Doctor vs Plumber: Which person is WEALTHIER at Age 42

What's up you guys, it's Graham here! So I read a really interesting article the other day that showcased the difference between the net worth of a plumber and that of a doctor. The results were actually pretty surprising regarding who ends up having a higher net worth and at what age both careers balance out in terms of wealth. And the result is likely not what you'd expect.

So before I get into that, as always, if you enjoy videos like this, make sure to smash that like button, smash that subscribe button, and then if you have any ideas for future videos, make sure to comment down below. Let me know what your ideas are, and I'll make sure to incorporate them in future videos. So let's get to it!

Okay, so here's the experiment: You have two people, both starting off at the age of eighteen. One wants to be a plumber, one wants to be a doctor. Who is going to end up having a higher net worth, all things considered?

Now to do these calculations for congruence, we're going to assume that each profession saves and invests 50% of their take-home salary. We're also going to assume that the money they invest is going to be getting an 8% return. I'm also considering that each profession has pay increases that also increase with inflation.

So let's start out with the plumber first. The plumber starts out at the age of 18, making $12 an hour working as a plumber's apprentice. We can also assume a 50-hour work week at $12 an hour, meaning that our plumber is probably going to be pulling in about $2,400 a month, or $2,000 a month after taxes. If he invests 50% of that, we can assume that the plumber, in the very beginning, is able to invest $1,000 per month.

Now because the plumber never went to college, there are no student loans, there's no debt, and the plumber could begin making and investing money right off the bat. So now let's flash forward four years. Our plumber's now 22 years old and making $5,000 a month before taxes, or $4,000 a month after taxes, meaning the plumber is going to be able to invest $2,000 per month.

Then let's flash forward 10 years. The plumber is now 32 years old, making $100,000 before taxes, $70,000 after taxes, and can save and invest $3,000 per month.

So let's start here: At the age of 22, our plumber should be worth almost $60,000. That's four years of investing $1,000 per month at an 8% return. Then at the age of 28, our plumber should be worth almost two hundred and ninety thousand dollars. This is the base $60,000 that the plumber was worth at the age of 22, plus then investing two thousand dollars a month over the additional few years at an 8% return.

Now let's flash forward, and the plumber is now 50 years old. The plumber is now worth 3.8—you ready for this—million dollars! This is the plumber's $290,000 base plus three thousand dollars per month invested over twenty-two years at an 8% return. Let that sink in for a second—a plumber worth three point eight million dollars just by saving and investing over the course of his career. So our 18-year-old plumber became a 50-year-old multi-millionaire.

So now let's compare this with our doctor. Now the doctor is a little bit different because the doctor doesn't start saving and investing until much later in life. So let's assume that our doctor has four years of an undergraduate education that costs twenty thousand dollars a year. And let's also assume that the doctor pays down the student loans before investing anything.

So this means at the age of twenty-two, after four years of a college degree, our doctor is going to be worth negative eighty thousand dollars. Then after this four years of undergraduate, the doctor is then gonna have to go to four years of medical school. Let's then assume that each year medical school is going to cost this doctor fifty thousand dollars per year.

This means that at the age of twenty-six, after four years of undergraduate and four years of medical school, the doctor is going to be worth negative two hundred and eighty thousand dollars. This is without earning or investing a single dime. Now I'm not including interest payments on the debt or cost of living just to keep this simple.

Then after eight years of school and two hundred and eighty thousand dollars of debt, the doctor is then going to go between three and five years of residency. So let's assume four years of residency, and each year of residency pays sixty thousand dollars before taxes, or fifty thousand dollars after taxes. So I'll flash forward. Our doctor is thirty years old.

Our doctor has completed four years of undergraduate, four years of medical, four years of residency, and during those four years of residency, the doctor was able to pay down the student loans by $100,000, leaving his total net worth at the age of thirty as negative one hundred and eighty thousand dollars.

But after residency, the doctor all of a sudden starts earning a lot more money at the age of 31. Now remember, our plumber's the same age and making $100,000 before taxes. Our doctor, on the other hand, is going to make three hundred and twenty thousand dollars before taxes, or two hundred and fifty thousand dollars after taxes.

Now remember, of that two hundred and fifty thousand dollars after taxes, half of that is going to be going to pay down the student loan. So with that math, at the age of 32, our doctor's gonna have all the student loans paid off and a net worth of seventy-five thousand dollars.

So now at the age of forty, assuming the doctor is still making three hundred and twenty thousand dollars a year before taxes and investing half of his take-home pay, the doctor will then have a net worth of 1 million five hundred and seventy-five thousand dollars. And keep in mind, this is at the age of 40.

So now let's say at the age of 40, our doctor gets another pay raise from three hundred and twenty thousand dollars to four hundred and fifty thousand dollars a year before taxes. Now let's assume that's three hundred and fifty thousand dollars after taxes, and the doctor continues to invest half of it. By the age of fifty years old, our doctor is going to be worth six point one million dollars, or two point three million dollars more than the plumber.

Now this is where it gets super interesting. The break-even point between when the plumber and when the doctor are worth exactly the same is at the age of 42. This means that both professions, that took wildly drastic paths, are worth exactly the same at this point.

Now, there are some variables here that could impact things drastically. Like the plumber could have started their own business and made even more money and invested even more money. The doctor could end up with way more debt that takes way longer to pay off, or the doctor could have ended up earning way more money than three hundred and twenty thousand dollars. The doctor could maybe earn five hundred thousand dollars per year.

So either profession could really swing wildly in each direction. I also understand that the doctor could have a higher quality of life with a lot more discretionary income to spend, but this doesn't really include all the hours worked as a doctor and how that might be a lot more demanding than that of a plumber, or all the unpaid time in medical school that the doctor has spent studying and working. So there are some variables between the two that could swing things either way.

Now I also understand that most people who go into medicine don't do it for the money, and they do it because they really enjoy it and they enjoy helping people. But there are people out there that just think that becoming a doctor is gonna be a surefire way to make the most money possible, and this isn't always the case.

Although the entire point of this video is just to illustrate that the prestige of a career has less of an impact than just saving and investing consistently early on, and how that really has the biggest impact. It doesn't really matter what you do or where you went to school; you still have the potential to be wealthy and financially independent later on in life.

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