they can only scale at most linearly, with the number of hours they work.
A financier can scale multiplicatively, because the amount of the monies they deal with can increase without "extra work". The multiplicative nature means the more capital you have access to, the more money you get to make, which approaches exponential at some point.
And in the end, the financier speculating on the markets can affect many more people than the doctor ever can in their life.
Doctors very much charge for time. By definition, their work doesn't scale. But because of their immense training, they get to charge _a lot_ for that time.
The same is true in law. Just because you have 10,000 hours of training doesn't mean you aren't billing by the hour.
This is why there are many many doctor and attorney millionaires and very few doctor/attorney billionaires.
Again, the original point isn’t that it’s impossible to get rich by selling your time but that you’ll most likely need some leverage (i.e. in the form of owning a business)
Doctors have to see multiple dozens of patients a day. Often their life sucks, have to sleep on the job in the hospital, etc. Never be envious with their plot, private capital sucks the juice out of everyone unlese we fight back.
I think your analysis is great too. The power law advantages are what’s both wonderful and terrifying about this field.
Although surgeons aren’t really in the power-law game; at best they can do a handful of surgeries a week. But yes I chose that example specifically because many of them are tempermentally detached from people, get paid a lot, and are often workaholics. But we don’t see people revolting against surgeons.
> The majority of income differences comes from your skill. A doctor earn much more than a cashier due to having a more valuable skill, and that span makes up the bulk of gini coefficient.
Training certainly big plays a role, but the majority of a doctor's income, at least in the United States, comes from the fact that they're part of a labor cartel which artificially limits the number of doctors. No such cartel exists for cashiers.
It's why even a mediocre doctor in the United States can make significantly more there than anywhere else in the world despite receiving equivalent training.
But a doctor always has options--many, many options. Even a doctor who loses his license has options. Part of being working class is being stuck in wage labor--not absolutely, but nonetheless quite predictably. There's even a special term for doctors, professional class, which describes their prospects independent of their present economic situation.
No matter how much money or wealth one has, one almost always feels like they're stuck in their situation. That's part of the human condition. And expenses rising to meet income is also typical, at least in the U.S. But different classes of people have objectively different sets of options available to them, regardless of whether they appreciate those options or not.
Also, $600k/year is a ton of money. I make half that and carry a mortgage, apartment lease (temporarily, hopefully), partial second apartment lease (mother), and office lease all in San Francisco, in addition to paying down $130k in law school debt, as well as typical family expenses (two young children). To blow through $600k/year this doctor must have some serious issues. I can only assume the doctor's home is several million dollars, so even at 5% equity a double-wide trailer and bait shop should be well within his reach. But, again, regardless, this doctor has unfathomably more options than a typical working class family. (As do I, for that matter.) To compare the situations is borderline obscene.
That's because of leverage. MD : consultant is 1:7 or so. Plus another 1:2 or 3 for admin staff. So there is a limit to the scale of wealth generated. That said, MDs make 10x what entry level consultants get.
This is different than tech where exec : professional staff can be 1:x,000 or more.
You just proved my point! Doctors who work in a group practice have a fiduciary duty to grow revenue. Does that mean doctors cut corners to make more money? I'm sure some do.
Do private prisons fight relaxing laws to make more money? I'm sure some do, but most don't.
Bearing in mind that we are talking strictly in the financial sense — and not, for example, about risky medical decisions — can you explain what you're talking about further? What major risky investments do doctors make on a regular basis?
Thanks again. Another question, just to figure out how medicine is an odd industry: how inelastic is doctors’ preference for an upper middle class lifestyle, especially at the cost of 70-hour workweeks?
I can see why hospital administration would drive doctors with that inelastic preference to work long hours. But if there is a sizable pool of doctors who’d rather get paid less to work less, that suggests some firm can come along, make such a hospital, hire those people and do ok, maybe even better since their doctors are not as overworked.
Even in the West, a doctor who becomes the CEO of a successful medical supplies company or the administrator for an upscale hospital will make more than a doctor running their own practice who make more than a regular doctor employed by a corporation. Keep in mind there’s also a wide variety of “medical practitioners” like chiropractors, therapists, various “unlicensed medical practitioners” who practice eastern medicine etc. Even within traditional medicine you’ve got your small GP whose struggling to keep their practice afloat (it’s a regular business) and extremely wealthy surgeons or other doctors who identify a niche they can make extremey lucrative (eg unscrupulous pain management doctors who process high volume and low effort clients).
There’s a wide variety of outcomes even after the great filter that are MCATs and medical school.
For example, Thomas F. Frist Jr. is worth ~13 billion. Now granted at those levels he’s more an entrepreneur/businessman as all such people are. Still, the difference between his net worth and a regular GP making $400k is probably about the same difference as a musician worth $300 million and a musician making $200/year.
Top executives and superstars can make lots of money. There are also very few of them and there's a winner-take-all mechanic. I wouldn't choose that as a path to wealth unless I have some unfair advantage. It's not a path available to your average person.
> Odds are a doctor making 7-figures will become more rich compared to an entrepreneur who dropped out of college.
The only doctors that make that much are either superstars with a brand of their own, or entrepreneurs with their own practice.
Doctors these days don't make that much money, but it varies a lot depending on location and specialization. I'd rather be a programmer or a lawyer from a money perspective.
they can only scale at most linearly, with the number of hours they work.
A financier can scale multiplicatively, because the amount of the monies they deal with can increase without "extra work". The multiplicative nature means the more capital you have access to, the more money you get to make, which approaches exponential at some point.
And in the end, the financier speculating on the markets can affect many more people than the doctor ever can in their life.
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