We’re continuing this miniseries on the economics of medicine by addressing the kind of salary you should be aiming for. While we would all like to believe that we went into medicine for the purpose of helping others, we must not delude ourselves into thinking that “helping others” is cheap. Let’s take a look at the salary that is necessary to maintain a comfortable lifestyle. I’m going to run the numbers given the scenarios that (1) you are single, or at least have a spouse that works, and (2) that you’re married and serve as the sole provider. Let’s say that you purchase a house for $300,000—a reasonable amount in an urban area—and you also purchase a $30,000 car. Assuming a 6% interest rate on each of these items and a 2.5% annual addition for property taxes, PMI, and maintenance, the monthly cost for the house will be $2,423.65, while the car will run $579.98 .
Adding up other components of lifestyle such as food, cable, Internet access, phone bills, and entertainment, we then get the table below for a necessary salary for a single person. I also tacked on the monthly cost of repaying student loans and investing money toward retirement.
Here is the table for a person who is married and serves as the sole provider for the family:
Realize that these numbers are based upon the lifestyle that you choose. They do not reflect an extravagant lifestyle by any means. If you want to belong to a country club or send your children to private school, the numbers will quickly rise from there.
You can claim that you’re willing to live on a salary of $40,000 a year. That you never got into medicine for the money. That you only want to help people and will be happy living from paycheck to paycheck. You’re certainly welcome to live whatever lifestyle you choose, but bear in mind that you still need to make $70,000 a year beyond your lifestyle cost so that you can repay your student loans and save for retirement.
These numbers do not include health insurance, malpractice insurance, disability insurance, or life insurance. If your employer does not pay for these benefits, or you’re a solo practitioner or contractor, you should add the expected costs of these insurances to your total salary. All of a sudden, the necessary pre-tax salary can be well above $200,000, even if you are trying to live on $40,000 a year.
 Calculations taken from mortgage calculator.org.