Money Meets Medicine Podcast

The Diminishing Return of Working More

Note: Looking for a comprehensive financial platform that is created for doctors, by doctors?  Make sure to join the Attend waitlist! Launching in the summer of 2023!

Physician Disability Insurance

It often pays to work smarter, not harder, yet many doctors put in more and more hours to make more money in medicine. But is working more always a good idea?

I think there are pros and cons to working more shifts in medicine. Personal finance is personal, and you have to assess whether you feel you’re being compensated fairly for the time and energy you put into your work. Yes, you have expenses to cover, but remember the importance of work life balance, especially as it pertains to physician burnout.

Whether you work more or not, the choice should be yours

Lisha hasn’t quite felt the diminishing returns of working extra shifts just yet. But before she went to medical school, she was a policy intern at a think tank in Washington DC. It was a nonprofit that didn’t pay particularly well, especially for people like her who were fresh out of college.

She wasn’t making a lot of money, and she quickly realized that to keep food on the table and money in the bank, she would need to work more. She ended up getting a second job at a gym that was open after-hours and between that and the long commutes quickly became exhausted.

But this lesson came in handy when she entered fellowship and had the choice to take on after-hours urgent care work in sports medicine. She thought about her actual take-home pay post-tax, the time and gas spent to get to and from the clinic, the time spent de-stressing after treating 10 patients in 2 hours and decided the pay offered didn’t cover those costs.

I used to moonlight in residency, and we had an opportunity that we jokingly called “sleeping for dollars.” The hospital had to have an in-house physician to take care of overnight emergencies for post-surgical patients. But since this was in a lower acuity, outpatient hospital setup, you were almost never needed.

When I became an attending physician, picking up an extra shift was pretty decent money. I’ve mentioned several times before that in earlier life, my wife and I had just over $200,000 in loans.

Our goal from the get-go was to eliminate all of our monthly payments so that our required monthly standard of living used as few funds as possible. Getting rid of our debt was hugely important to us. It was worth it to me to take on extra shifts, earn a bunch of extra money and ultimately pay off that $200,000 in 19 months.

The role of emotional return on investment in physician burnout

Now, the extra shifts I was picking up were historically not the most popular shifts, but because they were harder work, you got paid more to do them.

As time went on, I noticed an interesting shift happening in my workplace. In those first two years, picking up extra work was somewhat elective. I could choose to do it or not. Then we got short-staffed because our needs for anesthesia grew, but our footprint didn’t grow correspondingly with it. Suddenly I was working more than I wanted to, and not by choice.

I started missing my kids’ sporting events and recitals, essentially leaving my wife to deal with everything as a single mom. The longer it went on, extra shifts weren’t worth it anymore.

You have to consider the emotional return on investment just as much as the financial return on investment.

If you’re getting paid in either of those arenas, you’ll typically feel like the reward is worth the effort. But if the emotional return on investment starts to sag, then that financial return on investment doesn’t even matter.

Understand your responsibility in creating work life balance

You have to know your role in creating your own work life balance. I can’t tell you how many times I’ve spoken with doctors who’ve told me, “My family went on vacation to the beach last week, but I didn’t go.”

When I ask why that is, they say, “Because I was paying for the vacation. Every day that I would have missed a shift, I was losing $2,000. And so a $5,000 vacation plus the $10,000 I would miss for those five days of work creates a $15,000 vacation instead of a $5,000 vacation.”

Essentially, they’ve wrapped their mindset so far around the idea of shift work and working more to make more that they haven’t taken vacation in several years.

Yet I’ve coached so many physicians who say, “I think I’d be happier working four days a week,” but for one reason or another haven’t taken steps to see if that’s a viable option.

Not every job can allow you to have a flexible work schedule and go part-time, but I think a lot of people are surprised by the fact that it’s an option if they’d ask.

If you can adjust your financial goals and lifestyle to accommodate for slightly less pay, and it not feel like a huge adjustment, then you could have more of the time that you’re looking for.

And it’s not just the time itself, but what you do with that time – irreplaceable experiences, being there for your kids while they’re still kids, enjoying your spouse and your family, traveling, creating memories – that makes the greatest impact.

Physician burnout doesn’t have a black and white solution

Is there always a diminishing return on working more? It’s not a black and white answer. Personal finance is personal, and so are the phases of life we find ourselves in at one point or another.

Maybe early in your life, you actually want to do shift work because you’re focused on paying down your student loan debt, or you’re focused on saving for a house and you’ve got multiple needs for cash and the capacity to work more.

But maybe when you’re older, you’re rid of some of those debts, and you have a family you want to see and other interests you want to pursue, all of a sudden working more to earn more doesn’t look as good.

It’s something you have to evaluate often, particularly with physician burnout being such a risk factor.

Consider additional tax cuts and how you value your time

One piece piece that could help you realize whether working more is the answer for you
is the diminishing return based on taxes. There’s a breakpoint with adjusted gross income where the federal tax rate goes from 26% to 32%.

For me personally, it very quickly becomes a moot point when I have a 32% marginal tax rate and a 5 or 6% state tax rate, meaning any additional work that I do is marginal income, and that marginal income will be taxed around 35%.

For every $100 I make, I get to keep $65. That’s a diminishing return, and it’s not really worth it for me.

Vicki Robin, author of Your Money or Your Life, encourages readers to break down your workload, the hours it takes to complete, and the amount of money you make, to determine what an hour of your life is worth.

In anesthesia, an hour of work is worth $115. So when I decide not to work and coach my kid’s soccer practice, I’m saying it’s worth $115 for me, because I could theoretically work another hour and make $115 post-tax.

Thinking about time and money through this lens helps you to spend and earn money in an intentional way.

Consider whether work life balance could exist outside medicine

There’s a reason why there’s a movement of doctors looking to earn “passive income.” Of course, no income is 100% passive. My latest book, for instance, took several months and hundreds of hours to write. But now that my part is done and it’s out in the world, I get a check every month without having to do additional work.

The same is true of any passive income, real estate avenues included. You have to do your due diligence upfront and learn how to do that, but it can pay off in the end.

If you’re a doctor that’s telling yourself, ”I have a limited skillset. I can’t do anything outside of medicine,” it’s just not true. I can’t tell you the number of physicians that branch out and wish they’d pivoted sooner.

There are ways to make money that don’t require you to work more. Maybe you love the amount of work that you have right now, but if you’re finding yourself burning out, wanting to work less, or not having that work life balance that you’re looking for, consider these options and do some reflective work to think about how you can get to where you want to be.

Subscribe and Share

If you love the show – and want to provide a 5-star review – please go to your podcast player of choice and subscribe, share, and leave a review to help other listeners find The Physician Philosopher Podcast, too!


Submit a Comment

Your email address will not be published. Required fields are marked *

You might also be interested in…

Following the Financial Crowd

Following the Financial Crowd

Have you ever left a sporting event, following the crowd, and suddenly realized you were walking the wrong way? What if I told you this phenomenon has a name, and it impacts your money, too?

Understanding our own behavior when it comes to finance is essential because it helps us mitigate wrong-for-us decision making around money. Unless you know these roadblocks exist, you can’t do much to stop them from derailing your financial goals.

Last week, we shared why human behavior matters for our financial lives by taking a look at the first 5 out of 10 psychological phenomena that can (and do) affect your personal finance goals: greed, fear, ego/overconfidence, loss aversion, and analysis paralysis.

This week, we’re diving back into behavioral finance (one of our favorite topics) to share five more types of unchecked human behavior that can sabotage your journey to building the wealth you want.

Greed, FOMO, and Bad Investments

Greed, FOMO, and Bad Investments

Despite our best intentions, certain emotions can keep us from building wealth. After many years arming physicians with the information they need to achieve financial wellness, I had a significant realization.

Information is one thing – behavior is another.

As the saying goes, money is 80% behavior and only 20% math.

Not only do I want to share important information about personal finance, I also want to help you recognize how certain behaviors can (and do) affect your finances.

Drawing from one of the classic books about investing, let’s go over five common behaviors that could be keeping you from achieving your financial goals.

How Doctors Can Get Good Financial Advice

How Doctors Can Get Good Financial Advice

Many doctors and high-income professionals hire financial advisors for any number of reasons. Either they’re too busy to handle their finances themselves, they don’t really know how to invest, or they want an expert on their side to make sure they’re on the right track.

So allow me to say from the start: I’m not against financial advisors, but I am against doctors (or anyone, really) being overcharged for bad advice.

There’s no shame in asking for help – you just want to get the help you need at a fair price.

You should be equipped enough to vet and evaluate your financial advisor so you’ll know whether they’re working well on your behalf. How can you be as confident as possible they’re acting in your best interest? This episode will help you find out.

Are you ready to live a life you love?