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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023
| Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Certain physicians who work full-time in hospitals had much to feel encouraged about as they worked on their family's financial future in 2022. Average compensation for a hospitalist rose at a rate exceeding that of physicians generally. At least 52% of hospitalists reported a family net worth exceeding the national average. Even so, they became increasingly careful in their spending habits, as 37% of hospitalists said their families live below their means.
In this report, gender is based on how physicians self-identified in our survey.
Some totals in this presentation do not equal 100% because of rounding.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
At least 52% of hospitalists, and at least 59% of physicians overall, reported family net worth exceeding the $748,800 for an average American family (according to a Federal Reserve report).
That net worth figure includes home equity, which Joel Greenwald, MD, encourages his financial advisory clients approaching retirement to disregard as part of their wealth. Greenwald is a St. Louis Park, Minnesota, certified financial planner and wealth management advisor who works exclusively with doctors.
"Your house is not an investment; it's where you live," Greenwald says. "In my experience, people heading into retirement sell their million-dollar house and move into a $900,000 condo."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Female hospitalists more often had $500,000 or less in net worth than their male counterparts did, but after that, gender gaps were less pronounced. And compared with physicians overall, the gender gaps among hospitalists with net worth of $2 million and up were somewhat narrower.
Representation of women in medical school admissions and in physicians' jobs has made meaningful strides, believes Tyler Stafford, CEO and co-founder of Panacea Financial, a Little Rock, Arkansas, bank that caters to physicians and other healthcare professionals. "But we're still not close to parity in overall representation in the medical workforce," he says.
"The major issue that is driving income and net worth disparity is that female underrepresentation among later-career physicians who have had time to build wealth is still meaningful. I would hope and expect that this disparity would correct over time."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Fifty-four percent of Caucasian/White hospitalists reported a net worth of at least $1 million, compared with 54% of Asian American, 41% of Latinx/Hispanic, and 40% of African American/Black peers. All of those percentages trail those for physicians overall, at least somewhat.
The gap between Caucasian/White and African American/Black physicians overall was pronounced, although better than in society in general. In the United States, African American families' average wealth was less than 15% of Caucasian/White families', according to a Federal Reserve report.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
In comparison, 51% of physicians overall said they lived within, 42% below, and 7% above their means.
One factor behind doctors living below their means, Greenwald believes, is that spending habits changed during the pandemic. "A lot of doctors were furloughed and laid off, and now eat out less often," he says.
"The literature says you should save 15% of gross income toward retirement. At our shop, we say 20%, because physicians get a late start [after paying off med school debt] and are in catch-up mode."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
The top seven categories of debts and expenses selected remained unchanged from what hospitalists told us last year, and the associated percentages were similar. For several years running, about two thirds of hospitalists have reported that they are still paying off a mortgage on their primary residence.
However, comparing 2022 with 2017 (when a Medscape survey used a different definition of hospitalist), smaller percentages of hospitalists carried debt for car loans (49% in 2017), their own undergrad or medical school loans (42%), and credit cards (30%).
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Why might nearly 7 in 10 hospitalists sidestep the need to cut or restructure big debts or expenses?
Many doctors have felt less squeezed by inflation than other Americans have, Stafford suggests, thanks to their high earnings and relative job stability.
"Also, a physician's family can do a lot to curb expenses shy of the major changes shown here," he adds. "They can shop more cheaply, shift purchases to a credit card, convert to a cheaper car."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Hospitalists answered this survey question in late 2022, coming off a stretch of several months when "there was no place to hide," Greenwald says. "Both stocks and bonds did terribly. Even someone with a balanced portfolio got hit."
He cautions against thinking that a paper loss in an individual stock (as opposed to long-haul investments in 401(k) or 403(b) accounts) is not a true loss. "What you really should do is start your analysis over. People often ride bad stocks down to zero because they couldn't face selling and admitting they made a mistake."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
When hospitalists were asked this question in late 2022, the stock market was rockier. Only about 1 in 5 of them expected their investment portfolio to grow over the succeeding 12 months.
But if the gains in the S&P 500 seen during the first half of 2023 continue, they may eventually belie some of those predictions.
"Doctors in general are time-strapped and may get a lot of their perspective from headlines about inflation, the housing market, and so on, which can lead to a bearish view toward their portfolio," Stafford says.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Greater participation rates in a particular investment category over time should bump up the frequencies of both good and bad fortune. More physicians gravitate to the stock market than to real estate when they want to invest, Greenwald says.
"Owning real estate is more work; you own a duplex across town that you have to keep rented and replace the boiler when it fails. Real estate is in the blood for some docs, but others are too busy and prefer stocks."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Forty percent of hospitalists said they cut their investment pace in such accounts in the prior year, compared with 36% of physicians generally. Meanwhile, 10% of all physicians said they did not regularly put money into 401(k)s or other tax-deferred accounts.
"It's disappointing to see" when hospitalists and other physicians reduce their retirement or college investing activity, Stafford says. But he's encouraged that more than 9 in 10 hospitalists are regularly steering money into retirement or tax-deferred college savings accounts.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
The pace of hospitalists' savings in taxable accounts like Roth IRAs or "backdoor" Roth IRAs was nearly identical to the percentages for physicians overall.
Greenwald says hospitalists would be well served "to, first, put money into your 401(k) or 403(b) at work, up to the matching level.
"Then, put money into a Roth or backdoor Roth up to the contribution maximum, as long as you aren't stopped by the federal income maximum. Then, go back into your retirement account at work and max it out."
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
The average current mortgage debt held by a full-time hospitalist was $246,000 last year.
Meanwhile, the average size of a mortgage in this country was recently about $431,000, according to the Mortgage Bankers Association. Somewhere between 18% and 26% of doctors told us that their families shoulder more home loan debt than that.
As a rule of thumb, banks say, you should spend 28% or less of your family monthly gross income on your mortgage payment.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Doctors do seem to like big houses for their families. The average size of a new single-family house built for sale in the United States was 2522 square feet in 2022, according to data service Statista. At least 43% of primary care hospitalists and 47% of specialists working in hospitals choose to live in bigger houses than that.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Hospitalists carried three or more credit cards about as often as physicians generally did (78% vs 77%).
Credit bureau Equifax warns that having more than two to three credit cards open at a time can become unmanageable. Many physicians clearly don't feel the same. But then, neither does the average American, who credit bureau Experian says carries about four cards.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
About 2 of 3 hospitalists, and of physicians generally, told us they disagree with their spouse or significant other about spending habits, at least occasionally.
That level of squabbling puts doctors in the American mainstream. An AICPA study found that 7 in 10 married or cohabitating Americans disagreed with their partner over finances in the preceding year. Nearly half of couples experiencing financial tensions said it negatively affected intimacy.
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
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Medscape Hospitalist Wealth & Debt Report 2023: Do You Feel Rich Enough?
Jon McKenna | September 5, 2023 | Contributor Information
Physicians report their successes and failures in building wealth, controlling spending, managing debt and expenses, investing smartly, and maintaining a comfortable lifestyle.Medscape Features Slideshows, Jun 2023
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Jon McKenna
Senior Editor, Reports
Medscape Business of Medicine
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