In response to my last post Is an MD Worth It, I received the following email from one of my esteemed classmates. I share it with their permission:
I’m going to make a point for arguing in favor of one of your more important assumptions, that being the annual living dollar amount you chose. $50K/year is more than most American families ever get to spend…not just on themselves, but on their kids, too. One of the luxuries of the professions you analyzed (doctor, engineer) is that both of these will easily make more than $50K, and right out of the gate at that. The same cannot be said for retail managers, insurance salesmen, or pretty much any job in a factory, in fast food, in customer service, or in lower-level office work. Many of those professions require years to hit that $50K mark, if ever at all. When was the last time you heard of a fast-food worker making $50K? Not even the managers make that.
The point you made that I’m reinforcing here is that sometimes in medicine, and in professions that offer similar earning potential, people become accustomed to an expected lifestyle. That lifestyle is often one of excess, yet it is an expectation that many have. Just look around at people you know in our class, or in medicine. How many carry prada bags? How many have never repeated an outfit? How many do you see posting dinner pictures from fancy restaurants weekly? Many came from households with 6 bedrooms, two kitchens, manicured lawns, Benz/Beemers, kids in private school…all of which are luxuries and 100% unnecessary in anyone’s life. An argument can be made for doing away with all of these things…even when one does have the means to afford them. That argument could be put forth both on the philosophical principle that excess is immoral, and on the prudent idea that saving money is better than spending it. Obviously, the choice is personal and circumstantial, but it highlights the idea that we forget how fortunate we are…even in having a bunch of debt. Living off of $50K/year is a luxury of which many Americans will never “have the privilege”, just as many of us will never know what it feels like to “have to” live off of that amount.
So, you might promote the $50K assumption a little more heavily – in my humble opinion, people only stand to gain by learning how to live with a little less…by taking joy from relationships, friendships, pets, beliefs, and hobbies instead of from material status. By learning how to cook. By getting more out of an afternoon of cycling instead of one spent on a yacht.
Over my life, I hope to give away more than I use for myself. Can’t take it with you, anyway.
This email succinctly sums up the principles of this blog. Do I want you to build a giant cash stash? Absolutely. But if you want to become rich for the sole purpose of surrounding yourself with gold plated hummers, crocodile skin walls, and a butler named Alfred Pennyworth, then you’ve missed the mark.
So what’s the point of saving dutifully and building an epic cash stash, if not to freely indulge in the material luxuries of life? Let me illustrate with a personal experience. During one of my medical school interviews I was asked by a physician why I was pursuing a career in health care. I proudly replied that I chose medicine over business because I wanted to serve people. The physician agreed with me that doctors have the potential to help a good number of people, but then he said, “However, I am good friends with business genius Bill Marriott, and his riches have allowed him to bless more lives than I as a doctor could ever hope to touch.” I learned an important lesson that day. Seeking riches is a good thing, if done for the right reason.
The purpose of accruing money should be to bless lives. The fictional doctor in my previous post lived off 50k/year and invested the rest, ending up with a cash stash of $14,805,039. If the doctor followed the universal rule of withdrawing 4% during retirement, this would yield a staggering $592,201 a year for the rest of forever. Think about it. How much good could you do if you had half a million dollars to give away each year? Would this make you happier than if you were surrounded by your fleet of golden hummers? Absolutely.
But you shouldn’t wait until you’re retired to give to charity. Now is the time to develop a charitable mindset. Try adding a charity category in your budget and devoting enough money per month that it hurts a little. This is the best way to overcome wussy-pants-consumerism-syndrome, and will help you be happy while living on less.