Net Worth Growth by Warren Buffet
Young Physicians often have a negative net worth heading into their first private practice role but it's not necessarily as bad as you think.
The average physician leaving residency has an average debt of over $250,000. With the average payoff taking 13 years, when do physicians actually become “rich”? Let’s make sure we cover that this is a different number for everyone and that Warren Buffet one of the richest people in the World is not a fair comparison. With that being said, these numbers may surprise you.
Warren Buffet’s Net Worth as of 2021 is over $100 BILLION. He is a 90-year-old American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway.
Now let’s see how he got there:
$20,000 at age 20
$1 Million at age 30
$25 Million at age 40
$350 Million at age 50
$3.8 Billion at age 60
$36 Billion at age 70
$55 Billion at age 80
$100 Billion at age 90
What you may not notice at first glance is that 99% of Warren Buffet’s wealth was earned AFTER his 50th Birthday. This same concept applies to young doctors. Their net worth may start out negative and take a few years to turn positive but the principle of compounding is alive and well!
Now the average graduating resident is around 30 years old and we have not come across too many that are millionaires but we do have some advice.
Dr. Dahle from the White Coat Investor has coined the term “Live Like a Resident”.
Implying that you should continue to keep your costs low even in your first few years as a practicing physician to be able to aggressively pay down debt and create a strong financial foundation.
This is excellent advice and the only thing we could think of to add to this is to figure how to reward yourself. After all, having the strongest financial plan is never the goal. The reason to have a financial plan in place is so that you don’t have to worry about money (now and when you’re retired).
What are three things you can do today to get started? Here’s the cheat sheet:
Review and Protect Your Income
Track Your Spending
Decide how much you need in the bank
Once you do this, you have laid the guardrails for a financial plan that you can keep on track by simply living within your means.