Few people will be surprised to learn that the average annual salary for a physician is $313,000. We envy them and believe that they must have it all. After all, they drive luxury cars, live in upscale neighborhoods, and never seem to have any financial problems. With money like this and the lifestyle to show for it, why, then, are so many actually no wealthier than the rest of us? What can the men and women who work in our hospitals and medical clinics do to be truly wealthy instead of merely rich?
First, it’s important to remember that the average medical school loan debt is $215,000, and that doesn’t include any undergraduate debt the doctor may have already had. So, when a doctor puts on their first white coat and begins practicing medicine, they are already burdened with a loan that will take years to pay off.
Second, just like the rest of us, many physicians are unaware of the difference between being rich and being wealthy. “Rich” includes being able to take expensive vacations and live an upper-class lifestyle even though at the end of the day, the physician may have no money in their bank account. They spend their income down to the last dollar instead of saving it. “Wealthy,” on the other hand, means being able to live on a small portion of your income while investing a significant percentage of it each month so that retirement will, indeed, be possible. It also stems from creating multiple income streams for yourself so that if one dries up or there is an economic downturn, you can pivot to the others and still be just fine.
Dr. Saji Salam is one physician who has transformed his own financial life through pursuing long-term wealth and avoiding the temptation to be rich. “I was like many of my peers, who worked hard in medical school to earn their degrees. My investments like that of many other physicians were in my 401K account and stocks. But when the 2008 market crash wiped out my stock portfolio and my 401K, I decided that I need to protect my retirement from a future market crash.I could see that diversifying my income would be a really wise idea if I wanted to save for retirement”.
Dr. Salam says there are many passive income opportunities out there that physicians can look into. “I decided to invest in apartments,” he explains. “I had a strong background in management consulting, so I decided to use my skills to build this side income for myself, so to speak. Larger transactions soon followed, and everything took off from there.”
Since 2017, Dr. Salam has been a full-time real estate investor. “I invest here in the United States as well as overseas in single family, and multifamily assets. It has opened up income for me that provides a good financial cushion for me and for my family.”
Dr. Salam recommends that all physicians understand their passive income opportunities. “COVID and the resulting recession were brutal for my peers,” he says. “Physicians lost a lot of income because their patients were afraid to come into the clinics. There will be another economic downturn - that’s inevitable. However, we can all be better prepared for it if we are able to have multiple sources of income instead of just one. That’s one of the best ways for anyone, including physicians, to build their wealth and to have true financial security, the kind that brings peace of mind and long-term prosperity.”
Dr. Saji Salam is a physician and management executive in Houston, Texas. With more than 20 years of experience as a management consultant for 5 major consulting firms, including Deloitte Accenture, Dr. Salam founded CareVentures to help medical professionals invest in real estate. Today, he has ownership interest in over 1,800 properties and has $70 million in assets under management as an owner/operator. For more information about CareVentures, please see www.careventurescapital.com