Here’s the surprising difference between two career paths which end up oddly similar in wealth, despite two widely different routes - a doctor and a plumber. Enjoy! Snapchat / Instagram: GPStephan
You have two people starting out at 18 years old. One decides to be a plumber, one decides to be a doctor. Who will have a higher net worth, all things considered?
Now to do this, for congruency, I’m considering that both professions end up saving 50% of their paycheck and invest it at an 8% return. I’m also considering that each salary increases over time with experience and inflation.
Let’s consider the plumber first. The plumber starts working at 18 years old at $12 per hour as an apprentice. Because the plumber never went to college, the plumber has zero student debt and can get right to making money and investing. We can also assume a 50 hour work week, meaning at the beginning, the plumber is likely pulling in about $2400 per month before taxes, $2000 per month after taxes, and can invest $1000 per month.
After 4 years, we’ll assume the plumber is now making $5,000 per month before taxes, $4000 after taxes, and can invest $2000 per month. After 10 years, we’ll assume the plumber is making $100,000 per year before taxes as an experienced full time plumber, $70,000 after taxes, and can save $3000 per month
At the age of 22, our plumber should be worth nearly $60,000 - investing $12,000 per year for 4 years.
At the age of 28, our plumber should be worth nearly $290,000 - this is the base $60,000 + $2000 per month, 8% interest, over an additional 6 more years.
At the age of 50, our plumber should be worth almost $3,800,000 - his base amount of $290,000 + $3000 per month invested over 22 years at the same 8% return.
So our 18-year old plumber became a 50-year-old with $3,800,000 net worth.
Let’s compare this to our doctor. The big thing here is that the doctor starts investing and earning later much later in life.
We’re going to assume 4 years of undergraduate education at $20,000 per year and that any income goes towards paying down debts before investing. After 4 years of undergraduate college, our doctor will be negative -$80,000 in education costs. After those 4 years, the doctor will be up against 4 additional years of medical school - let’s assume this is $50,000 per year. At the end of undergraduate and medical school, our doctor will be about $280,000 in debt - without earning or investing a single dime. I’m leaving out cost of living and interest just out of simplicity.
After 8 years of school, the doctor will then do 3-5 years of residency - so let’s assume 4 years, at a $60,000 per year salary. Remember, half of this goes to pay down debt. The doctor is now 30 years old. From 4 years of a $60,000 salary, $50,000 after taxes, the doctor has paid off $100,000 of the student loan, bringing the total debt down to -$180,000.
But after residency, the doctor begins to make significantly more…at the age of 31. Remember our plumber is making $100,000 before taxes….but our doctor starts out making $320,000 before taxes. After taxes, this should be about $250,000 - half of that pays off a student down. The doctor will have paid off the student loans by the age of 32 with $75,000 in investments and net worth. By the age of 40, assuming the doctor is still making $320,000 per year and investing half, the doctor will have a net worth of $1,575,000.
Now lets say the doctor gets a pay raise to $450,000 per year at the age of 40, or $350,000 after taxes - and again invests half of that. By the age of 50 years old, the doctor is worth over $6.1 million dollars, or $2.3 million dollars more than the plumber.
The break even point where the doctor and plumber have the same net worth, in this above calculation, is about 42 years old. That means when both our plumber and doctor are 42, they will be work exactly the same, even though they took dramatically different paths.
The purpose of this is to illustrate that the prestige of a career has less of an impact on how much you’re worth and it’s more about saving and investing early on that are going to make the biggest differences. It doesn’t matter what you do, you still have the potential to become wealthy and financially independent later on in life.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
You have two people starting out at 18 years old. One decides to be a plumber, one decides to be a doctor. Who will have a higher net worth, all things considered?
Now to do this, for congruency, I’m considering that both professions end up saving 50% of their paycheck and invest it at an 8% return. I’m also considering that each salary increases over time with experience and inflation.
Let’s consider the plumber first. The plumber starts working at 18 years old at $12 per hour as an apprentice. Because the plumber never went to college, the plumber has zero student debt and can get right to making money and investing. We can also assume a 50 hour work week, meaning at the beginning, the plumber is likely pulling in about $2400 per month before taxes, $2000 per month after taxes, and can invest $1000 per month.
After 4 years, we’ll assume the plumber is now making $5,000 per month before taxes, $4000 after taxes, and can invest $2000 per month. After 10 years, we’ll assume the plumber is making $100,000 per year before taxes as an experienced full time plumber, $70,000 after taxes, and can save $3000 per month
At the age of 22, our plumber should be worth nearly $60,000 - investing $12,000 per year for 4 years.
At the age of 28, our plumber should be worth nearly $290,000 - this is the base $60,000 + $2000 per month, 8% interest, over an additional 6 more years.
At the age of 50, our plumber should be worth almost $3,800,000 - his base amount of $290,000 + $3000 per month invested over 22 years at the same 8% return.
So our 18-year old plumber became a 50-year-old with $3,800,000 net worth.
Let’s compare this to our doctor. The big thing here is that the doctor starts investing and earning later much later in life.
We’re going to assume 4 years of undergraduate education at $20,000 per year and that any income goes towards paying down debts before investing. After 4 years of undergraduate college, our doctor will be negative -$80,000 in education costs. After those 4 years, the doctor will be up against 4 additional years of medical school - let’s assume this is $50,000 per year. At the end of undergraduate and medical school, our doctor will be about $280,000 in debt - without earning or investing a single dime. I’m leaving out cost of living and interest just out of simplicity.
After 8 years of school, the doctor will then do 3-5 years of residency - so let’s assume 4 years, at a $60,000 per year salary. Remember, half of this goes to pay down debt. The doctor is now 30 years old. From 4 years of a $60,000 salary, $50,000 after taxes, the doctor has paid off $100,000 of the student loan, bringing the total debt down to -$180,000.
But after residency, the doctor begins to make significantly more…at the age of 31. Remember our plumber is making $100,000 before taxes….but our doctor starts out making $320,000 before taxes. After taxes, this should be about $250,000 - half of that pays off a student down. The doctor will have paid off the student loans by the age of 32 with $75,000 in investments and net worth. By the age of 40, assuming the doctor is still making $320,000 per year and investing half, the doctor will have a net worth of $1,575,000.
Now lets say the doctor gets a pay raise to $450,000 per year at the age of 40, or $350,000 after taxes - and again invests half of that. By the age of 50 years old, the doctor is worth over $6.1 million dollars, or $2.3 million dollars more than the plumber.
The break even point where the doctor and plumber have the same net worth, in this above calculation, is about 42 years old. That means when both our plumber and doctor are 42, they will be work exactly the same, even though they took dramatically different paths.
The purpose of this is to illustrate that the prestige of a career has less of an impact on how much you’re worth and it’s more about saving and investing early on that are going to make the biggest differences. It doesn’t matter what you do, you still have the potential to become wealthy and financially independent later on in life.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
but your plumber wages way off (if their working for a decent company/ in the union) here in NY we do mostly P-wage projects making $72.50HR over time is after 8hrs not 40. 18yr olds working well over 2000hr year but to average out at 2000hr its $144,000yr Have fun in school doc
Really flawed, purely theoretical and sadly misleading.
If you save 50 percent on a 70,000 salary. You are on a rice and beans, no vacation life style. Yes, anyone can be rich that way. You could argue that one could choose to live out of a car, invest the money saved m for 15 years to become millionaire.Normal savings even for a disciplined person is about 20%. Dave Ramsey suggests 15%. Difference is that the doctor is having better life style even while saving for retirement compared to someone with lesser salary. I agree that doctors have debt and they start earning late in life.. but this video isn’t a fair representation.
FIFTY percent?!?
Doctors make way less than 320k on average, its even worse
Very misleading video.
The Justin Waller short got me to watch this, fake news…
I would say the majority of the people in the medical field are there for the money not because they want to help people. Just look at the pandemic
I am an apprentice plumber I make over $30/hr, full benefits, a company vehicle, and bonus. I am in the state of Colorado
As a gastroenterologist AKA human plumber I can confirm that a community gastroenterologist will do exponentially better even if the person went to the most expensive medical school.
The presumed doctors income of 250 K post tax in this video is off by a margin larger than 250K. Let that sink in. You won’t find accurate reported incomes online for good reasons. To be fair he did mention variations in doctors income however.
Well I’m a plumber and it goes to showe making poop go down is not as bad 😅as
Can PLEASE do a dentist and a plumber
Doctors get paid nothing,
Just do it to make daddy proud
You should do a more realistic study. What apprentice plumber makes $2000 a month? And how does a "normal" person save half of his wage? Unless he is living with his parents (for free) or sleeping in his car, I don't see it happening.
far from reality in our reality both doctor and his male husband come from wealthy if not powerful families and take education from parents with family mansion vs plumber of working class is likely to be an alcoholic and will have a house wife with children who all come with working class traits housing on rent or mortgage as for mythical freemason plumber they dont exist lodges only want rich and powerful men
Grahams voice is much deeper back here 😂
Investing 50 percent at 12 an hour. How do you take anything you say as serious
This is so flawed, no way a plumer making 24k a year is gonna invest 12k, he’s barely going to survive and if he does he’d be living miserably.
You need to account t for expenses like food, housing, health care, there is no way someone is making 2000 a month living on their own and investing half… what about unexpected expenses or buying a house or marriage? What if the doctor has a grant or scholarship? I think odds are, the doctor will be doing better than the average plumber
Cost of living is not right. 24K is barely enough to live on, too little in many places. No way he could save 15%, let alone 50%
Please be realistic with what lower classes can afford to live on
Honestly 50% is way too much
15% or the basic Amount for Dave Ramsey retirment would feel more accurate
No plumber is saving half their pay per month……..this is just made up bullshit.
I think the break even point is even higher, because most doctors don't make 350K per year. Most common is the PCP physician and they make 200 to 250K in big cities. Average graduating age of medical school is also 28, so they is about a 2 year gap between undergrad and medical school. Being a doctor is literally getting yourself exploited to work more hours per day to catch up.
I think 20,000/year for undergrad is a bit on the low side..
Save half your income….and live in your car lol
what if at the age of 30 the doctor just doesnt pay his 180k messes up his credit but buys real estate investments in cash?
So u get half the money at 50 but you have to learn not even half AND you will not be as stressed as a doctor…sounds fair and better to me 😉
iced coffee hour sent me back over here
College is a scam