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July 12, 2010


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I'm loving the book as well (in fact, my last post was inspired by it) and find the contrast between physicians and farmers very interesting, especially since I am in health care/health care science.

I am happy that the principles of Millionaire Next Door have made you wealthy over time. I love hearing success stories like that. That one sentence really made my day. Regards,


A local doctor just filed for bankruptcy, actually, because he was being, well, a typical high-income doctor.

"Less than a year ago, Dr. Jeffrey Backenstoes bought a new $693,000 home in North Cornwall Township, to go along with his 2009 Jaguar valued at $41,000 and 2009 Lincoln MKS valued at $29,890.
On June 5, Backenstoes and his wife, Kim, filed for Chapter 13 personal liquidation bankruptcy with the U.S. Bankruptcy Court for the Middle District of Pennsylvania. On Saturday, they added a Chapter 7 liquidation bankruptcy for two limited liability corporations."

Hell, with all he did, he never even paid off his student loans, and still owes almost $150,000 on them!! He makes $153,000 a year and the bankruptcy filing proposes a monthly payment on all his debts of only $584. Amazing.

I'll never forget the story of the farmer that rented land from us growing up. The family owned lots of farmland around us and have been farming for at least 4 generations. Grandpa went into the car dealership to buy a car. Of course, he was in his coveralls. The car salesman looked at him like he didn't think he could buy a thing. Grandpa pointed to the car he wanted and pulled out the cash to buy it. Never judge a book by its cover!!!

Having been around farmers all my life (growing up in a farming town) and doctors, there is a different attitude among them. Farmers are willing to work hard and do what it takes. Doctors have a sense of entitlement. This isn't ALL, but it is a general statement.

Uh, it makes a nice object lesson, but a couple comments (& because I'm contrary! :) )
1. Doctors have to pay for medical school and farmers don't.
2. A doctor can't even begin earning income until after 4 years of med school and then another 4-10 years of residency. Farmers typically start their career right after high school or sometimes a little college.
3. Doctors have to pay for malpractice insurance.
4. If they're in private practice, they have to come up with money to purchase or buy into a practice with office space and a secretary plus a nurse. Most farmers inherit the land the work.
5. Many farmers receive payments by the federal govenment for...? They don't consider this welfare, even though it is.
6. Doctors have to maintain an image for their jobs, because people have to place a huge amount of trust in them. Would you go to see a doctor who looked like your typical farmer? Not a cute young 4-H er, but the old guy who looks like he hasn't trimmed his nails in a year? Dressed in old jeans and driving a 20 year old 4x4 half rusted out? Hey, he's only going to cut you open and take out your appendix---why do you want him to look competent and clean or anything?
7. Doctors have to maintain their license by spending time studying CME courses. This costs money as well.
8. What good is a high net worth if you don't have cash flow? Must suck to be a farmer and know you're worth a lot in land & cows, but it's not liquid and you can't sell any of it or you won't have a business tomorrow.
9. I think the real thing to note is that almost all farmers inherited their jobs and the land and cattle and capital for it. And a lot of them end up liquidating and doing something else for a living because it's a super hard life. Don't see anybody coming in and wanting to be a farmer, putting up the millions you'd need to get started.

"The principle holds though: pick an occupation you enjoy, don't worry about "keeping up with the Joneses", and spend less than you earn. Do this for a long period of time, and you'll be wealthy."

I really wish this was the bottom line. But I'm living proof that one can do just this, and still be dirt-poor, because 'what they enjoy' doesn't even pay a living wage. I know I sound like a broken record, but I don't want others to fall into this trap of thinking like I did. I *always* lived below my means, and because of this, I do have a small amount of savings (invested in mutual funds, CDs and stocks). And I'm debt-free. But wealthy? HA. I'm below the poverty line, and middle aged, and not only will I never be wealthy, I also will most likely never be able to retire (For all my years of working and living below my means, I've only managed to save enough for 2 years of 'retirement').

I completely agree w/KH. Farmers are not the best example since there is a family tie (handed down over generations). Doctors oftentimes have at least one parent who is a prominent medical professional, but would like to see their child choose a different path. The costs, time away from family, and overhead for a successful doctor leaves him well behind financially for a good, long time.

I do like the idea of keeping your 'eyes on the prize' (no matter what your profession/career) by putting your earnings to work early and often through saving and investing, while time is on your side.

From KH's post
"Doctors have to maintain an image for their jobs, because people have to place a huge amount of trust in them. Would you go to see a doctor who looked like your typical farmer? Not a cute young 4-H er, but the old guy who looks like he hasn't trimmed his nails in a year? Dressed in old jeans and driving a 20 year old 4x4 half rusted out? Hey, he's only going to cut you open and take out your appendix---why do you want him to look competent and clean or anything?"

Does anyone know what neighborhood their doctor lives in?
Does anyone know what kind of car their doctor drives?
Does anyone know what country club their doctor is a member of?
Does anyone know what expensive hobby their doctor is involved in?

The argument that they need to maintain an "image" commensurate with their profession is ridiculous. They may think this but I guarantee that most of their customers (us) could not even tell you the medical school they attended! This lifestyle issue is still a choice that has little or no relevance on their success in their profession. They can choose to live below their means (and I am sure some do - 25% of doctors if your stats are accurate). It just appears that more farmers make this choice and live that life than doctors but there are still many doctors who choose to live below their means and save.

I grew up on a dairy farm so I know farmers to be the most genuine, hard worker people. Plus they are the most skilled workers in the land. Maybe they don't attend 7+ years of college, but many do actually attend college and get degrees in agriculture. Many do inherit their farms, but they need to also keep on top of local trends and new practices/equipment, fed/state regulations, etc. Plus, in this day and age farms need to be larger and larger so the younger farmers even if they inherit their parents' farm need to invest and buy more. Farmers don't just til the land and feed animals, they are accountants, mechanics, veterinarians, feed-specialists, parents, chefs, etc. And work around the clock 24-7. And maybe they don't pay for malpractice insurance, but they have high insurance rates (which they pay 100% of) because of the dangerous nature of what they do (I know many men with missing digits, limbs, and a local neighbor "boy" that's on his "fifth life")

My parents have since left farming and now rent out the buildings and some of the land to a local neighbor...who with his sons runs 3+ small dairies just to make ends meet plus his wife works outside the home.

And believe it or run into "keeping of with the Jones" as well...maybe not for Jaguars and country club membership, but for pickup trucks and tractors.

I highly respect doctors, I was premed for a little while, but I don't know any doctor that works 7 days a week for unknown results and many times pittance. The money from the federal government many times kept food on our table, and clothes on our back. You can call it "welfare" if you want, but it's farmers that keep you fed as well and if they are struggling you should be happy that the are being helped to keep afloat and food on everyone's tables.

This really is a comparison of apples to oranges.

The ROI of a doctor's education is probably pretty low- especially these days. I bet the average doctor starts their career in their 30s and has 250k or more of debt. If you have 250k in education debt and a 350k mortgage, you are paying a lot of money to pay down debt and 200k average salary wont get you very far.

My grandfather was a doctor, and I am told he finally paid off his student loans in his late 40s. A farmer can start working in their early 20s at the latest, and have zero education debt. (10 years of earnings and zero debt costs is a major leg up financially.)

My other grandparents were farmers... they died far wealthier than the doctor grandparents (they also died later in life, but still).

Totally agree there are a number of social pressures placed on a doctor motivating consumption that dont exist for a farmer. The income of a farmer tends to have greater risk than a doctor's income- thus greater spending and debt is easier for the doctor.


FMF's choice of the words "a profession you enjoy" is unfortunately over-simplified. This topic has been covered here before and you are exactly correct. Enjoyment of profession is nice but it guarantees you nothing other than you will enjoy your work. "Do what you love and the money will come" is a cruel lie. I really wish that phrase and those like it would go away because unfortunately some people believe them.


I grew up on a farm, but did not choose to become a farmer (I enjoy farm life and farm work, money was the reason I chose not to do it).

1-3) Doctor's costs and education etc are not relevant. They chose their path and that's a cost of doing business. They make plenty of money once fully employed to pay down their debt and live a nice life and still grow a net worth.

4) In case you aren't aware, most humans live to be close to 80. By the time the parent farmer is dead their kids are usually well into their 50s. They are not inheriting the operation to start up. Often times was happens is the kid or kids is 20 and wants to farm and the dad is trying to figure out how he can make it if he brings the kids into the operation and so they have to go out and buy more equipment, get more land (hard to find as everyone wants more land) borrow to the hilt and take on lots more risk when the dad is 50 and wants to slow it down but he has to put it all out there again to try to get the kid into the business. So the starting farmer is not being handed a gift while the private practice doctor has to go buy his.

5) You are exactly right about ag subsidies. I think they are bogus. Farmers obviously disagree as does just about anyone getting a govt payment, but I fully concede this point.

6) This was already addressed above so I won't go into the image issue.

7) Just another cost of doing business. Farmers don't have any costs of doing business right? Farmer's regularily borrow over 1 million dollars every year just to put in the crop and then if the weather cooperates and the prices are ok they hope to keep 100K in profit at the end (which they need to live off of as well). There are huge investments and outlays of capital involved in farming. It is very much a business operation.

8) This is exactly the reason I didn't go into farming. You are exactly right that cash flow tends to be tight. In fact I would argue that farmers are not some kind of low status high savings type of people. It's actually just a necessity of the job that makes them wealthy. The enterprise requires so much capital investment just to keep it going that by its very nature there is not much extra cash to waste as everything has to be poured into extra equipment and extra land to continue to grow the operation (it runs on smaller margins all the time so you have to get bigger or die). So the reason they are wealthy is when they finally quit all the land and equipment is worth a lot of money. Now the farmer who is always buying tons of new equipment and new pickups and a very nice new house and new toys they are borrowed so heavily that they aren't worth much so they can blow it too. But most farmers realize thats a good way to go broke if one bad thing happens so the nature of the business forces them to live a low status, high investment lifestyle to maintain the business.

As farming has become more lucrative in the last couple decades, you do so more conspicuous spending by farmers than you used to. I am confident that if the free cash flow was available they would make most of the same silly spending choices doctors make.

9) Again farmers don't inherit their land and cattle until they are very well established in the farming. It is true their dad's usually help them get started but the dad can't hand over the farm when he is 50. It just doesn't happen.

You very last statement shows that you are clearly just making this crap up and don't know a thing about farming. You say most farmers end up liquidating and doing something else for a LIVING because its a super hard life? Have you ever talked to a farmer? Almost all farmers love being farmers. They never want to quit. Thats why their are 85 year old farmers. By 85 they are so set financially they clearly don't need to farm. Yet they do. I don't know of a single farmer who by choice quit farming and went and got a different job. Only if they went broke and were forced out does that happen.

Farmers have a number of things that help them like the govt and family who helps get them into the business (but not with inheritance to start off with). But make no mistake, farmers are high networth only because they invest so much of their assets back into their business rather than spend it on consumption. And that happens by necessity not by choice. Yet it still proves that saving/investing rather than consumption is what leads to wealth, whether it's voluntary or compulsary doesn't matter, it works either way.

As of 2005, something like 98% of farms were family-owned. If that's right, you've got little personal debt and a jump start on your business, if you're a family farmer. Juxtapose that with an individual physician who comes out of med school often with significant debt and either sets up their own practice or takes a junior position in an existing practice. I would think that would explain the wealth discrepancy at least as well as citified hyperconsumerism.

I completely disagree with most of your points, for many of the reasons others have pointed out, but I'll add some more comments. FYI, A couple of my cousins are farmers, I have PhD in the physical sciences - and know a quite a few number of med students / MDs.

Farmer's often have several children, they can't just give their farm to the one son who goes into farming and then give your other son and daughter nothing? This is pretty typical. The capital costs of farming are tremendous, one advantage farmers have is their local bank isn't going to give them a loan (unlike student loans) without the proper ROI analysis.

Specifically Regarding
3 - Doctors don't have to purchase crop insurance, whether directly or indirectly through pre-arranged prices.

5. Third party payer of medical care is an enormous subsidy. If people had to pay for their own care, medical prices would be much lower. Medical spending is also tax advantaged, a benefit doctors certainly get a cut of.

6. This is complete BS. A reasonable shirt, tie, and white coat are pretty cheap. I've never seen my doctor's house or car. Would you really think less of your doctor if he drove a brand new 20K Honda accord?

7. Farm technology changes all the time. My cousin applies different fertilizer mixtures continuously based on GPS position in the field and last years crop yield.

I think the best plan is to make a high income w/out having to sink a lot into your education (doctor) or capital costs (farmer) and live in an area w/ high paying salaries, but don't believe the hype and spend way less than you make. Might be harder to do with a family, but as a single person it's doable. As long as you don't buy real estate in the high-paying (high cost) area.

"And of course, enjoy yourself along the way. Just because you spend less than you earn doesn't mean that you can't have fun with the money you do spend, now does it?"

I'm living those two sentences. :-)

Spending less than you earn is the key to financial success. Budgeting in the fun things in life is the key to happiness. Putting the two things together makes for a great life in my opinion.

As BD reminded us though, there does need to be a significant gap between earnings and expenses for long-term savings to accumulate. My husband and I are truly thankful for the fact that there is enough of a gap to afford fun stuff and early retirement at the same time. :-)

I completely agree with the principle of "spend less than you earn." It is a big reason my wife and I are doing well financially; I've been reading FMF for a long time! However, I do think the comparison of farmers to doctors is a little unfair. They are such different occupations I'm not sure you can even make a comparison.

Farming in the US continues to be greatly subsidized by the Federal Government. Often these payments are payments NOT to farm to support commodity prices so that large agribusinesses have favorable export opportunities.

Here's some information on the $15.4 billion in farm subsidies directly paid to farmers last year.

Now, to be fair to the little guys, who are averaging only about $8000 in subsidies per year, many of the largest subsidy recipients are large agribusinesses. If the data analysis is mistakenly capturing these businesses as family farms, that would help explain the preponderance of farming millionaires.

Apex (and others) --

Sorry, I wasn't clear (or wasn't thinking when I wrote this.) My position on "do what you love" versus "do what pays" is to "do what you like." Details here:

Actually this is a great comparison because each side receives subsidies from the Federal government in some shape or form. There will always be outliers on the bell curve in both examples and there will be farmers and physicians who are wealthy or poor.

After being raised on a farm and now being a physician all I can say is that both professions put a tremendous amount of time into their work and are assets to society.

I am 33 years old and just finishing residency with student loans greater than most mortgages. The financial decisions I make in theses first few years of practice will have a tremendous impact on my long term wealth. There are no shortcuts but I hope that the higher average income for a physician allows for a greater margin of error on the path towards wealth.

If that greater margin of error were to disappear in the future, I would be less likely to recommend that others take the same risks.

@ Dr. T - With all that is going on with healthcare - are people saying that Dr.'s incomes are going to go down? I am guessing that will be the case. There will not be much motivation for people to go to med school and rack up student loans if they cannot even pay for them once they get out.

Farmers may not need to go to college (though many do), but all my friends who are farmers have been learning since they could walk.

My friends at age 14 had already helped birth and butcher cows and other animals, tore apart and repaired tractors and other machinery, operated tractors, built barns and installed electricity and plubming in them...

I was and still am jealous of all the things they know how to do!

I'm a medical student in my 4th year. I will be the first physician in my family and everyone is really proud about that, but I by the time I finish this year, I will have approximately $110,000 in debt! I'm going into psychiatry, and my income yearly is estimated to be about $100,000 after residency, which for me will be approximately 5 years. During those those 5 years, I will start at a salary of about $42,000, and will have to pay housing, cost of living, insurance on my vehicle, (in some places) health insurance on my own, PLUS having to pay off loans, which will cost about $1200 per month. Many residents are struggling to live, and these people are not living high- they live in crap apartments, with crap vehicles, and don't really have time to pursue "expensive hobbies". The married ones tend to do better because there's another income, but I assure you, becoming a physician is not an easy money-making endeavor. My debt keeps me up at night and that's why I spend my time learning how to spend less and organize my finances for the blow that will be residency.

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