7 Steps to Becoming a Rich Physician (Even With Loads of Student Debt)

As a physician, society assumes your’e wealthy and living the dream. But the reality is way more complicated. Student debt, corporate and big hospital control of medicine, and declining insurance reimbursements have made financial success as a physician more challenging than ever before.

In this article, we’ll explore how to become rich as a doctor and outline concrete steps you can take to secure your financial future — no matter how much student debt you have.

Are physicians rich?

The median pay for physicians is $239,200, according to the Bureau of Labor Statistics (BLS). Where a physician works makes a big difference in how much they earn. 

Rural physicians in high-paying specialties typically earn significantly more, while those in urban areas tend to earn less. There are some scenarios where a doctor is so specialized that they have no choice but to work in a big city where there’s enough demand for their expertise. 

But generally, pay is higher for physicians working in less desirable locations or at less prestigious institutions.

Here are the mean physician wages in the top five states according to Indeed:

1. Iowa: $318,598
2. Alabama: $311,920
3. Vermont: $304,794
4. New Jersey: $296,682
5. Texas: $290,494

Private practice physicians tend to out-earn their counterparts at academic or non-profit hospitals. This gap is particularly pronounced in surgical subspecialties.

The good news is that building wealth as a physician is possible regardless of your specialty or employer. It just happens to be easier if you put yourself in an area with limited physician supply (i.e., a place that folks aren’t as crazy about living in) or in production-based environments (such as private practice).

That said, physician compensation across all settings is substantial enough to build wealth quickly, especially with our seven tips below.

How to become rich as a doctor

Through consulting with hundreds of physicians and developing their student loan strategies, we've identified key factors that influence a physician's wealth-building potential. No matter how big your student debt is, follow these steps to become a wealthy physician in less than 20 years.

Step 1: Track your cash flow

Use a tool like Monarch Money or YNAB to monitor your spending over time. Tracking your cash flow patterns is critical because as an attending, it’s surprisingly easy to accumulate significant expenses on lifestyle purchases — before you know it, you're facing monthly credit card bills of $15,000.

While this might sound absurd to a resident physician, I’ve seen this scenario unfold hundreds of times during consults over the years.

Tracking your spending naturally leads you to spend less without feeling deprived. Lower spending translates directly into increased investment potential and a shorter path to financial independence.

Step 2: Know your bargaining power

Most physicians I’ve encountered shy away from negotiation, and many even feel guilty about it. You chose medicine as a calling, so why push for more money, admin time, or vacation? Shouldn't you just be grateful for the job?

These self-limiting beliefs plague many physicians, and I’ve seen them manifest disproportionately in female physicians. 

Know this: You deserve to negotiate for what matters to you in every position you take.

Your negotiating leverage naturally varies with location and demand. In areas with an abundant supply of qualified physicians, you’ll have less bargaining power. If you’re in a region with physician shortages, you’ll have a lot more negotiating power. Sometimes, it's way more than you realize.

That said, even in highly competitive and desirable academic jobs, while salary might be fixed, you can still negotiate for other valuable benefits.

For example, suppose you want to be 0.9 FTE, or maybe you want a full day of research/admin time, not just half a day.

Here are two crucial points:

• Always ask for what you want.
• Get all promises in writing (essential, as employers often may “forget” verbal agreements).

The worst-case outcome is that your prospective or current employer says no to a request. Best case? Getting exactly what you asked for.

Step 3: Don’t overvalue PSLF

Unless you’re a couple of years away from achieving Public Service Loan Forgiveness (PSLF) or less, it shouldn’t dictate your career decisions.

Let’s break this down with an example: You’ve just finished your OBGYN residency, with four years of PSLF payments made and six years remaining. Your projected PSLF payments over those six years total $70,000 while paying off your loans directly over six years would cost $250,000 in principal and interest.

If you take the difference between the two numbers, you get $180,000. Spread across six years of service, this equals a PSLF benefit of $30,000 per year after tax.

Now, let’s consider the tax implications: With a 32% federal rate, 5% state tax, and 10% student loan IDR payment “tax rate,” you’re looking at nearly 50% overall. This means that $30,000 after taxes each year is worth maybe $50,000 to $60,000 in gross annual salary.

Could a private practice OBGYN earn more than $50,000 to $60,000 over what she’d earn in an academic job? Absolutely.

Should this salary difference alone drive you to private practice? Absolutely not.

The point is that PSLF simply reduces the financial sacrifice of choosing academic medicine — it doesn't typically make it more lucrative than private practice. (The exception: if you're months away from PSLF qualification, stay in your non-profit position until forgiveness is secured before making any moves.)

Step 4: Maximize your employee benefits

Most physicians have access to multiple retirement vehicles, including 401(k) or 403(b) plans, 457 plans, health savings accounts (HSAs), and sometimes even 401(a) plans.

Let me share a real example: My wife works at an academic state hospital system. Her benefits package includes a 403(b), 457, 401(a) and a flexible spending account (FSA).

Instead of a traditional pension, her employer contributes to her 401(a). They also make 403(b) contributions, and she can contribute $23,000 each to both her 457 and 403(b).

This adds up to roughly $60,000 in pretax retirement contributions annually. That kind of savings adds up in a hurry.

Hopefully, you have access to amazing retirement benefits as a physician. And know that private practice physicians could potentially save even more through defined benefit plans. The key is maximizing every available opportunity. Luckily, physicians have far more options than most other professionals.

Step 5: Decide if you want to take a higher-paying job or stick where you’re at

One of the most effective ways to make more money as a physician is to periodically explore other jobs and remain open to relocation. 

One physician I know applied for a position elsewhere and got an offer. She took that offer to her department and asked for a retention package. Their response? A substantial pay increase and improved working conditions. Now, she gets to enjoy more time off while making more money — all because she explored her market value rather than waiting for her employer to recognize her worth.

Physicians pursuing PSLF might also consider taking a higher-paying private sector job after securing loan forgiveness.

Step 6: Use primarily boring investments and manage investing temptation

Physicians face constant solicitation for exotic investment opportunities, from cryptocurrency and real estate syndications to medical device startups and beyond.

Physicians are brilliant, but brilliance doesn't automatically translate to investment wisdom.

Consider this: Why are these alternative investments being pitched to physicians? Typically, it's because they failed to attract institutional capital — the kind backed by sophisticated teams of analysts who dive into the financials of any opportunity that’s presented.

That means physicians are getting the leftovers, or they’re getting opportunities that are too small to make sense for big investors. 

Either way, you don’t need exotic alternative investments to become wealthy. The best investments for physicians are usually low-cost index funds that do the heavy lifting for you. And if you want to supplement those investments with some alternative investment options, that’s fine. It just shouldn't be your primary strategy.

The allure of alternative investments is always popular among physicians, probably because of high burnout rates. We see this consistently in the many surveys we do. The promise of easy passive income naturally appeals to exhausted MDs and DOs.

Stick to boring investments when you can because the low expenses allow you to keep more of your returns.

Step 7: Use a physician mortgage for your home purchase

Buying a house won’t make you rich. But if you can avoid dumping a ton of money into your home, you’ll have plenty of cash in reserve for the inevitable large furniture purchase or home renovation you’ll be interested in doing at some point.

Physician mortgages offer a unique advantage: the ability to buy a home with as little as 0% down. We maintain a marketplace of options if you’re looking for a physician mortgage.

Keep in mind you can deduct the interest on mortgage principal up to $750,000. Anything above that amount can’t be itemized. If you understand the tax benefits of homeownership, you’ll make a smart home purchase and optimize your after-tax costs.

Being a rich physician is about having options

When I ask physicians what they’d do if they had $10 million tomorrow, most say one of two things: either they’d go part-time or reduce their hours, or they’d stop doing the least enjoyable parts of their practice.

The vast majority say they’d keep practicing medicine (and not retire).

But you don’t need $10 million to make these changes. You can cut your hours way faster than the time it’d take to reach decamillionaire status, and you can negotiate better working conditions long before reaching full professor or partner status.

You deserve to maximize the value of your profession. You sacrifice so much — personally and in your family life — to achieve what you’ve done. Follow these steps and become a rich physician. You’ve earned it. And if you need guidance along the way, our physician financial planning group at SLP Wealth is here to help.