They can decide (on a whim) to fly out and walk a property out-of-state. So you “full-time real estate investor” has a number of operating advantages. They just don’t have the capital. And a lot of doctors (the standard ones you see for a check-up) don’t make $300K a year, have student loans, etc. But that’s another story. And if you’re a specialist, own your own practice, etc. you probably make more. Anyway, the other thing to factor in is that someone making $300K/year (typically) doesn’t want more taxable income. They want NOI to be offset by mortgage interest and depreciation. Nor do they (typically) want to spend free time putting in sweat equity, calling contractors for a BRRRRRRRRRR, etc. I think it’s why you see a lot of these professionals in syndications. And while doctors are usually incredibly smart, I’ve yet to see one that gets a pro-forma even close to correct on their first try.
Anyway, I’d the ideal combo is “doctor with a spouse with free time” that can deploy capital, keep their eye on properties, vet deals, etc.
Originally posted by @James Green :
@Bryan Tasumi most doctors don't make $300k, anywhere in the US. They most likely need to specialize and practice in a big city.
Incorrect, and I know this for sure. I just signed a standard contract pretty close to where you are, non-specialized, and average sized market. There is an acute shortage of non-specialized providers and it is leading to higher pay.
If you Google physician compensation it is always way under what physicians really make. It’s kind of a known within the field to let it be and not mess with public perception. I can definitely say the numbers are way off.
My compensation will be above that and so is every doctor I work with, in potentially the largest organization around. Most of my colleagues are going to make a lot more than me.
As for RE, I managed my own rental initially to learn the ropes. Even did minor plumbing work, removed/installed toilet, etc. Then again, I even do my own brake/rotor jobs on my car so I may be an exception here. Most my physician colleagues think I’m nuts for that.
That being said, I did hire a property manager for my units in Vegas for when I move out. Always nice to be able to expense occasional visits to Vegas but it’s a long flight!
I really dont have much to contribute here that wasnt already said but I enjoy seeing some highly successful people jump in and give their opinions. So thanks to @Bryan Tasumi for starting this.
My one observation is this. I think its easier to live cheaply when you make less money. And so I think its easier for a janitor to get use real estate to get out of the rat race then a doctor. People who make 300K a year or more need 300K a year or more to live. Its far easier to build a 5K a month cash flow than a 25K a month cashflow. Once you get to 5K and out of the rat race then you can pour on the gas and make the 300K+ we all want.
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