The Doctor vs. The Plumber

How do you become a plumber? Plumbers start out as apprentices and make around $12-15/hr in Tucson They work under a licensed plumber for a few years Eventually you can take your journeyman plumber test Then you can eventually, through tests and work experience you can obtain the certification of Master Plumber

What does it pay to be a plumber? Averages Apprentices make $30,000 Journeymen make $60,000 Master plumbers make $100,000 All pay is based on working as an employee of a company

How do you become a doctor? 4 years of undergraduate study 4 years of medical school 3 years minimum of residency, depending on specialty

Costs to become a doctor 4 years of undergrad average cost is about $20,000 per year 4 years of med school average cost is about $50,000 per year Median debt for finishing medical school will be roughly $200,000 for people graduating high school in 2019

Assumptions Doctor Spends $20,000 a year on undergrad and $50,000 a year on med school The doctor doesn’t work during schooling Plumbers pay steadily increases as they accrue more experience Both put 50% of their pay to either investments or debt Doctor’s debt has a 4% interest rate Investment return assumption is 6%

Step 1 - School Age Doctor’s Income Plumber’s Income Doctor’s Net Worth Plumber’s Net Worth 18 $0 $31,680 -$20,000 $15,840 19 $36,960 -$40,600 $35,270 20 $42,240 -$61,818 $58,507 21 $47,520 -$83,673 $85,777 22 $58,080 -$137,019 $119,964 23 $60,720 -$192,500 $157,521 24 $63,360 -$250,200 $198,653 25 $66,000 -$310,208 $243,572

Step 2 – Residency and Fellowship Age Doctor’s Income Plumber’s Income Doctor’s Net Worth Plumber’s Net Worth 26 $55,000 $100,800 -$295,117 $308,586 27 $57,500 $103,824 -$278,171 $379,013 28 $60,000 $106,939 -$259,298 $455,224 29 $62,500 $110,147 -$238,420 $537,610 30 $75,000 $113,451 -$210,457 $626,593 31 $77,500 $116,855 -$180,125 $722,616 32 $80,000 $120,630 -$147,330 $826,153

Step 3 – Training is finished Age Doctor’s Income Plumber’s Income Doctor’s Net Worth Plumber’s Net Worth 33 $380,000 $123,971 $36,777 $937,708 34 $391,400 $127,690 $233,948 $1,057,815 35 $403,142 $131,521 $449,556 $1,187,045 36 $415,236 $135,467 $684,147 $1,326,001 37 $427,693 $139,531 $939,043 $1,475,326 38 $440,524 $143,717 $1,215,647 $1,635,704 39 $453,740 $148,028 $1,515,456 $1,807,861 40 $467,352 $152,469 $1,840,059 $1,992,567

Step 4 – Doctor Pulls Ahead Age Doctor’s Income Plumber’s Income Doctor’s Net Worth Plumber’s Net Worth 41 $481,373 $157,043 $2,191,149 $2,190,642 42 $495,814 $161,754 $2,570,525 $2,402,958 43 $510,688 $166,607 $2,980,101 $2,630,439 44 $526,009 $171,605 $3,421,911 $2,874,068 45 $541,789 $176,753 $3,898,121 $3,134,889 46 $558,043 $182,056 $4,411,029 $3,414,010

What is left out of this scenario? 50% savings is very high, family, kids, marriage, mortgage, car payments, etc. all make that number very hard to obtain Lifestyle expenses are not included, doctors will almost always be required to spend more on certain things (car, clothes, etc.) Tax burden is higher for the doctor than the plumber

Things to make the Doctor ‘win’ The doctor in the scenario is in a higher paying specialty The strategy to pay back the student loans is aggressive The plumber never started his own company

Plumber starts his business With the knowledge and expertise gained as a master plumber, the plumber starts a business As a sole proprietorship, they can make upwards of around $250,000 with a plumbing business As they increase the size of their company and hire workers, each new driver can earn them as much as $100,000 per year If the plumber starts their business at age 30 and adds one new driver every 5 years, the doctor will never catch the plumber in net worth