Reply to What is Middle Class....Really?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]It's weird that this article doesn't seem to include a category for UMC professionals who accumulate wealth over time.  I guess they fall into the "Millionaire Next Door" category, but it's pretty odd that they weren't explicitly called out.  Yes, doctors and lawyers have to work for a living.  But the savvy ones also save and invest.  They many not get to the point of mid-six figure passive income, but they can do pretty well and generate low six-figure passive income...which is a lot of passive income.[/quote]
http://www2.ucsc.edu/whorulesamerica/power/investment_manager_2014.html

Here's the relevant extract:

One might think that physicians, America's highest-paid professional group, would be largely exempt from the economic currents affecting most other Americans. This isn't so. Medscape, a key physician website, reports that as of 2013, mean income for male physicians in all specialties was $259k; for female physicians, it was $199k. Family practice doctors and internists earned the least, averaging around $175k. Orthopedic surgeons earned the most, averaging around $405k; they are the only physician specialty falling within the top 1% by income. If we assume an income of $259k before taxes, our male physician filing jointly would bring home about $200k after taxes annually (or about $16,600 per month). In most of the U.S., it is likely that living well, raising a family, and other expenses would make it difficult to save more than $4,000 to $5,000 per month, or around $50k to $60k per year.

If our hypothetical physician saves and invests for 35 years, he will have contributed less than $2 million dollars to retirement plans; with growth over time, the absolute number will be larger but the purchasing power of each dollar will be less. Future returns in investment markets are somewhat unpredictable, as is inflation. Thus, an average physician — while doing very well by most people's standards — is unlikely to earn or accumulate enough to place him or her in the top 1% by income or net worth at the end of their career. Opportunity for most Americans, even physicians, is decreasing, even while net worth and income accelerate for those at the very top of the system. If an average physician today is unlikely to make it into the top 1% (Piketty and Saez's end-of-2012 data show that the 1% income line is crossed with an income of $396k per year), then it seems pretty clear that crossling that line via income, savings, and investments will be impossible for nearly every American in the future.[/quote]
It's interesting, because literally every doctor I know likely earns more than these average numbers based on their lifestyle...and it's hard to believe that they are all above average practitioners.

Regardless, though, it still seems like these incomes would put them above the "millionaire next door" school teachers.  Maybe not.[/quote]

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