Doctor (Physician) Salaries – Not as High as You Think

Once upon a time, when I was still in junior high school, I aspired to be a doctor.  Why?  For all the wrong reasons.  First, because my parents wanted me to be one, and second because it was a profession that made a lot of money.  Fortunately, after doing some research in high school about what’s required to be a doctor, I realized that being a doctor is not about the money, it’s about the passion for practicing medicine.

It takes real commitment to be a physician.  To become a specialist, it takes at least a decade of training/education, long hours, low pay, and a large amount of loans (for some) to finally make it to the big leagues.  Even once you’ve graduated, most specialties require long hours along with periodically being on call.

Back to the topic at hand, doctor salaries.  When most of you think about doctor salaries, most think that they are paid like rock stars.  There are some numbers thrown around like some make $500,000/year and more, which is true for some, but not for all.  While the initial figures are high, doctors have to pay a rather large overhead fee which doesn’t include income tax.  This overhead fee includes insurance coverage, a provincial government fee and other misc expenses.

Below is a table that is a bit dated (2005), but includes the average salaries of various doctor specialties in Canada.  I added a third column to the original table to include the overhead as a percentage of their salary.

Gross and net earnings rose in 2005
Gross Net Overhead
Dermatologists $360,000 $240,000 33.0%
Internists $310,000 $200,000 35.5%
Ob/gyns $320,000 $195,000 40.4%
Pediatricians $250,000 $160,000 36.0%
Psychiatrists $190.000 $160.000 15.8%
GPs $260,000 $155,000 40.4%

As you can see from the table, the average doctor pays around 35% of their salary to overhead fees.  What’s left over is then taxed at the highest income tax rate.  Mind you, making a $155,000+ salary (in 2005) is pretty darn good, but for the work and time commitment that doctors put in, they deserve more.

Back to you, was your impression that doctors make more than they actually do?

Any doctor readers out there?  Have doctor salaries increased much since 2005?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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The Financial Blogger
12 years ago

I deal with several doctors and I noticed something very strange:
about half of them don’t save much money! They make 250+ and they still have a hard time having more than 300-400K in their RRSP’s at the age of 50!

When they just finished school, they usually get a 400K house and drive a nice car upfront. Since bank will lend them up to 200K unsecured credit, having a mortgage is quite easy!

Four Pillars
12 years ago

I know a couple of specialists and I knew they are in the $300k range. I’m really surprised that GPs make $250k? They have several years less training than specialists so I assumed they would be in the $100-$150k range.

I think the lack of a good income for so many years is the drawback. I believe interns make around $50k-$60k and of course students make less than that (if anything). Meanwhile all your friends will be outearning you for many years until you finally start making the big bucks.

Very interesting topic!

12 years ago

Those numbers look high to me. I bet they are much less here in Quebec.

12 years ago

FT, I’ve got several close friends who are doctors, and those numbers are pretty much spot on. For doctors in NL, the numbers are currently just a little shy of the 2005 numbers you’ve got above- I know this because I was recently in a prolonged debate about salaries with a doctor friend after she took issue with my post about the raise package for gyn oncologists, and I got quite a bit of info from her.

I don’t know if it’s fair to say that physicians deserve more- yes, they work long hours and are well educated, but so are any number of other professions that don’t make anywhere near as much as doctors (I’m thinking many engineers, nurses, academics, tradespeople, etc.). Most physicians will be in the top 1% of income earners across the country, and for people who have their salaries paid by the public purse, that’s not too shabby.

12 years ago

The overhead rates here are roughly the same- 30-40% for most practices. The GP numbers that I have seen show that GPs on a fee for service basis (this would be the majority) usually make around $240k, while those who are salaried make less- closer to $150k.There can often be hefty retention bonuses as well ($30k +).

12 years ago

The overhead is what usually impacts a physicians ability to earn when their billing has certain limitations. GP’s, after costs, don’t really make an astounding amount of money even with 3-4 physicians in a mutually shared office. This is why you’re seeing teams of 2-4 grouping together to combine costs so that its more economical over the long run for them.

12 years ago

My partner is in medical school and plans to practice Ob/gyn. She’ll be a resident (aka intern) next year and that salary depends on the province. Across Canada, a resident’s salary varies. For Ob/gyn, I believe it’s between 40-50,000/year. Of course, most new doctors have a lot more student debt than other recent grads. She expects to have about $150,000 in debt by the time she graduates. It makes my $20,000 seem tiny, but I’ll never make six figures.

12 years ago

Once you get through it you have a job for life though, right? That’s a bigger asset than an engineering degree. Every doctor I’ve met in Toronto appears completely miserable, although whether that’s the pay or not I don’t know. Our NYC doctors used to complain endlessly about insurance paperwork. I think the main benefit of the job is never having to sit shivering in a clinic waiting room for four hours. Well, that and seeing how proud your mother is.

Dividend Growth Investor
12 years ago

I guess another thing to think about the percentag of people that go to medical school and start interning but actually end up making the big bucks mentioned in FT’s chart?

Imagine accumulating a 200K debt before you realize that medicine is not for you :-)

FrugalDoc ;)
12 years ago

Let me put in my 2 cents as an emergency physician and regular reader.

I think the numbers are likely a fair estimate of today’s situation, although those overheads sound quite high, especially considering the number of doctors who practice exclusively in the hospital.

I went into medicine for ‘the right reasons,’ thinking that I wouldn’t really be paid that much, and was well aware of overhead issues and being paid effectively less than minimum wage during residency (interning). But now that I’ve been working for over a year, other than rock star and a few other rare jobs, I find it hard to think of a better job. I love the work (not true of all doctors for sure), I get an almost embarrassing amount of respect from society, I can work anywhere with ultimate job security, I can reap the tax benefits of incorporation, and I gross as much as dermatologists in 2005, working 13 shifts a month. As well, since I work in hospital, my overhead is low – parking, books, lawyer/accountant fee for incorpoartion, professional memberships.

There are drawbacks. I must admit that the overhead and running a business side of family practice scared me off even though it’s an incredibly rewarding job otherwise. Many of my colleagues ended up with >100K in debts. Some of them could have scaled their lifestyle, though. I was also training at times when I could have had a job in other professions.

In general, I agree with the points of this article. Someone going into medicine should do it for the right reasons. There are too many miserable doctors who didn’t, and there are better things to do if you want to get rich. That being said, I’m realizing now that it’s a pretty freakin’ incredible job.

Dividend Growth Investor: the percentage of people who go to medical school and end up making the bucks in the chart is very high. Unlike many other professions, the barriers in Canada to becoming a doctor are mostly the admissions process. There is a very low drop out rate or failure rate after that, and, in general, we don’t have intense competition for jobs once in the workforce.

Thicken My Wallet
12 years ago

Sounds about right…

You have to remember that the salary also represents lost years of income for being in school for 7(?) years and then being paid slave wages being a resident.

David V
12 years ago

Someone told me once that a high school graduate will make more money as an electrician then a doctor. I guess you can start working as an electrician immediately (well working towards the certification, but you’re still making money) versus paying money out to go to school for years.

But we look up to doctors and down on electricians. I’m being a little dramatic with that statement.

Little Ms.Scrooge
12 years ago

Let me add a little info about docs from other countries who immigrate to Canada. For many of them, they have to prove themselves all over again with many exams. So for somebody who finished their basic medical training, then there is specialisation which takes a few more years and then a continent move can set you back a another 4-5 years atleast. I know many docs who have moved atleast 2 continents and in their late 40s or early 50s, still struggle to achieve a networth like yours FT. And the time away from family, how do you put a price on that? So even if you start your training for all the right reasons, your professional happiness ultimately depends on where you end up and how you are treated there. Does anyone remember reading about Britain sending as many as 30,000 foreign trained docs out in 2006-7? Some had been waiting around for 1-2 years in the hope of getting into specialist training. That does not sound like job security. Even in Canada today there are many foreign trained docs who work in other fields not related to medicine because they have not been able to get into the system.
Just my 2 bits.

Work no more
12 years ago

Doctors with very high income usually incorporate. So they are only taxed at around 15% (BC 2008 rate for CCPC) and they can deduct lots of their expenses through the company. For investment, they can create a holding company to do so. They pay themselves low salaries from the company, so on the T1, they won’t get taxed at a high tax rate and the salaries are deductible for the company.

Jordan Clark
12 years ago

Does anyone have any stats on what a laser eye surgery optometrist makes? At $500-800/eye for less then an hour of time I imagine they’re easily grossing over a million or two a year. So after whatever cut they pay to Lasik and other overhead they’re still making a much more then a regular doctor.

FrugalDoc ;)
12 years ago

FrugalTrader: About incorporating. Wrong about the liability protection. Docs get none from incorporating, unlike other businesses. And the tax does not work out the same when you take advantage of strategies like paying to lower income family members, universal life insurance, tax deferral, and paying yourself later when you have less income.

Little Ms. Scrooge: Great point about foreign trained docs. They have it tough, depending on where they were trained. I think it’s important that we ensure competency, but I do not know why we make it so hard for foreign docs.

FrugalDoc ;)
12 years ago

There are 3 regions with different liability fees: Ontario, Quebec, and the rest of Canada. The highest rates are in Ontario, ranging from about 2000 to over 50000 (for OB Gyn). The good news is the prov. government reimburses the fees in Ontario (and I believe the other provinces) to lock them at 1986 rates. The fee for emergency is about $7700 but I pay $1500. Gynecologists only pay $4900 of the about $50000 fee.

Liability insurance is a huge problem in the US.

12 years ago

Good Post FT.

I have to completely disagree with the statement that they should make more than this. Lets be very conservative and say they have an extra 100k in dept from an Engineer, and take 4 more years to start work. Being very very rough, ignoring intern wages, ignoring the fact an Engineer’s salary also starts low and slowly increases, ignoring the preference for doctors to incorporate and save on taxs, and using a very bad rate like 10%, if the Engineer starts @ 60k/year, the total difference after 4 years would be somewhere around 300k.

Make than into an annuity @ 10% and that translates into a doctor making +30k/year to be “even”, but as above it seems the average is MUCH MUCH higher. Change my very bad assumptions into something more realistic and that number drops from there. I’d say in general, doctor’s salaries are unjustly inflated.

12 years ago

In reference to the Financial Blogger’s comment, if you’ve read the book “Millionaire Next Door” it seems the trend you’ve noticed is similar to what the authors found in their study. Of all the professions they studied, doctors tended to have the lowest net worth despite the high incomes.

I would think after years of studying hard and then working for peanuts for a couple years, they feel they deserve to splurge. Who can blame them in a way?

I went to university long enough to have earned M.D. status (8 years) but unfortunately I don’t make anywhere near the numbers in the chart so the lost years of income are not only a factor for doctors but also for those of us that either changed our minds (my situation) or partied too hard (also my situation ;) ).

12 years ago

I’m a Family Physician in the Midwestern US. I have talked with friends in similar situations and it seems that the take home pay starting out is in the $125,000 range. Much less than on your table.

12 years ago

FT: Most of the loans are from a bank credit line with a prime interest rate. It won’t happen for another 5.5 years, but I like to think we’ll be smart about money when the jump to a “real” salary happens. As I’ve mentioned we have a lot of debt between us, so I hope we’ll focus on that before we make any changes to our lifestyle.

12 years ago

I’m a doc in Toronto, and I love what I do. And I’m about the least miserable person you’ll ever meet. However, it’s taken me 19 years after high school, to get to where I am today. I graduated relatively “quickly”: graduated high school, did my 4 years Bachelors in 3 years, 4 years MD, 4 years of residency, 3 years of subspeciality, and 5 years of a PhD.

I’m not a typical doc, in the sense that I have a PhD, on top of my MD, that allows me to have a research career to do what I love to do.

When I think of the opportunity cost, (and I’m a health economist), it’s astronomically big. I could have had the safe and comfortable life, but I took risks, and in many ways, I’m being compensated for it.

To be honest, I worked hard while I was doing my PhD: working to pay the bills, and supporting a family. Between school and work, I was putting in upwards of 100-110 hours a week. It was tough, but thankfully, I had a supportive girlfriend, now wife.

I have low overhead nowadays, which means my $250K starting salary plus bonuses can pay off my over $250K in debt, and in 2 years, I’ve cleared my debt. When I started 2 years ago, I had a -$100K net worth, and now, I’m bordering on 200K, and climbing relatively quickly.

If I set-up an office, I’m sure I could make $500K+, but that has no interest for me. I couldn’t do day-in, day-out office work. It just has little interest for me.

FT: The salaries have gone up significantly in the past 5 years, secondary to the push from Alberta and BC. I know there was approximately a 20-30% raise across the board in Ontario about 3 years ago, and the recent contract calls for a 16.5% raise over the next 4 years.

Little Ms. Scrouge: The system pays alot to make a doctor, and the return is something called “residency”, where you’re underpaid and overworked. (Actually, I think my residency was wonderful … I work far harder as a staff physician, but I guess I’m compensated better now.) Foreign physicians should also “pay their dues.” There’s a wide variation on the quality of foreign physicians. Some really drain our system, and refer everything, to avoid legal liability. Some are extremely competent and incredible value. But there are also wide ethical issues on our role in the “brain drain” in the global professions market that would be an entirely different discussion. I’ve also seen those let into our system that are clinically extremely scary. Canada used to be the most difficult health care system to get into, but there’s a value to ensuring the public can trust the health care it does get. Quantity does not always outweigh quality.

I know why I do what I do. If I won 10 million dollars tomorrow and didn’t have to work, I’d still do what I do. I love what I do. I love making people better. I love researching challenging and what people once deemed, impossible questions.

I wake up excited and wanting to be at work. I get to save lives, find cures, and give hope to people. As a dear mentor of mine said, “For the privilege to give this joy in people’s lives, I should be the one paying for the privilege.”

FT: Thanks for the post …

12 years ago

In my first two years of university I considered medicine as a career path. I ultimately decided against it because my anesthesiologist cousin told me I better really want it or it won’t be worth it. And that is absolutely true. Being a physician, I suspect, takes a great deal of personal sacrifice, especially the schooling part, and the job can be very demanding not only emotionally, but physically, and socially as well, as it does not often leave as much time for family as one might hope.

For those interested in healthcare as a career, I would tell you to consider pharmacy. I did, and after 6 years of university, I was making $55 an hour my first day after graduation. Two years later I took a job for $60 an hour, 40 hours a week, no overtime, 9:30-6:00 with a half-hour lunch, Monday-Friday, no weekends, no holidays, with a $20000 signing bonus and potential for significant performance bonuses every year. The career is extremely rewarding as people also trust and respect pharmacists, I get to help people every day understand their medications and health, I get to learn every day about a field that interests me a great deal, and the best part: I have ample time to spend with my family. Oh, and no overhead.

To be fair, I am in a high demand market, but even in large cities where pharmacists are a dime a dozen, the average wage is still $45-50 an hour. Something to think about if you’re one considering a health-related career.

12 years ago


I have 5 good friends that are pharmacists (my 1st undergrad was Biology). They work in various cities in North America. Not one of them works 9-5 with no weekends, no holidays and they’ve been pharmacists for 10 years. It seems you’re very lucky where you’re at because from what I’ve seen, that type of schedule is very atypical. The salaries are quote nice though, if you can get past the schedules.

Jeff English
12 years ago

A lot of this has been canvassed already – but a huge point is that doctor’s rarely have the overhead of an office and a nurse anymore. Or the government subsidizes the costs of that office.

I would also point out that doctor’s – either in the hospital – or in an office – always collect 100% of what they bill. Unlike other professions – there is no concern about the “accounts receivable”. Dentistry is very similar in that – insurance pays for almost everything – so there’s not much concern about overhead there either. (Dentistry is a good deal because of that – but the overhead is really a concern in that profession – unlike medicine).

The other thing is that Doctor’s get a ridiculous amount of respect – some earned – but a lot – unearned. It is probably the one profession – where you can not know what is really wrong – and simply say – I’ll send you along to the guy who really knows – but you can’t see him for three months.

I’ve also had the experience where a doctor will try two or three different medications to heal something and you have to keep coming back to see him or her. This does not give me a lot of faith in their abilities – and I see more and more that doctors are “guessing” for lack of a better term.

Anyways – it might be a tough road – but you know what – what other profession do you have guaranteed employment – I mean – when was the last time you heard of any discipline proceedings where the Doctor was not allowed to practice?

I have a hard time believing that the answer always is – pay them more – if they truly loved what they were doing – they would simply do it. A job is a job – no matter how you cut it.

Now the real guys making a killing are investment bankers – get your MBA – hit the right job – get some big bonus money – and you never have to work again – plus – it seems that even if you screw up – the gov’t will bail you out – you’ll still get paid – and you can say that you didn’t see it coming – even though you were paid millions of dollars to see that very thing.

Tangents are a terrible thing.

12 years ago

I would agree with previous commenters that I am very lucky in terms of schedule and it will not remain this way forever, as I am at a new store so we are slow for now. I did work at another company where I had quite a few 4pm-midnight shifts. But even with the schedule challenges that exist sometimes, I have rarely worked more than 40 hours in a week.

12 years ago

Great article and follow-up comments. One could spend hours addressing the many points made.

I think the numbers are not far off for averages. Obviously we are looking at a bell curve with a leftward skew and the numbers almost certainly only represent doctors that are billing the system in some way and not those who have decided that the life is not for them. Increases have not been very large since 2005. My recollection in Ontario was that there was a fair increase in 2005 with some retroactive pay. This was after many years with increases in fees that were far below the rate of inflation. The numbers for the newest proposal are again below the current rate of inflation. (even the one given by the government!)

Definitely don’t go into medicine for the money! In Canada, at least, it is still a calling.

I became a specialist in a fairly efficient manner – 3 years engineering, 4 years medicine, 1 year intern, 4 years residency, 3 years subspecialty. I was fortunate enough to do medical school when it was still less than 4k a year and also at a time when interns/residents were actually starting to get paid. In my final year of residency I think it was 50k, interestingly in my final year of subspecialty training it was 40k! Hourly rates – let’s just say there were many weeks when I spent more hours in the hospital than out. Residents now are paid somewhat more but they are getting hammered by medical school tuitions that are 3 times or more higher.

As far as modest RRSPs go – how could it be otherwise. I am 50. I maxed my contributions every year once I had an income, invested fairly reasonably, didn’t get caught in the bubble and was still less than 400k before the latest market fun.

If you are gifted enough to get into medicine but you want the big money do the MBA or start your own business. Put in the same hours with the same dedication and your numbers should look better. Not as sure on satisfaction.

Job security – yes. You are always needed somewhere. Not necessarily where you want to be but somewhere. Many specialists need a hospital to practice – if there are no openings – well see you later. Few specialist residents are able to set up practice in their ideal place. Battles have been fought over governments restricting places of practice.

No overhead – really? A minority – think anaesthesiologists or ER docs. But then of course you have less autonomy. The former group especially. Overhead continues to be a major problem for most docs. The reason most don’t have nurses in their offices is because they can’t afford to have them. I share a busy office with 8 MDs. We have 4 nurses and 10 other support staff. The overhead numbers sound about right. Some hospitals do provide support staff in clinics run in hospital – these tend to be proportionally less efficient than non-hospital clinics.

Foreign docs – don’t get me started. Canada should be ashamed to be taking doctors and nurses from developing countries where they are desperately needed and suggesting that they are easily employed in their professions. There are huge variations in training and societal expectations around the world. Canadian trained doctors are among the best in the world (I may have a slight bias – although I did do some of my training in the US and have worked on 4 continents). This is a result of the entire education system as well as the specific style of medical education and a huge exposure to patients during the apprenticeship of clerkship, internship and residency. It is also the result of the selection process for medical school. And on, and on – as I said don’t get me started.

Good point on the Lasik question. Turns out that finding procedures that can be billed outside of the government’s fee schedule is a growth industry. Some relatively simple quick procedures are earning folks more than the most complicated surgeries that can take hours and require a large team and hospital resources. Remember that the most skilled surgeon in the country still only gets what the government says for doing the most complicated case imaginable. Most would be shocked how little that amount is.

Oh yes, we are all government employees. Oh wait – no pension, no medical, no dental, no disability, no sick days, no maternity leave, no paternity leave, no paid vacation…

Turns out that doing those on-call shifts is the health equivalent of smoking a pack a day for life.

But there is the satisfaction.

More than ’nuff said!

12 years ago

personally I think the entire funding scheme is a farce! we pay our sports’ players millions of $ to play a couple score games per year to entertain us, but pay healthcare professionals a pittance to keep us alive! true gov’t irony dont you think?

12 years ago

I am an intern in California, and have matched into a Radiology residency. I’ll become a specialist (assuming no setbacks in the next 5 years) relatively quickly – 4 years of college, 4 of med school, and 5 for my residency. Now, I was lucky enough to be able to match into a competitive, well paying salary. Speaking with fellows who are looking for jobs, they were able to get starting salaries around $300-350k with a decent lifestyle (50-60 hr work week, occasional night calls). This is about as high as it gets (outside of possibly radiation oncology and cardiothoracic surgery, maybe some more commercial-minded plastic surgeons or ophthalmologists).

Now this seems great, until you factor in how much longer it takes and how little money you make until you start. 8 years of schooling where you PAY $20-40k in tuition. This year I am making $38k and working about 80 hours a week. Over the next 5 years my salary goes up about $2-3k per year, only because I live in an area that has higher living costs. So, in 5 years I make about $250k gross income. And I took 8 years of learning to get to that point, which set me back $300k, at least. That’s 13 years of schooling and training, for a net of -$50k.

What about my college classmates who graduated and went into investment banking? 4 years of undergrad at about $120k, then start making at least $100-150k per year. At the end of my residency, they will have netted at least $1m assuming some upward movement. Even taking out the higher taxes, they are probably $600-700k ahead.

Now how about someone who finishes high school and works at McDonald’s or Starbucks or some other low level job right out of high school? Even if they start at $15k a year, and get 10% raises each year, at the end of 13 years they have grossed $350k, and have no debt.

So I will be $400k behind the slowly advancing fast food restaurant worker, with significant debt (somewhere in the $400k range), at the age of 31. Mr high school graduate is now an assistant manager making $50k to my $300k. He nets maybe $30k after taxes, while I net maybe $175k. And I need to pay another $25k in interest, leaving me $150k, or $120k/year ahead. So it takes me until I’m 40 before I’m back even (financially) with now Mr. Supervising Manager. And this is with one of the highest paying physician jobs available. If I go into family practice, I might be 50 before I’m even.

I’m not asking for pity. I love my profession, and don’t regret it for a minute. But I would seriously need to reconsider if significant cuts in pay were needed to provide universal health care, or because of reduced medicare reimbursement rates. I would be very concerned for the future if medicine became less and less desirable, and our bright minds went somewhere else.

12 years ago

Also, as a response to Jeff English – there are plenty of jobs where people do not know what they are doing. And, we are limited by the information we can get from the patient and from lab/imaging tests. I don’t know what situations you are thinking about in particular, but sometimes you just need to try multiple medications, or send someone off to a specialist. Most people do the same thing over and over again, and thus won’t be stumped often. You sell the same things every day, work with the same computers, talk to the same people. I don’t know of many other professions that deal with situations as diverse as most physicians do on a daily basis.

I am just starting out my career, and I know there are things for me to learn. But it still shocks me how often people in the hospital talk to me with little respect because I don’t know all the parts of my job as well as they know their jobs (which they have been doing for 20 years). The surgical tech can’t believe I don’t know all the instruments, the pharmacist thinks I should know about all the drugs, the nurses don’t understand why I don’t know about some new type of bed or dressing, and the respiratory tech thinks I don’t know how to manage a patient’s ventilator. The case manager is upset that I don’t know a patient’s insurance coverage, and the social worker thinks I don’t pay attention to my patients because I don’t know where they live. In the clinic, we also need to know about billing and working with insurance companies. And then the patient with diabetes, hypertension, and lung disease doesn’t know why I need to keep trying different medications to control all these things. All this before they leave the clinic, light up a cigarette, and go eat at Taco Bell.

Ed Rempel
12 years ago

Great post, FT.

Some other types make quite a bit more, such as surgeons. I know several good doctors that moved to the U.S. where they can make double their Canadian pay.

Most docs do seem to have less money than you would think. There seems to be an expectation that they will live a high life, with an expensive home, cars, vacations, private school for kids, etc. After paying for all that, there is generally not much left over to invest.

This can be a big issue for doctors. If you live an expensive life and invest comparatively little, then how can you maintain that when you retire?

This is why studies show that doctors have very low net worth in comparison to their income compared with other professions.

I have also heard that a carpenter or plumber makes more than a doctor over their entire career, taking into account the time value of money. I have not verified this, but even if it is not actually true, it does support that it is not really worth being a doctor just for the money.

It is also difficult for most doctors to save a lot of tax with a corporation, since they need nearly all their income for their lifestyle. Corporations really only help if you can leave income in the corporation and don’t need it for your lifestyle.


12 years ago

Canada has REALLY screwed up it’s health care system. But that is a whole other blog.

Doctors, just like people in any other profession, will chase the money. So they (doctors, nurses, etc) get their first rate education here, move to the States to work, pay off their student loans and buy a house all in the first year. And in Canada….?

A greater percentage of med students are now specializing because that is where the money is. Who wants to be a GP any more? Declining number of GP’s plus an increase in aging population = health care nightmare.

Ed is right about the “Millionaire Nextdoor” being plumbers etc. The one that really made me shake my head was my barber. Not a stylist, just a plain ol’ barber-pole barber. He takes around 10 minutes to cut my hair and charges $12 and most people give him $15 (“keep the change” — smart pricing scheme, 20% of his income is “non-reportable”!). So…he can make $72/hr plus $18/hr in tips = $90/hr.

$90/hr for a life long career that is recession/depression bullet-proof; extremely little education or specialized skills; three-digit student loans; no inventory; minimal overhead; zero stress; no heavy lifting.

I bet his gross income is close to (or over) $100,000 a year.
Oh yeah, and it’s 100% cash business.

Barber vs. doctor — you decide.

(As a side-note, my barber doesn’t do shaves anymore — fear of lawsuits. Could a surgeon ever stop doing operations and still get paid to be a surgeon?)

Ed Rempel
12 years ago

Hi Scott,

Good point, Scott. A former barber I had retired at 50 and moved to Hawaii.

The “Millionaire Next Door” people we meet fall into mainly 4 categories – small business owners, frugal people, some high-income earners that invest heavily, and people that do a lot of leverage.

People tend to admire doctors more than plumbers, but a plumber that builds his business and has 5-10 plumbers working for him is making considerably more than most doctors – especially after tax. The problem they run into is getting too focused on the cash economy and hiding money, rather than investing it.

It is amazing how large a nest egg even low income people can amass by being frugal and investing heavily. There are a few like that on this blog. According to the book, the #1 vehicle driven by millionaires is the Ford F-150 pick-up truck. We have also seen a few millionaires that drive Honda Civics.

High income people like most doctors tend to be equally high spenders, and therefore often have little more left at the end of the month than anyone else.

The other problem they have is that they are usually the worst investors. The story around the investment industry is that doctors and dentists are the worst investors of all. One of the more reliable investment strategies is to ask your dentist how he invests – and then do the opposite! Many sales-focused brokers and planners target doctors and dentists, so they get marketed all the crap out there – and usually at the wrong time.

But doctors and dentists often believe they are good at everything and smarter than everyone, and therefore often don’t take advice well. They will juggle their own account, plus several advisors and always add new money into whichever one did best recently – thereby consistently buying high.

We have also seen people build significant wealth with leverage implemented properly. Part of why we are big believers in the Smith Manoeuvre is that average people that are able stick with a plan long term through ups and downs can use leverage to build a far higher portfolio over time than even most high-income earners build. The reason most Canadians struggle financially is that their portfolios are far too small. Their main asset is their home. It is not really possible to become wealthy just by maxing your RRSP’s.

Riding out markets like we are having now can be a challenge for anyone with significant leverage, though. Leverage can be the “great equalizer” as a means that average people can keep up with doctors, but it takes the right kind of discuplined, long term focused person for this to work.


12 years ago

Just a little note to Scott.

We are all entilted to our opinions.

As a physcian who has worked and taught in over a dozen countries including the United States… my opinion is that Canada has the absolute best health care in the world. Sure I could ask whether you have watched “Sicko” but that is too far over the top – but don’t think it is too far from the mark. In the words of Jack Nicholson – ‘You can’t handle the truth.’ All health care systems are great until you get sick. But also in the U.S. heaven forbid that you are rich enough to pay and come in with some nonspecific complaint but are well (i.e. most of the time people go to the doctor) – in the words of Mr. T – ‘I pity the fool!’

As to income: I would defer to one of my colleagues who came to Canada after 10 years of busy practice in a large U.S. urban setting and is ecstatic in Canada. Works less, makes more, doesn’t get sued!

As I said, just my opinion. Canada rules! (Beleive it!)

12 years ago

True enough UTL.

None of has 100% knowledge of any field/occupation, even if we are “experts”. So I only know what I know. For example, a friend who has brain cancer and neither his insurance company nor provincial health care will cover his treatments. Anyone have an extra $100,000 I can borrow? How much does a life cost these days?

I guess overall I would have to agree Canada has a semi-decent and functioning health care system. It could always be worse(?).

But focusing only on the income side of things, I’ve known four doctors (in a range of specialties) and a handful of nurses who all got schooled in Canada (UofA) then headed to the States to make their money, and make they did.

I don’t know…I don’t think there is a Silver Bullet to any health care question.

Interesting point, too, about getting sued. I read an article many years ago about the litigation rates in the States. Something like if you made $60,000+, in any industry, you had a 75% chance of being sued. An American phenomenon, lazy man’s road to riches — sue someone!

Genius Boy
12 years ago

I would also agree with Up Too Late. Having worked in the US, you practise a defensive type of medicine, to prevent litigation. You do the extra test, even though you know the yield is rather low, because if the 1 in a million thing shows up, you’re going to be sued out of practise.

With the fall in the exchange rate to parity (well, it’s now 85 cents to the dollar), away from 65 cents to the dollar, the difference in pay isn’t as great as it used to be. I make more in Canada than in the US.

But as one of my mentors used to say, “I should pay for the joy I get to give to people.” I don’t think you can say that on a frugal website, can you?

11 years ago

I have been reading a lot of these “Doctors salary” articles lately, and one thing keeps coming up. And that is the fact that doctors have to study for a decade so 150k salary is nothing. I would like to point out that graduate students who work 16+ hours a day and study for more than a decade to get their PhD and get a PostDoc don’t get even half that. They get paid 20-24k a year. Even after all that struggle if you are lucky you become a prof. adn you have work for peanuts for year and years till you become a full professor and then you may get 150k. So doctors out there complaining about long hours, very long time frame to finish your medical degree, should think again. I think some doctors are over paid.

11 years ago

to researcher,

Given your name, I assume you are in a research field, and perhaps have been a grad student yourself

My understanding is that being a graduate student in academics is perhaps one of the WORST field to enter in the financial aspects – the low pay and lack of job security until you get a tenure at a university. And even then, the pay is not high at all considering what they have put into, unless as a professor, you can start some profitable business from your research.

It appears even worse when compared to the above-mentioned fields with much lower education investment (both in money and time) – such as electrician and plumbing.

Hence kudos to those who are willing to make sacrifices in this challenging path. I hope all of you have considered the financial aspect in the decision to take on this path, and are happy accepting the consequence of your decisions.

Simple Life
11 years ago

just wow

i am so surprise. 60$/ hour for being a pharmacist?

where do the money come from? why the hell do the pharmacist charge 12$ for dispensing drug while the workers in wal-mart get 7$ an hour.

the health care field is so messed up.

11 years ago

Simple Life:
Its just supply & demand. Ever since the big chains decided they wanted to have a pharmacy department, there has been a shortage of pharmacists. In my town, there are more pharmacies than burger joints. If I had a skill I could sell for similar remuneration, I would look for that salary as well!


11 years ago

@ewon: “…kudos to those who are willing to make sacrifices in this challenging path. I hope all of you have considered the financial aspect in the decision to take on this path, and are happy accepting the consequence of your decisions.”

Yet another reason modern capitalist society is failing. People are choosing careers based upon size of pay-cheque instead of the amount of fulfillment (you know, heart and soul stuff).

It’s been well recorded that the number of GP’s is dropping simply because doctors can make more money specializing. This results is a shortage of doctors for the general populace.

How many children (and I’ve seen it first hand) go into medicine or law simply because their parents wanted them to make lots of money? What % of society works at jobs/careers because of the money instead of for the joy or personal reward? Probably not a lot. It creates a vicious cycle and a dour society at large.

Of course society values people who make their lives easier and more comfortable (union employees aside) and the pay scale reflects that. I have no problem paying a fireman $80K; I have a very big problem paying a politician $125K a year.

Then there is the rarity factor, Tiger Woods makes a LOT of money simply because he is the ONLY one who does what he does. But it’s also what he truly loves to do, so he’s got the best of both worlds.

phd guy
11 years ago

In comparison to other PhDs that require just as much time, and usually more brains, than getting a MD, physicians are TOTALLY over payed! Myself, 4 years honors BSc in physics, 2.5 years MSc in semiconductors, 4 years (with a noble prize winning supervisor) PhD in physics, 2.5 postdoc at Stanford = $110,000… I would say a 50% reduction in MD salaries. In addition medical schools should not limit the output of MDs.

11 years ago

phd guy…we dont need more physicists, we need more doctors. 50% reduction in physician pay = no new med grads. I do agree though that phd’s in many fields of study deserve higher pay for the education they put in.

11 years ago

What excellent comments. With my husband presently in his third year of med school, we’ve been sniffing around to figure out what our financial future holds.

Prior to being accepted into med school, my husband spent 15 years as an Army Officer. He had 5 years left until he was eligable for a full pension. He was accepted into med school and the military program to train MDs. So, he is being paid his salary, $87,000, while attending school. His tuition and costs are paid for by the military. Upon graduation, he will owe the military five years (which he had to serve to get his pension anyway). He will then be able to retire with 25 years service (his time in school is still counted as pensionsble service). His pension will be based on his best three years. On the day he graduates his salary will double to $160,000. From there it goes up significantly every two years.

In the end we should be retired from the mitary with a good pension coming in every month while practicing as a civilian MD. No debt, no overhead. Clearly, joining the Army isn’t for everyone, but it’s been viable in our situation.