In Articles, blog, Real Estate, Uncategorized, Wealth

Sometimes I wonder if emergency room physicians have unconsciously bought into the same myth that other Americans harbor. Namely, that all doctors are rich.

I ponder this possibility because many highly-trained professionals don’t do smart things with their money early in their careers. maybe they are complacent because they have a high annual income and figure everything will work out in the end, if they just keep working hard.

This is dangerous thinking. To be about forty years old and still not realize the correlation between expanding net worth and retiring early is potentially devastating. Bambi with a stethoscope.

Of course, my concern that my colleagues think they are rich can’t possibly be true, and for some shocking reasons.

A new study released by Annals of Emergency Medicine (AEM) shows that ER doctors shoulder enormous debt from student loans. On average the burden is 25 percent greater than that of the average mortgage in the United States. Yes, it is tantamount to buying two homes simultaneously. You live in one home, while the other one buries you.

On average, ER docs owe about $212,000 for their education, whereas the average home loan in this nation is $168,000, according to AEM and

Some middle class homeowners may scoff if they believe all doctors automatically become wealthy once they are out of school. But how can you be instantly flush if you’re essentially starting a new business strapped with a debt of nearly a quarter million dollars? That’s a big hole to dig out of.

No, I am quite sure that anyone with that much debt is not daydreaming. But what about the next generation?


The size of the average student loan for emergency room physicians has grown nearly 56 percent in the last three years, according to Timothy Young, a member of the department of emergency medicine at the Lorma Linda Medical center in California.

Young and others are sounding the alarm after conducting 48 interviews with ER residents. Veteran doctors have to wonder, are we chasing new talent away from the profession? Many young people unaware that medical education loan debt has grown exponentially may naively assume they are only doing what previous generations did—borrow loads of money to be trained, then pay it back over time.

Yet that kind of thinking is also potentially devastating. Bambi without a calculator.

No, incredibly smart physicians have not bought into the notion that they are rich. Rather, they are probably feeling pinched like every other middle class person. I suspect that’s why they hesitate to take the types of investment risks that are necessary to significantly expand wealth. Not to mention, most doctors simply have not had time to learn anything about correct business practices and money growth.

That has to change. New and established doctors need help understanding the damaging effect of student loans, and the laws of economics that will help them to overcome the burden of debt.

Otherwise, our nation may begin to lose quality physicians due to the extreme levels of stress associated with heavy debt and emergency room care.

And ER doctors must understand that they cannot mimic the kindly country doctor of past generations who practiced medicine into his or her eighties. No way. Burnout is inevitable for emergency medicine physicians who must deal daily with the dangers of drug addiction and overdose, children stricken with serious illnesses, the mentally ill and criminal element that rush to the hospital for care. Even witnessing loss of life on a regular basis is draining and spiritually numbing.

Freedom in the Black urges physicians to plan carefully for early retirement, or at least a reduction of patient-care responsibilities. And I’m dedicated to teaching physicians (and other professionals who have similar concerns) how they can overcome debt while expanding net worth. Call it Emergency Money Medicine.


Emergency medicine doctors are already experts in bad debt. The kind that eats you up with an enormous principle and nasty interest rate. Of course, students don’t label this debt “bad” when they are in school, because they are being trained. Regardless, any debt that handcuffs you for decades is a bummer.

Are there other types of bad debt? Absolutely. The most obvious is credit card debt. Even if you have a fairly reasonable interest rate you are a hostage to the money owed, unless you can pay off the balance each month.

It may come as a surprise that a loan to buy your own home rests under the label of bad debt too, even though it may be a good investment over the long term. The problem is the costly upkeep necessary over the years; in that sense, the home is a liability, not an asset. Homeowners put in a ton of money before they can profit from a home, if they profit at all.

But good debt, ah, enter the remedy for our financial needs. To embrace this concept most folks need to alter their way of thinking. When I suggest buying multi-family real estate the doubters say, “But that will add to my debts.” Let me clarify.

All debt puts demands on the borrower. But good debt involves earning passive income and expanding net worth. You are using borrowed money to buy real estate that expands in value. That’s very different from paying for a service, for example the instruction the med student who needs before becoming a professional.

Do you see the difference? If you are being crushed by student loans that’s because the service – the teaching, in this case – has already been rendered, and now you must go to work every day to pay it back. The same concept is at work when you use a credit card to buy a fancy dinner. Long after the thrill has faded the bill must be paid.

But good debt, the investment in multi-family real estate, is the debt that keeps giving. It is not a thing of the past but rather a golden path to a wealthy future.

How can this be? Your investment in the right kind of real estate creates income. The rent your many tenants send you each month serves two important purposes. 1) It pays for the loan that was needed to purchase the property. 2) It begins paying the owner of the property a monthly dividend, thus expanding income and net worth. And here’s the kicker, the income is earned without having to show up for work. That’s what I mean by “passive.”

Years ago authors Thomas J. Stanley and William D. Danko wrote a bestseller called “The Millionaire Next Door.” The book tells the surprising story of who in your neighborhood is wealthy and who is not. In a chapter named “Time, Energy, and Money” the writers compare two physicians, Dr. North and Dr. South.  Both doctors are in their fifties and enjoy a $700,000 annual income. Yet one has never accumulated significant wealth and fears he may not be able to retire in comfort, while the other is secure and has no financial concerns. The case studies included in the chapter debunk the myth that all doctors are wealthy.

I’ll be writing more about this dilemma, providing analysis, facts and figures, and solutions for emergency medical physicians and other professionals who are eager to acquire real wealth.

For now, your first goal is to make the mind shift necessary to understand the difference between good and bad debt. Once that is achieved, finding a multi-dwelling property to buy will make a lot more sense—even if you’re feeling pinched by student loans.

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