Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

The financial disadvantages of being a doctor in California

Smart Money, MD
Finance
May 20, 2019
53 Shares
Share
Tweet
Share

Geographical arbitrage is a huge component to being able to build wealth in a timely manner.  For doctors, the formula for rapid wealth accumulation calls for geographical arbitrage even more strongly as our salaries do not have wide ranges across the country.  A doctor in Texas will probably command a similar salary in Arizona (maybe slightly less).  A doctor in the midwest might earn more, spend less, and work less than her equivalent in California.  By this token, who would want ever want to live in the Sunshine state?

There was a recent post on the White Coat Investor enumerating all of the financial disadvantages of being a doctor in California.  Sadly for those in California, those reasons are backed by fact — on average, you’re going to probably going to work pretty hard as a physician in California, spend $1 million on a starter home, and commute a few hours a week. By the way, gas is around $4 a gallon.

The fuel to the fire

Those of us living in California are probably aware of many other factors that make living in the area financially tough. Some of them that come to mind include:

  • Private practice physicians can’t establish as an LLC. This basically means that you have to pay a little more and deal with more logistics to get a corporation established.
  • Payor mix is skewed. There are practices that thrive on taking care of MediCal patients.  Actually, in-office visits pay horribly but if you patient needs surgery you can actually get decent reimbursement.
  • High concentration of doctors.  California has over 50,000 physicians. Many of these doctors are clumped in the larger cities so competition is tough. Many plastic surgeons in California operate on Fridays and Saturdays to capture the appropriate demographic. Think longer hours.
  • Potentially malignant physician employers.  Those doctors who have potential to join private practices will face employers who will burn and churn you. Full-time jobs at part-time salaries. You name it, and it exists.
  • Inter-office commuting.  One of my friends covers 4 offices for his practice and operates at 3 different hospitals.  By the way, he can’t expense it, because he is a W-2 employee.

California is not all bad

There are almost 40 million people living in California.  It’s got to be not all bad.  Many of the reasons that people use to justify living this fair state are emotionally charged, but there is still good reason that they are valid. Let’s take a look at some of them:

  • Ethnic diversity.  There is more benefit than face value of having diversity.  Part of this argument sounds snobby, but this is how some doctors justify working six days a week trying to pay off a $1.4 million home that they don’t really even like.  This is more than moving to Detroit to take a highly competitive Hospitalist job because it has a sizable Middle Eastern population and good Halal options.  Most doctors I know have eaten tasty dim sum rolled around a cart, but probably have no idea that the real stuff can only be found in more diverse cities like Los Angeles, New York, or San Francisco.  Does this matter to everyone? For some people, it clearly matters a lot.
  • Proximity to family.  We all know that this is important, but sometimes it’s non-negotiable.
  • Values and attitude.  We all know that type of laid-back attitude, culture, and general vibe in California. Sometimes all that you need to know that the world is going to be OK is that jogging path down by the pier, the Iranian supermarket where you can get six tangerines for $1, or the sunny weather when you go hiking.  Likewise, those die-hard New Yorkers wouldn’t trade their lifestyle for anything else.

Getting hit financially

The average physician in California will likely take longer to build up her bank account.  Some two physician households in California will only generate an earning power comparable to a single physician family in the Midwest.  The biggest question is whether that is going to be OK  with you.  If you want to be financially independent by age 40, it might be tough.  Most doctors, however, will still be able to manage a respectable living with judicious financial choices: If doctors can’t afford to live in California, then who can?  Let’s stop the hate on the Californian doctor!

“Smart Money, MD” is an ophthalmologist who blogs at the self-titled site, Smart Money MD.

Image credit: Shutterstock.com

Prev

3 things about psychiatry that don't focus on pathology

May 20, 2019 Kevin 1
…
Next

Celebrities are bringing a myriad of health conditions into the public consciousness

May 21, 2019 Kevin 2
…

Tagged as: Practice Management

Post navigation

< Previous Post
3 things about psychiatry that don't focus on pathology
Next Post >
Celebrities are bringing a myriad of health conditions into the public consciousness

More by Smart Money, MD

  • Is passive income a lie?

    Smart Money, MD
  • What to do financially when you’re a doctor getting a divorce

    Smart Money, MD
  • Doctors in tech cities are losing the rat race

    Smart Money, MD

Related Posts

  • Osler and the doctor-patient relationship

    Leonard Wang
  • Your plumber offers a money-back guarantee. Should your doctor?

    Michelle Andrews
  • Finding a new doctor is like dating

    R. Lynn Barnett
  • Doctor, how are you, really?

    Deborah Courtney
  • The financial barriers of applying to medical school

    Shin Mei Chan and Jamieson O’Marr
  • Be a human first and a doctor second

    Sarah Murad

More in Finance

  • From pennies to attending salaries: Why physicians should teach their kids financial literacy

    Michele Cho-Dorado, MD
  • Retirement planning: Understanding sequence of returns risk

    Jordan Bilodeau, CFP
  • The short-term rental tax loophole: a game-changer for physicians

    Jeff Anzalone, DDS
  • Why every doctor should have a side gig

    Anonymous
  • Maximize your practice’s revenue: Follow these 5 billing metrics

    Aaron Morgenstein, MD & Heather Signorelli, MD
  • Character, not cash: the ingredients of a happy and meaningful life

    Miguel Villagra, MD
  • Most Popular

  • Past Week

    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • Healing the damaged nurse-physician dynamic

      Angel J. Mena, MD and Ali Morin, MSN, RN | Policy
    • The struggle to fill emergency medicine residency spots: Exploring the factors behind the unfilled match

      Katrina Gipson, MD, MPH | Physician
    • What is driving physicians to the edge of despair?

      Edward T. Creagan, MD | Physician
    • Deaths of despair: an urgent call for a collective response to the crisis in U.S. life expectancy

      Mohammed Umer Waris, MD | Policy
    • Beyond the disease: the power of empathy in health care

      Nana Dadzie Ghansah, MD | Physician
  • Past 6 Months

    • The hidden dangers of the Nebraska Heartbeat Act

      Meghan Sheehan, MD | Policy
    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • The vital importance of climate change education in medical schools

      Helen Kim, MD | Policy
    • The fight for reproductive health: Why medication abortion matters

      Catherine Hennessey, MD | Physician
    • Nobody wants this job. Should physicians stick around?

      Katie Klingberg, MD | Physician
    • Resetting the doctor-patient relationship: Navigating the challenges of modern primary care

      Jeffrey H. Millstein, MD | Physician
  • Recent Posts

    • The endless waves of chronic illness

      Michele Luckenbaugh | Conditions
    • Skydiving and surgery: How one doctor translates high-stress training to saving lives

      Alexandra Kharazi, MD | Physician
    • Telemedicine in the opioid crisis: a game-changer threatened by DEA regulations

      Julie Craig, MD | Meds
    • How this doctor found her passion in ballroom dancing [PODCAST]

      The Podcast by KevinMD | Podcast
    • Surviving and thriving after life’s most difficult moments

      Rebecca Fogg, MBA | Conditions
    • Don’t be caught off guard: Read your malpractice policy today

      Aaron Morgenstein, MD & Laura Fortner, MD | Physician

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 5 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

CME Spotlights

From MedPage Today

Latest News

  • Make the Diagnosis: This Bump on His Nose is a Tricky Diagnosis
  • CRT Regimen Boosts Complete Response Rate in Unresectable Vulvar Cancer
  • Fla. Doc Charged With Murder; McConnell Exits Rehab Facility; BPA on Store Receipts
  • FDA Faults Next-Gen Olympus Duodenoscopes
  • CDK4/6 Inhibition Active in Recurrent Low-Grade Serous Ovarian Cancer

Meeting Coverage

  • CRT Regimen Boosts Complete Response Rate in Unresectable Vulvar Cancer
  • CDK4/6 Inhibition Active in Recurrent Low-Grade Serous Ovarian Cancer
  • Switch to IL-23 Blocker Yields Deep Responses in Recalcitrant Plaque Psoriasis
  • Biomarkers of Response With Enfortumab Vedotin in Advanced Urothelial Cancer
  • At-Home Topical Therapy for Molluscum Contagiosum Gets High Marks
  • Most Popular

  • Past Week

    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • Healing the damaged nurse-physician dynamic

      Angel J. Mena, MD and Ali Morin, MSN, RN | Policy
    • The struggle to fill emergency medicine residency spots: Exploring the factors behind the unfilled match

      Katrina Gipson, MD, MPH | Physician
    • What is driving physicians to the edge of despair?

      Edward T. Creagan, MD | Physician
    • Deaths of despair: an urgent call for a collective response to the crisis in U.S. life expectancy

      Mohammed Umer Waris, MD | Policy
    • Beyond the disease: the power of empathy in health care

      Nana Dadzie Ghansah, MD | Physician
  • Past 6 Months

    • The hidden dangers of the Nebraska Heartbeat Act

      Meghan Sheehan, MD | Policy
    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • The vital importance of climate change education in medical schools

      Helen Kim, MD | Policy
    • The fight for reproductive health: Why medication abortion matters

      Catherine Hennessey, MD | Physician
    • Nobody wants this job. Should physicians stick around?

      Katie Klingberg, MD | Physician
    • Resetting the doctor-patient relationship: Navigating the challenges of modern primary care

      Jeffrey H. Millstein, MD | Physician
  • Recent Posts

    • The endless waves of chronic illness

      Michele Luckenbaugh | Conditions
    • Skydiving and surgery: How one doctor translates high-stress training to saving lives

      Alexandra Kharazi, MD | Physician
    • Telemedicine in the opioid crisis: a game-changer threatened by DEA regulations

      Julie Craig, MD | Meds
    • How this doctor found her passion in ballroom dancing [PODCAST]

      The Podcast by KevinMD | Podcast
    • Surviving and thriving after life’s most difficult moments

      Rebecca Fogg, MBA | Conditions
    • Don’t be caught off guard: Read your malpractice policy today

      Aaron Morgenstein, MD & Laura Fortner, MD | Physician

MedPage Today Professional

An Everyday Health Property Medpage Today iMedicalApps
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

The financial disadvantages of being a doctor in California
5 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...