Realistic salary for private practice

[deleted1064759]

Anyone able to talk some hard numbers on psych solo practice? Cash only

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[ObsequiousAplomb]

Anyone able to talk some hard numbers on psych solo practice? Cash only

$5 < solo practice salary < $5,000,000

 

[BiscoDisco]

What's a reasonable policy for no shows? Obviously keeping a credit card on file makes no show fees much easier to collect. But how much can you/do you charge?

 

[Ironspy]

What's a reasonable policy for no shows? Obviously keeping a credit card on file makes no show fees much easier to collect. But how much can you/do you charge?

I charge the full fee of the scheduled appointment. Cuts down on no shows significantly

As for salary range it varies from 100k-seven figures in private practice. If you want to hit the high numbers you need to employ therapists/psychiatrists

 

[calvnandhobbs68]

What's a reasonable policy for no shows? Obviously keeping a credit card on file makes no show fees much easier to collect. But how much can you/do you charge?

We charge $80 for followup no shows/late cancels although I usually waive the first late cancel if it's reasonable (kid sick, funeral, can't get out of school, etc). So somewhere in between nothing and full fee.

Intake no shows are pay $175 no show fee before you can reschedule the intake but honestly its 50/50 on if this ever gets paid because usually if someone no shows an intake they ain't coming to see you anymore.

 

[dl2dp2]

$5 < solo practice salary < $5,000,000

It really is like this, @GoFast--DontDie

The variance in cash PP is huge. In talking to a few colleagues. Some just can't make it work and make sub 100k for a number of years and end up going back to employment. Others start grossing 1M a year in year 1-2, and close out to new patients (this person did a leveraged buy-out of an old practice).

I would say median of cash PP is similar to median of employment. Otherwise nobody would go employment.

I'm not sure what you are looking for in terms of "hard numbers". There are surveys on this topic and roughly corresponds to the above.

 

[Psychresy]

I charge the full fee of the scheduled appointment. Cuts down on no shows significantly

As for salary range it varies from 100k-seven figures in private practice. If you want to hit the high numbers you need to employ therapists/psychiatrists

Can someone speak to the process of hiring therapists, how to maximize their value to your practice, etc?

 

[deleted1064759]

It really is like this, @GoFast--DontDie

The variance in cash PP is huge. In talking to a few colleagues. Some just can't make it work and make sub 100k for a number of years and end up going back to employment. Others start grossing 1M a year in year 1-2, and close out to new patients (this person did a leveraged buy-out of an old practice).

I would say median of cash PP is similar to median of employment. Otherwise nobody would go employment.

I'm not sure what you are looking for in terms of "hard numbers". There are surveys on this topic and roughly corresponds to the above.

Why can't some just not make it work? Not able to get patients?

 

[whopper]

I bring in about $450K gross. About 25% gets taken off for overhead. One thing, however, about overhead is a lot of that stuff you can keep so long as you follow the rules. E.g. you buy an office chair, so long as it's in your office for about a year, you can take it home, and then buy another office chair, all charged as a business expense.

So pens, computers, printers, office equipment, cups, furniture, I bought a kick ass gaming monitor, and now it's at home. Cell phones, cell phone coverage, this does, in the end, come to several thousand a year. I bought some original artwork, put it in my office, and then eventually brought it home. I also became friends with the artist who is famous within the fan base he caters to, so that was an added plus. I'm thinking of buying more original artwork but I got a fear one of my kids will ruin it.

I had a side-gig as a medical director but I just got out of it. That brought in about $120K a year. So the time put into that can be reinvested into my office and that'll bring up the revenue about another $60K a year, so the loss isn't that much. On top of it there were goings on at the other place I didn't agree with so I was glad to get out of it.

I have plans in place that could bring my revenue about another $200K a year without me doing much work or sacrificing on the quality. The plan involves having NPs work under me and I'll take up about 10-15% of what they bring in. I've already worked with some of these NPs and they're awesome. The work will come out to likely about 1 hour per week per NP. On top of this I have a revenue stream from investing but since this thread is about a private practice I'll leave this out.

I've said this before. I love being a psychiatrist. Eventually the revenue from investments will be to the point where I don't need to work as a psychiatrist but I love doing it. I'll just spend some less time doing it for revenue and more time for enjoyment, and spend more time maintaining myself as I get older. E.g. exercise, diet, mental health. etc.

 

[forchinet121]

I bring in about $450K gross. About 25% gets taken off for overhead. One thing, however, about overhead is a lot of that stuff you can keep so long as you follow the rules. E.g. you buy an office chair, so long as it's in your office for about a year, you can take it home, and then buy another office chair, all charged as a business expense.

So pens, computers, printers, office equipment, cups, furniture, I bought a kick ass gaming monitor, and now it's at home. Cell phones, cell phone coverage, this does, in the end, come to several thousand a year. I bought some original artwork, put it in my office, and then eventually brought it home. I also became friends with the artist who is famous within the fan base he caters to, so that was an added plus. I'm thinking of buying more original artwork but I got a fear one of my kids will ruin it.

I had a side-gig as a medical director but I just got out of it. That brought in about $120K a year. So the time put into that can be reinvested into my office and that'll bring up the revenue about another $60K a year, so the loss isn't that much. On top of it there were goings on at the other place I didn't agree with so I was glad to get out of it.

I have plans in place that could bring my revenue about another $200K a year without me doing much work or sacrificing on the quality. The plan involves having NPs work under me and I'll take up about 10-15% of what they bring in. I've already worked with some of these NPs and they're awesome. The work will come out to likely about 1 hour per week per NP. On top of this I have a revenue stream from investing but since this thread is about a private practice I'll leave this out.

I've said this before. I love being a psychiatrist. Eventually the revenue from investments will be to the point where I don't need to work as a psychiatrist but I love doing it. I'll just spend some less time doing it for revenue and more time for enjoyment, and spend more time maintaining myself as I get older. E.g. exercise, diet, mental health. etc.

Working with NPs is bad news

 

[clozareal]

We charge $80 for followup no shows/late cancels although I usually waive the first late cancel if it's reasonable (kid sick, funeral, can't get out of school, etc). So somewhere in between nothing and full fee.

Intake no shows are pay $175 no show fee before you can reschedule the intake but honestly its 50/50 on if this ever gets paid because usually if someone no shows an intake they ain't coming to see you anymore.

Do you offer the waived first cancellation or do you wait until they ask you/charge them and refund?

 

[clozareal]

I would say median of cash PP is similar to median of employment. Otherwise nobody would go employment.

Perhaps, but some of my colleagues who went the employed route really hate doing the admin work and especially hate/afraid of doing the business work (marketing and networking to get new referrals, building a website, creating practice policies for yourself). Other colleagues got lonely in private practice.

 

[dl2dp2]

Why can't some just not make it work? Not able to get patients?

That is the main reason. To be more specific, I think if you drop your fees and advertise on Google, anyone can get a lot of patients relatively quickly these days, but this effectively changes your practice from "cash" into an insurance-based practice, since overhead scales per patient.

Ideally, you want a small panel of patients who can pay high fees for ongoing, intensive care. This kind of referral is not straightforward to get regardless of who you are.

There are other reasons. I know someone who's able to acquire patients quickly, but they had a major suicide event in their practice, it became too much for them (lawsuits, PR, etc). They effectively shut down their clinical operations.

Some people get lots of referrals, but the way they run their practice also ends up generating lots of drop outs/no shows, etc.

There are also people who were doing PP + facilities job, and the PP was not growing fast enough and consuming a lot of their mental space, and they switched back to facilities job full time.

I know one big psychological stressor is that in PP your revenue wildly oscillates. I have managed it so that my practice has grown every single year since I started through fee raises and new patients and the growth of multiple revenue streams, but I still get anxious when I have gaps in revenue. And I frankly don't need the money. This is a huge head game for people, and many don't have the patience and give up quickly, especially when people have lots of student loans, family to support, etc.

 

[dl2dp2]

Perhaps, but some of my colleagues who went the employed route really hate doing the admin work and especially hate/afraid of doing the business work (marketing and networking to get new referrals, building a website, creating practice policies for yourself). Other colleagues got lonely in private practice.

So you are saying that there IS a substantial median total income premium between PP and employed? Maybe. Survey says no. But it is plausible to me that PP underreports in surveys. I know I would. Regardless, the overall premium in my estimate < 100k.

That being said, the top 10% of PP probably make a lot more than the top 10% at facilities (maybe on the order of >200k, I'm guestimating, since let's call it 20-40% margin on a typical psychiatrist, who makes 350k base W2 salary). The main difference is whether the PP psychiatrist can capture his own margin. This data is not really easily available in surveys, which claim that if you make 500k you are two standard deviations above the mean. I think if you are two standard deviations above the mean in PP you likely make much more than 500k.

The much bigger premium is *academic* facilities vs. non-academic anything else.

The other unofficial thing I've noticed is that people in PP work less and have more flexibility. People are like constantly doing yoga and having brunch with friends or picking up their kids at soccer and posting on instagram of their latest trip. Facility-employed people are just burning through RVUs nonstop. Not sure if this is a real effect as many facilities now do 4x10s, etc. but I'm still noticing this as a pattern. PP people who are grinding that I know of are making a *lot* of money. There is also a correlation/causation. PP people who don't grind often are married to someone who makes a lot. If you think about it, PP psychiatry without grinding is like the best job in medicine for someone who's already loaded/has a loaded spouse.

Feeling lonely IMO is a non-issue. You can always do part-time facilities.

 

[dl2dp2]

I've said this before. I love being a psychiatrist. Eventually the revenue from investments will be to the point where I don't need to work as a psychiatrist but I love doing it. I'll just spend some less time doing it for revenue and more time for enjoyment, and spend more time maintaining myself as I get older. E.g. exercise, diet, mental health. etc.

LOL case in my point.

Even the male PPs I know who are 50 are like... brunching constantly and writing a book on existentialism, or doing some weird therapy training workshop thing at a luxury retreat in Tuscon. I kid you not. This is happening weekly on my Instagram.

Very very few facilities people are living a leisurely life like that. People are like moonlighting at ERs on weekends and/or trying to get hired to be C-levels. Just very different life goals.

 

[clozareal]

So you are saying that there IS a substantial median total income premium between PP and employed? Maybe. Survey says no. But it is plausible to me that PP underreports in surveys. I know I would. Regardless, the overall premium in my estimate < 100k.

That being said, the top 10% of PP probably make a lot more than the top 10% at facilities (maybe on the order of >200k, I'm guestimating, since let's call it 20-40% margin on a typical psychiatrist, who makes 350k base W2 salary). The main difference is whether the PP psychiatrist can capture his own margin. This data is not really easily available in surveys, which claim that if you make 500k you are two standard deviations above the mean. I think if you are two standard deviations above the mean in PP you likely make much more than 500k.

The much bigger premium is *academic* facilities vs. non-academic anything else.

The other unofficial thing I've noticed is that people in PP work less and have more flexibility. People are like constantly doing yoga and having brunch with friends or picking up their kids at soccer and posting on instagram of their latest trip. Facility-employed people are just burning through RVUs nonstop. Not sure if this is a real effect as many facilities now do 4x10s, etc. but I'm still noticing this as a pattern. PP people who are grinding that I know of are making a *lot* of money. There is also a correlation/causation. PP people who don't grind often are married to someone who makes a lot. If you think about it, PP psychiatry without grinding is like the best job in medicine for someone who's already loaded/has a loaded spouse.

Feeling lonely IMO is a non-issue. You can always do part-time facilities.

I'm not saying that there's a difference with exception of a few outlier areas, ESPECIALLY if you factor in all of the time outside of direct patient care in private practice (spending time thinking about and working on the business side of things like accounting/bookkeeping, referral sources, marketing, phone intakes/screens, etc.) much of which is less directly converted to a revenue stream.

For me, the autonomy and control over your schedule, not having to ask others for time off, and being selective with patient intakes is a huge difference between employed vs private practice. I'd rather choose if I want to grind or not and reap those rewards, not be told by my employer I need to hit certain wRVU targets otherwise I would get punished.

 

[dl2dp2]

I'd rather choose if I want to grind or not and reap those rewards, not be told by my employer I need to hit certain wRVU targets otherwise I would get punished.

You are gonna be on Instagram soon when you do another "CME" on "cutting edge nutrition-based psychotherapy" skiing at Breckenridge in January. I swear. Last few weeks the insanity on my socials...

There was a poster who's like I want to surf after making millions by grinding at a facility, and I got called out for being like are you really gonna retire at 45? And I think in my head I was like maybe you should look at your PP colleagues who never grind and still get to surf at 45... hahaha

 

[BiscoDisco]

I agree the income in a PP can fluctuate wildly, particularly in the beginning. For me, my plan is to set a limited number of hours a week and work hard until those are regularly filled. I will do this on top of an inpatient or ER shift job (haven't decided what to do quite yet). I'm thinking I could pretty reasonably get 15 hours filled each week within 6 months. Will ideally do a mix of 1-2 insurances and cash. I will be in a unique niche of psychiatry so I think that will help my cash practice stand out.

With less than half full time schedule, I would imagine renting an office space for a day a week will take care of those who wish to be seen in person, while all the rest can be seen tele. After about a year of ramp up I'm imaging this will bring in an extra 220ishK/year after overhead. Not bad for a few afternoons a week which can be done after my full time inpatient or shift gig.

 

[forchinet121]

That is the main reason. To be more specific, I think if you drop your fees and advertise on Google, anyone can get a lot of patients relatively quickly these days, but this effectively changes your practice from "cash" into an insurance-based practice, since overhead scales per patient.

Ideally, you want a small panel of patients who can pay high fees for ongoing, intensive care. This kind of referral is not straightforward to get regardless of who you are.

There are other reasons. I know someone who's able to acquire patients quickly, but they had a major suicide event in their practice, it became too much for them (lawsuits, PR, etc). They effectively shut down their clinical operations.

Some people get lots of referrals, but the way they run their practice also ends up generating lots of drop outs/no shows, etc.

There are also people who were doing PP + facilities job, and the PP was not growing fast enough and consuming a lot of their mental space, and they switched back to facilities job full time.

I know one big psychological stressor is that in PP your revenue wildly oscillates. I have managed it so that my practice has grown every single year since I started through fee raises and new patients and the growth of multiple revenue streams, but I still get anxious when I have gaps in revenue. And I frankly don't need the money. This is a huge head game for people, and many don't have the patience and give up quickly, especially when people have lots of student loans, family to support, etc.

“Ideally you want a small panel of patients who can pay high fees for intensive care.” This doesn’t really seem ideal for a lot of physicians, this seems like working with the highest risk group in medicine i.e very sick people with money. I imagine you could do well but that seems very stressful compared to the average inpatient/outpatient job working with your average American where the risk of lawsuit is likely much lower.

 

[calvnandhobbs68]

“Ideally you want a small panel of patients who can pay high fees for intensive care.” This doesn’t really seem ideal for a lot of physicians, this seems like working with the highest risk group in medicine i.e very sick people with money. I imagine you could do well but that seems very stressful compared to the average inpatient/outpatient job working with your average American where the risk of lawsuit is likely much lower.

Well no what this ends up being is like a psychodynamic practice where you end up holding onto people for long periods of time who want to come in fairly frequently (once a week). An analytic practice would be even fewer patients, since analysis is more like multiple times a week. We can debate the utility of this but that's what these practices usually end up looking like, especially in solo practice, if you're looking for a small panel of people. If you're paying for this cash pay then yes, you're dealing with people with a lot of disposable income but not necessarily people who are that "sick".

 

[calvnandhobbs68]

Do you offer the waived first cancellation or do you wait until they ask you/charge them and refund?

I'll automatically waive it a lot of the time if it's a late cancel. No show is auto charge unless decided otherwise later.

 

[dl2dp2]

“Ideally you want a small panel of patients who can pay high fees for intensive care.” This doesn’t really seem ideal for a lot of physicians, this seems like working with the highest risk group in medicine i.e very sick people with money. I imagine you could do well but that seems very stressful compared to the average inpatient/outpatient job working with your average American where the risk of lawsuit is likely much lower.

Not really. By small panel, I mean like 40ish patients a week, once a month = 40 * 4 = 160 patients.
~200 patients I see monthly. How much do you want to charge them each visit?

You are also doing math wrong. The risk of lawsuit scales by NEW patient engagement, rather than number of visits. Typical outpatient panel at a facility is 500-1000 pts. You barely remember them. Typical inpatient is worse, as they do at least 1-2 admits per day, so there's turnover of 200 patients a year. Risk of lawsuits are higher for inpatient/ER physicians by far. This is well documented. Risk of lawsuit has to do with bad OUTCOME, not the resources of the patient or the necessity of intensity of treatment (i.e. personality disordered patients need to see you more frequently, but that does not necessarily indicate a high lawsuit risk. Many PD patients are low functioning but not suicidal.)

 

[dl2dp2]

Well no what this ends up being is like a psychodynamic practice where you end up holding onto people for long periods of time who want to come in fairly frequently (once a week). An analytic practice would be even fewer patients, since analysis is more like multiple times a week. We can debate the utility of this but that's what these practices usually end up looking like, especially in solo practice, if you're looking for a small panel of people. If you're paying for this cash pay then yes, you're dealing with people with a lot of disposable income but not necessarily people who are that "sick".

This is fairly rare, IMO. Yes there are well-known examples of this on the coasts, but I think most established cash practices have some weeklys but predominantly monthlys. Many MANY people would be willing to pay $X per month for good care, and I think it's less challenging than the above.

 

[G Sheb]

LOL case in my point.

Even the male PPs I know who are 50 are like... brunching constantly and writing a book on existentialism, or doing some weird therapy training workshop thing at a luxury retreat in Tuscon. I kid you not. This is happening weekly on my Instagram.

Very very few facilities people are living a leisurely life like that. People are like moonlighting at ERs on weekends and/or trying to get hired to be C-levels. Just very different life goals.

I agree but PP isn't the only way.
You can find part time gigs that pay upwards of 200K or even 300K and live like that. Life is all about priorities.
Frankly this isn't even hard to do, and might be easier with a 1099 facility job rather than a PP. And you can live like this at 35.
Better yet, do telepsych part time outside the US with the fraction of the living costs in the US. You can live VERY comfortably on a few thousands euros in many places in Europe.

As for analysis, lol, I wouldn't go that path to earn money. Analysis has been dying a slow death these last 2 decades. Most analytic centers are desperate and the rep isn't getting better. Analysis is really a money loser. Very few patients will pay premium 500$+ for a single session, several times a week. So you actually have to drop your fees if you want to run a mostly analytic practice. Those who are doing this do it because they love analysis.

These threads are really silly and tiresome. A few people hit the "jackpot" and earn 600K+ in PP, but they are doing this full time.
A full time practice isn't exactly a walk in the park. (or even a part time one for that matter)
There's a lot of responsibility that comes with handling a 'small' 200 patient panel who are paying cash.

 

[whopper]

Since this was being asked I'll add input on my no show fee policy.

New patients got to pay a $100 deposit upfront. You don't get seen unless you put the money in.

New patient doesn't show up we keep the $100. Then they got to pay another $100 if they want to be considered again as a new patient.

There's a $100 no show fee. We allow people off if they can prove they were in an emergency. Proving means paperwork such as a police report, medical records, etc. I also allow people off if they've never missed an appointment before and have a real bad SOB story that I know is true, or they've been reliable patients for years, but I don't make the latter known cause then the no-shows won't want to pay.

We also have a waiting list of patients, so if a no-show occurs, most of the time we can fill up someone in that spot the same day, still get the no show fee and still have that time slot filled.

I will strongly consider terminating a patient with too many missed appointments even if they paid all their no show fees. There's also a type of patient who frequently misses appointments but is low-drama and we can often times fill the gap anyway. In those types of cases I'll tell the patient in a non-judgmental manner, "you will still have to pay no show fees but I recommend we figure out something where you can avoid them in the first place." Also, and no joking, someone missing a lot of appointments is a sign of possible ADHD.

I hate saying it but it's true. If you have a no show fee aside that you'll have a lot less missed appointments the people who do come in treat you with more respect. Who are they going to respect more? The doctor that they know takes time seriously or the one they can treat like crap? I do good work, and want patients that respect me and take their treatment seriously. I've told this to my patients. I don't mind if they're sick. I don't mind if they've done something inappropriate while manic. I do mind, while they're not manic or psychotic, inappropriate rude behavior that is not fair against me or my staff members. I've told manic patients who've screamed in my waiting room I knew it was their mania. If said patient wasn't in mania and was inappropriate due to something within their control that's where I tell the patient they keep it up they're terminated.

 

[psyguru]

So you are saying that there IS a substantial median total income premium between PP and employed? Maybe. Survey says no. But it is plausible to me that PP underreports in surveys. I know I would. Regardless, the overall premium in my estimate < 100k.

That being said, the top 10% of PP probably make a lot more than the top 10% at facilities (maybe on the order of >200k, I'm guestimating, since let's call it 20-40% margin on a typical psychiatrist, who makes 350k base W2 salary). The main difference is whether the PP psychiatrist can capture his own margin. This data is not really easily available in surveys, which claim that if you make 500k you are two standard deviations above the mean. I think if you are two standard deviations above the mean in PP you likely make much more than 500k.

The much bigger premium is *academic* facilities vs. non-academic anything else.

The other unofficial thing I've noticed is that people in PP work less and have more flexibility. People are like constantly doing yoga and having brunch with friends or picking up their kids at soccer and posting on instagram of their latest trip. Facility-employed people are just burning through RVUs nonstop. Not sure if this is a real effect as many facilities now do 4x10s, etc. but I'm still noticing this as a pattern. PP people who are grinding that I know of are making a *lot* of money. There is also a correlation/causation. PP people who don't grind often are married to someone who makes a lot. If you think about it, PP psychiatry without grinding is like the best job in medicine for someone who's already loaded/has a loaded spouse.

Feeling lonely IMO is a non-issue. You can always do part-time facilities.

I think there is even more flexibility with an expert witness practice. Except for a scheduled IME or testimony (only a few times a week), there is 100% flexibility. Of course I have a few clinical days.

 

[forchinet121]

Most psychiatrists in private practice are making between 600-800k a year.

Why are you still on this forum you’re clearly a troll

 

[Psychresy]

30 99214's a day * 4.5 days a week * 46 weeks a year * .75 (25% overhead) = 815k, assuming $175 per 99214

Why are you assuming 100% collections, and no intakes, and only 214s, and no no shows, and higher 214 reimbursement than what's found elsewhere in your calculations? What do you know that I don't?

Also how do you manage a panel size of 600+ patients? Who's answering messages or phones or dealing with other patient issues?

And 30 214s a day. How many hours per day are you assuming you're going to be at work? I suspect it's more than you are accounting for.

 

[ObsequiousAplomb]

30 99214's a day * 4.5 days a week * 46 weeks a year * .75 (25% overhead) = 815k, assuming $175 per 99214

The only accurate number in this formula is 46 weeks a year, and even that is optimistic.

 

[Psychresy]

Why are you still on this forum you’re clearly a troll

Because he's a troll. And because we keep responding to his trolling.

We're psychiatrists, we should know better than to reinforce his behavior lol.

 

[Mad Jack]

Why can't some just not make it work? Not able to get patients?

Getting patients is easy. Dealing with the headaches of always being on call, running a business, staying price competitive enough that you are picked over insurance-taking psychiatrists, etc is enough to make it not worth the hassle for many when you can be clocking in and out and not worrying about anything after hours. There's also the aspect of picking your clients carefully- if you're doing PP cash, a few excessively entitled or very high needs patients can really make things challenging when you're the whole operation

 

[Mad Jack]

I agree but PP isn't the only way.
You can find part time gigs that pay upwards of 200K or even 300K and live like that. Life is all about priorities.
Frankly this isn't even hard to do, and might be easier with a 1099 facility job rather than a PP. And you can live like this at 35.
Better yet, do telepsych part time outside the US with the fraction of the living costs in the US. You can live VERY comfortably on a few thousands euros in many places in Europe.

As for analysis, lol, I wouldn't go that path to earn money. Analysis has been dying a slow death these last 2 decades. Most analytic centers are desperate and the rep isn't getting better. Analysis is really a money loser. Very few patients will pay premium 500$+ for a single session, several times a week. So you actually have to drop your fees if you want to run a mostly analytic practice. Those who are doing this do it because they love analysis.

These threads are really silly and tiresome. A few people hit the "jackpot" and earn 600K+ in PP, but they are doing this full time.
A full time practice isn't exactly a walk in the park. (or even a part time one for that matter)
There's a lot of responsibility that comes with handling a 'small' 200 patient panel who are paying cash.

The one caveat I would place on the telemedicine comment is that if you are overseas you can only prescribe controlled substances to a patient if you have seen them in-person in the last 24 months and billing Medicare or Medicaid would not be allowed.

 

[Monocles]

I bring in about $450K gross. About 25% gets taken off for overhead. One thing, however, about overhead is a lot of that stuff you can keep so long as you follow the rules. E.g. you buy an office chair, so long as it's in your office for about a year, you can take it home, and then buy another office chair, all charged as a business expense.

So pens, computers, printers, office equipment, cups, furniture, I bought a kick ass gaming monitor, and now it's at home. Cell phones, cell phone coverage, this does, in the end, come to several thousand a year. I bought some original artwork, put it in my office, and then eventually brought it home. I also became friends with the artist who is famous within the fan base he caters to, so that was an added plus. I'm thinking of buying more original artwork but I got a fear one of my kids will ruin it.

I had a side-gig as a medical director but I just got out of it. That brought in about $120K a year. So the time put into that can be reinvested into my office and that'll bring up the revenue about another $60K a year, so the loss isn't that much. On top of it there were goings on at the other place I didn't agree with so I was glad to get out of it.

I have plans in place that could bring my revenue about another $200K a year without me doing much work or sacrificing on the quality. The plan involves having NPs work under me and I'll take up about 10-15% of what they bring in. I've already worked with some of these NPs and they're awesome. The work will come out to likely about 1 hour per week per NP. On top of this I have a revenue stream from investing but since this thread is about a private practice I'll leave this out.

I've said this before. I love being a psychiatrist. Eventually the revenue from investments will be to the point where I don't need to work as a psychiatrist but I love doing it. I'll just spend some less time doing it for revenue and more time for enjoyment, and spend more time maintaining myself as I get older. E.g. exercise, diet, mental health. etc.

Whopper that is awesome! Can I ask how many hours you work each week to bring in that 450k?

(# of new patients, follow ups, etc)

 

[Ludwig2000]

I charge the full fee of the scheduled appointment. Cuts down on no shows significantly

As for salary range it varies from 100k-seven figures in private practice. If you want to hit the high numbers you need to employ therapists/psychiatrists

Serious question: why would a psychiatrist work FOR another psychiatrist?

I can see the potential benefits of partnering with other psychiatrists. And I can see why NPs depending on their state laws want to or have to work for psychiatrists. But one psychiatrist hiring another? I don’t doubt there are reasons I just don’t know what they are.

 

[Sushirolls]

Serious question: why would a psychiatrist work FOR another psychiatrist?

I can see the potential benefits of partnering with other psychiatrists. And I can see why NPs depending on their state laws want to or have to work for psychiatrists. But one psychiatrist hiring another? I don’t doubt there are reasons I just don’t know what they are.

Running a private practice is its own skill/knowledge/experience what have you.
Just like managing CAP, or addictions, or geriatric, or Eating Disorders, etc.
I don't like or want to do CAP, despite the increased marketability, demand, and possible more income. No thanks.

There are lots of people who just don't want to run a practice and simply want to be an employee and told what to do. This is actually more selected for in the med school admission process and reinforced through residency programs...

 

[Stagg737]

Serious question: why would a psychiatrist work FOR another psychiatrist?

I can see the potential benefits of partnering with other psychiatrists. And I can see why NPs depending on their state laws want to or have to work for psychiatrists. But one psychiatrist hiring another? I don’t doubt there are reasons I just don’t know what they are.

The employer would understand that you're being employed to see patients and not deal with the administrative headaches. Working for someone with no clinical training/background who is administration means they likely won't understand that as well. Administrative stuff can be anything from hiring staff to managing the office budget/finances to collecting from insurance to filling out PAs to scheduling to responding to basic/unnecessary questions from patients or all of the above. Working for another psychiatrist means you should be able to come in, see your patients, and go home with minimal to no administrative duties, which is very attractive to a lot of physicians who just want to treat their patients and go home.

 

[dl2dp2]

Serious question: why would a psychiatrist work FOR another psychiatrist?

I can see the potential benefits of partnering with other psychiatrists. And I can see why NPs depending on their state laws want to or have to work for psychiatrists. But one psychiatrist hiring another? I don’t doubt there are reasons I just don’t know what they are.

It's not as straightforward as just purely logistics (i.e. avoiding admin headaches). There are very clear financial incentives as well if the circumstances turn a certain way.


I can give an example of a real-life situation from a colleague. Owner of the practice is a psychiatrist. He doesn't want to give away any equity. He only hires people and never gives partnerships. He hires a psychiatrist away from an academic center getting paid 160k a year. She now gets paid 300k a year. However, her caseload is not full on day 1. So initially he loses money on her, approximately 100k in the first year. Gradually, her caseload builds up and she starts to supervise other NPs, which adds value. By the end of the second year, gross margin on her is 200k a year.

So you say oh wow, why would anyone do that? You just totally got exploited!

However, if you do your math correctly, if she started a practice herself, she would lose 160k income + 100k lost on margin in the first year, if she's even as efficient in recruiting as her boss, which is really doubtful. This gets made up by the third year, but she decided to take maternity leave and go part-time in the third year, and quit altogether 4th year to start her own practice.

The practice owner made 200k off her the second year, which generates a gross value of 100k at the start of 3rd year, but only generated 100k margin off her 3rd year. During 4th year, he needed to hire someone to replace her, which cost him 50k to recruit.

To make that 50-100k over the course of 3-4 years, he had a capital investment of over 200k. This is perhaps higher than the S&P (especially at the moment) but not impressively so. He might be better off putting that excess profit from his practice into S&P and call it a day instead of trying to expand his practice. Growth strategies need to be VERY aggressive, shooting for 10x capital returns by the end of 5-10 year cycle.

Do you see what's going on now? Employees can easily take advantage of employers when the market is tight. Noncompetes firm up the employer's position somewhat, but with limits. In the real world, the employer needs to provide genuine value-add to retain employees and grow. This is not easy, especially not in psychiatry. This is why managed care and private equity penetration for our field is much lower.

This "serious question" by the way is pretty deep. There are billions of dollars of capital looking for investing in private medical practices as an alternative to the usual assets. If you can figure out how to persuade other psychiatrists to work for you for the long hall, you can easily become a billionaire. Many online "mental health tech" companies are trying and failing to do this.

 

[Bartelby]

dl2dp2's example is spot-on. Honestly as a psychiatrist I don't have any interest hiring and managing another psychiatrist (even if there is potential to increase revenue). You need to make the deal attractive enough that the psychiatrist will choose you over a big system or private practice, and there will be the constant temptation for them to leave your practice and start their own once they have learned everything you know about running a PP!

But for the hired psychiatrist, it is much like considering any other job. Someone else does the hiring, billing, maintaining an office, maintaining medical records, finding patients, dealing with employee issues, dealing with other unexpected billing issues. You just show up and see patients (which is really what we are trained to do) and collect a straightforward salary or cut of billing. For many people, this is an arrangement that works even if the practice owner ends up making money on them. The question is just whether they feel the practice provides enough value to justify giving up that cut.

 

[Ludwig2000]

Thanks for all the responses. Very helpful and clarifying.
Seems like the moral of the story is that the psychiatrist doing the hiring ends up functioning more and more like a business owner, the more employees he has (naturally). And per dl2dp2’s excellent analysis, for it to make financial sense the owner needs to shoot for many employees. I wonder if at that point there can be much being-a-psychiatrist involved anymore d/t time devoted to admin demands increasing with increasing employees. Maybe still being able to sign off on your own panel of NPs, if you call that being a psychiatrist.
And an open question is- does having been trained as a psychiatrist provide any advantage to being able to get to that level of Psychiatric Business Owner (PBO) that the suits from the private equity world wouldn’t have? Knowing what both the patients and the doctors want from the business? I don’t know.
I’m not gonna do it myself regardless, I just like wondering about stuff. I hate admin demands so I’m more likely to be one of the folks working for the psychiatrist, despite my prior question. S/p the insights I just got from you guys. I’d rather work for a psych doc than a big box.

 

[whopper]

I know psychiatrists that can't do PP. E.g. they have no idea how taxes, billing, hiring, and firing employees works. There are learning curves to this, some of which can be painful if you don't know what you're doing.

E.g. you hire someone, and this depends on the state, there's laws on firing employees too early, firing them and then you got to pay unemployment for possibly months, etc.

This type of doctor shouldn't be doing PP or should be doing it in an office where they're running a lot of it for you and you can then learn it yourself at a relaxed pace.

I've seen PP doctors retire and sell their practice, and some people here on the forum ask about it, and then be told you can just start one yourself. Not entirely that easy. It can take 1-2 years to build up a practice, the retiring physician can act as a mentor, and trust me that selling the practice for $50K is small compared to the lost time and revenue of learning it the hard way while literally have several days where only 1-3 patients show up while you're still building your practice up. Just to give you an example I made less than $200K the first year in private practice but every year thereafter the pay went up another $50K+ a year until it reached an equilibrium to where it is now.

If the private practice doctor is selling their practice and it already comes with awesome staff, already well-run patients, and the cost is less than $75K, I'd consider this a good option. This is a perfect-world scenario. You could be taking over a practice where the prior idiot doctor put everyone on benzos, Ambein, and Thorazine.

 

[Merovinge]

You could be taking over a practice where the prior idiot doctor put everyone on benzos, Ambein, and Thorazine.

In liquid form for self-parenteral administration right? We cannot all afford cardiologists to give us IV meds to sleep.

 

[Stagg737]

Thanks for all the responses. Very helpful and clarifying.
Seems like the moral of the story is that the psychiatrist doing the hiring ends up functioning more and more like a business owner, the more employees he has (naturally). And per dl2dp2’s excellent analysis, for it to make financial sense the owner needs to shoot for many employees. I wonder if at that point there can be much being-a-psychiatrist involved anymore d/t time devoted to admin demands increasing with increasing employees. Maybe still being able to sign off on your own panel of NPs, if you call that being a psychiatrist.
And an open question is- does having been trained as a psychiatrist provide any advantage to being able to get to that level of Psychiatric Business Owner (PBO) that the suits from the private equity world wouldn’t have? Knowing what both the patients and the doctors want from the business? I don’t know.
I’m not gonna do it myself regardless, I just like wondering about stuff. I hate admin demands so I’m more likely to be one of the folks working for the psychiatrist, despite my prior question. S/p the insights I just got from you guys. I’d rather work for a psych doc than a big box.

Sure, but being an owner means developing a balance. I know a couple of psychiatrists who own their practice and still see patients 4 full days per week. They had a fairly large office staff (at least 6-7 people for 3 psychiatrists and 4-5 therapists at the time, probably closer to 9-10) for the size of their practice. Conversely, they could have just had 1-2 office staff but would have had to cut back on clinical time.

It really just depends on how much of the administrative work you want to do yourself vs how much you trust others to do that work for you. The more clinical time you want to have, the more you'll need to delegate administrative duties to others, which comes at a risk as others pointed out.

 

[dl2dp2]

And an open question is- does having been trained as a psychiatrist provide any advantage to being able to get to that level of Psychiatric Business Owner (PBO) that the suits from the private equity world wouldn’t have? Knowing what both the patients and the doctors want from the business? I don’t know.
I’m not gonna do it myself regardless, I just like wondering about stuff. I hate admin demands so I’m more likely to be one of the folks working for the psychiatrist, despite my prior question. S/p the insights I just got from you guys. I’d rather work for a psych doc than a big box.

It's not so black and white. For example, you and a co-resident could start a practice as co-partners. So it's not working FOR a doc but it's definitely not a big box. You could focus on the clinical side (quality improvement, etc) whereas he could focus on the business side (marketing, accounting, tax). These kinds of arrangements are very common in the community. Many practices are partnerships with the assumption of ownership of equity.

Another common arrangement is larger partnerships but multispecialty groups. Kaiser is the most well-known example, but many many others. These are typically much friendlier than a traditional "big box" once you achieve partner status, as excess profit is distributed and there are usually generous benefits. This is like working for a large coop.

Regardless of whether you want to focus on practice or business, it's VERY useful to learn the basics of business finance. What does ownership of a business mean, when you have extra cash you have to park it somewhere. Whether it's real estate, publicly traded stocks (which is just another form of owning a business), equity in a partnership in your practice, or any combination of the above. The main issue of exploitation comes up when people aren't informed and just think that they can do well by working like a drone every day and sign out their notes and put money in their 401k and be done with it. No. Be smarter and learn. The best way to learn PBO is to start a practice. Read white coat investor. Read WSJ. Listen to podcasts. Talk to people. Ask questions. These are elementary things.

Sure, but being an owner means developing a balance. I know a couple of psychiatrists who own their practice and still see patients 4 full days per week. They had a fairly large office staff (at least 6-7 people for 3 psychiatrists and 4-5 therapists at the time, probably closer to 9-10) for the size of their practice. Conversely, they could have just had 1-2 office staff but would have had to cut back on clinical time.

It really just depends on how much of the administrative work you want to do yourself vs how much you trust others to do that work for you. The more clinical time you want to have, the more you'll need to delegate administrative duties to others, which comes at a risk as others pointed out.

I know someone like that. I thought of this person has an informal mentor as he was a few years above me. I called him periodically to get some career feedback. It's very intresting. He's working till 11PM many days of the week and also on weekends. His practice probably makes a lot of money but a lot of the practice revenue is reinvested into various infrastructure costs, like the acquisition of equipment (TMS, ketamine), staff (nurses, NP), and real estate. Obviously, this is one way to do it. It seems very stressful. I decided that our paths have essentially diverged such that his mentorship is of lower value moving forward. He seems unaware of a lot of things going on and made a lot of mistakes which I learned from. One is that he didn't pivot quickly enough.

I'm fairly busy but some days I feel like I barely work. And my business probably ends up having a better cash flow EBITA but much lower valuation (people should understand what this means). Now am I gonna be a bazillionaire when I'm 60 when I finally get to sell my practice to private equity? Probably not.... but hey...I have capital that I can deploy somewhere else that might have higher growth rates.

Don't think of yourself as "I'm a doctor" vs. "i'm a business person". Think in terms of time like an investor. If I put my money in my own practice, what is the return on capital and what's the variance. If I put my money in S&P, what is the return. If I become an angel investor and invest in a growth startup, what is the return. What if I put money into a real estate syndicate, etc. etc. etc.


I can honestly say that starting a practice changed my life. I think that's true for almost everyone who started a practice because once you started a practice, you'll see that a question like "what is the realistic salary for private practice" becomes kind of meaningless. It really gets to very fundamental business questions, like what *is* a "salary", and what *is* "realistic". A lot these popular saying like in Rich Dad Poor Dad, etc. suddenly made sense.

 

[smalltownpsych]

It's not so black and white. For example, you and a co-resident could start a practice as co-partners. So it's not working FOR a doc but it's definitely not a big box. You could focus on the clinical side (quality improvement, etc) whereas he could focus on the business side (marketing, accounting, tax). These kinds of arrangements are very common in the community. Many practices are partnerships with the assumption of ownership of equity.

Another common arrangement is larger partnerships but multispecialty groups. Kaiser is the most well-known example, but many many others. These are typically much friendlier than a traditional "big box" once you achieve partner status, as excess profit is distributed and there are usually generous benefits. This is like working for a large coop.

Regardless of whether you want to focus on practice or business, it's VERY useful to learn the basics of business finance. What does ownership of a business mean, when you have extra cash you have to park it somewhere. Whether it's real estate, publicly traded stocks (which is just another form of owning a business), equity in a partnership in your practice, or any combination of the above. The main issue of exploitation comes up when people aren't informed and just think that they can do well by working like a drone every day and sign out their notes and put money in their 401k and be done with it. No. Be smarter and learn. The best way to learn PBO is to start a practice. Read white coat investor. Read WSJ. Listen to podcasts. Talk to people. Ask questions. These are elementary things.




I know someone like that. I thought of this person has an informal mentor as he was a few years above me. I called him periodically to get some career feedback. It's very intresting. He's working till 11PM many days of the week and also on weekends. His practice probably makes a lot of money but a lot of the practice revenue is reinvested into various infrastructure costs, like the acquisition of equipment (TMS, ketamine), staff (nurses, NP), and real estate. Obviously, this is one way to do it. It seems very stressful. I decided that our paths have essentially diverged such that his mentorship is of lower value moving forward. He seems unaware of a lot of things going on and made a lot of mistakes which I learned from. One is that he didn't pivot quickly enough.

I'm fairly busy but some days I feel like I barely work. And my business probably ends up having a better cash flow EBITA but much lower valuation (people should understand what this means). Now am I gonna be a bazillionaire when I'm 60 when I finally get to sell my practice to private equity? Probably not.... but hey...I have capital that I can deploy somewhere else that might have higher growth rates.

Don't think of yourself as "I'm a doctor" vs. "i'm a business person". Think in terms of time like an investor. If I put my money in my own practice, what is the return on capital and what's the variance. If I put my money in S&P, what is the return. If I become an angel investor and invest in a growth startup, what is the return. What if I put money into a real estate syndicate, etc. etc. etc.


I can honestly say that starting a practice changed my life. I think that's true for almost everyone who started a practice because once you started a practice, you'll see that a question like "what is the realistic salary for private practice" becomes kind of meaningless. It really gets to very fundamental business questions, like what *is* a "salary", and what *is* "realistic". A lot these popular saying like in Rich Dad Poor Dad, etc. suddenly made sense.

Isn’t the high ebidta and low valuation common for a private practice since we also have relatively low overhead and need for capital investments? Makes it relatively easy to start up but also means the valuation is fairly low. I am a little surprised when I see people selling a practice for much money since I got mine up and running for so little. In order to change this I have some plans to buy some property and develop a treatment program. Right now the private equity people are buying these types of programs so that would be my exit strategy. Just need to get more capital to begin this process.

Also, love this discussion because my knowledge of financial aspects of business is relatively limited so this can be quite helpful.

 

[Stagg737]

I know someone like that. I thought of this person has an informal mentor as he was a few years above me. I called him periodically to get some career feedback. It's very intresting. He's working till 11PM many days of the week and also on weekends. His practice probably makes a lot of money but a lot of the practice revenue is reinvested into various infrastructure costs, like the acquisition of equipment (TMS, ketamine), staff (nurses, NP), and real estate. Obviously, this is one way to do it. It seems very stressful. I decided that our paths have essentially diverged such that his mentorship is of lower value moving forward.

Same. I rotated with this person in med school and they were a great mentor at the time. It was my favorite rotation even though I was working more hours than my surgery rotations and I learned a ton. We were also able to look at the books in the PP and see what they were grossing, general costs, and net for the practice and I was able to ask a lot of questions about the administrative side. Looking back it's something I'd never want to do for my career as I know running a practice like that would be way too stressful to me, but I do feel fairly confident that if I wanted to start my own practice I'd at least know the basics from them.

I also agree with your point about being an investor. Time and money are generally limited and looking at both as investments instead of just money is a better way of building wealth, and that "wealth" is not limited to one's monetary or financial state.

I am a little surprised when I see people selling a practice for much money since I got mine up and running for so little.

Plenty of dumb people (even those with professional-level degrees) out there willing to dump money into something they're told will be profitable. In the MH field, you're not really paying to make money off physical assets if you buy a practice (unless there's TMS equipment or something like that), you're paying to take over a patient panel that you can start making consistent money from on day 1 instead of taking months to years to build a panel. Even then there are a lot of potential problems that can arise which would make paying much not worth it.

 

[dl2dp2]

Isn’t the high ebidta and low valuation common for a private practice since we also have relatively low overhead and need for capital investments?

It is common. Much more atypical would be a high-growth high capitalization medical practice like the one I describe.

Makes it relatively easy to start up but also means the valuation is fairly low. I am a little surprised when I see people selling a practice for much money since I got mine up and running for so little.

They don't. Most medical practices sell for 2-5 EBITA at BEST and <1x revenue. So a solo+ (one physician + admin/part time staff) practice that makes 300k a year EBITA might sell for 600k at the end of its career. Is that a lot of money? I don't think so. This is not enough for anyone to retire on. You better make sure you are drawing out a reasonable amount of profit as a dividend/salary for 30 years and investing elsewhere. This kind of plan (plowing excess profit into practice growth) is VERY risky. And this valuation is typical with owners financing to a junior doctor. If you want direct cash out from a PE, the valuation might be even lower, especially in this rising rate environment.

In order to change this I have some plans to buy some property and develop a treatment program. Right now the private equity people are buying these types of programs so that would be my exit strategy. Just need to get more capital to begin this process.

I know this world very well. PEs are buying treatment programs but they lowball a LOT. The deals are really not great. PE aren't dummies and their offers are typically terrible compared to a hospital or another treatment facility looking for a horizontal merger. People who need to sell will sell. People who don't need to sell won't. Either way the return on capital isn't all that great. Tread carefully.

 

[ArdorAyurveda]

@dl2dp2 Thank you so much for talking about these topics related to the economics of the psychiatry market. Is it safe to say that the best way to learn these terms, calculations, and approaches to finance are best learned simply by starting your own private practice?

The older I get, the more I realize that simply reading these things is no replacement for living through them and having to make decisions that ultimately impact your quality of life, vs. back-of-napkin calculations and daydreaming.

What would you recommend to a medical student graduating with ~210k in debt with aspirations for running a solo or solo + one admin staff practice?
Options I'm considering are

• Wait till loans are paid off to begin building practice
• Pursue PSLF and simultaneously start private practice on the side while slowly accumulating 120 qualifying payments?
• Part-time work immediately after residency or so that one has the energy to start the private practice?
• Moonlighting during residency to pay off the loans more quickly, network, and hustle to get a better idea of the psych business landscape locally

I'm partial towards the moonlight during residency and pay off loans early so that I can afford to work part-time once I am an attending and build the practice shortly after finishing fellowship. Planning to do a forensic psych fellowship.

 

[smalltownpsych]

It is common. Much more atypical would be a high-growth high capitalization medical practice like the one I describe.



They don't. Most medical practices sell for 2-5 EBITA at BEST and <1x revenue. So a solo+ (one physician + admin/part time staff) practice that makes 300k a year EBITA might sell for 600k at the end of its career. Is that a lot of money? I don't think so. This is not enough for anyone to retire on. You better make sure you are drawing out a reasonable amount of profit as a dividend/salary for 30 years and investing elsewhere. This kind of plan (plowing excess profit into practice growth) is VERY risky. And this valuation is typical with owners financing to a junior doctor. If you want direct cash out from a PE, the valuation might be even lower, especially in this rising rate environment.


I know this world very well. PEs are buying treatment programs but they lowball a LOT. The deals are really not great. PE aren't dummies and their offers are typically terrible compared to a hospital or another treatment facility looking for a horizontal merger. People who need to sell will sell. People who don't need to sell won't. Either way the return on capital isn't all that great. Tread carefully.

I can’t tread too carefully because of time, but one thing that my last employer did was use the money to buy houses in a profitable market and fund it with treatment dollars. Real estate is one capital investment that seems to do well. I think he bought the property privately and then leased it to his company. I do need to talk to my accountant about that potential strategy as I plan on acquiring a residence next year. I also appreciate the advice to funnel money into other investments outside of the business and now that I am starting to pay back the initial investment and am not going to go broke, got to start looking at that.

 

[forchinet121]

I can’t tread too carefully because of time, but one thing that my last employer did was use the money to buy houses in a profitable market and fund it with treatment dollars. Real estate is one capital investment that seems to do well. I think he bought the property privately and then leased it to his company. I do need to talk to my accountant about that potential strategy as I plan on acquiring a residence next year. I also appreciate the advice to funnel money into other investments outside of the business and now that I am starting to pay back the initial investment and am not going to go broke, got to start looking at that.

He bought rental homes then he leased them to himself? I don’t understand what you mean by that

 

[dl2dp2]

@dl2dp2 Thank you so much for talking about these topics related to the economics of the psychiatry market. Is it safe to say that the best way to learn these terms, calculations, and approaches to finance are best learned simply by starting your own private practice?

The older I get, the more I realize that simply reading these things is no replacement for living through them and having to make decisions that ultimately impact your quality of life, vs. back-of-napkin calculations and daydreaming.

What would you recommend to a medical student graduating with ~210k in debt with aspirations for running a solo or solo + one admin staff practice?
Options I'm considering are

• Wait till loans are paid off to begin building practice
• Pursue PSLF and simultaneously start private practice on the side while slowly accumulating 120 qualifying payments?
• Part-time work immediately after residency or so that one has the energy to start the private practice?
• Moonlighting during residency to pay off the loans more quickly, network, and hustle to get a better idea of the psych business landscape locally

I'm partial towards the moonlight during residency and pay off loans early so that I can afford to work part-time once I am an attending and build the practice shortly after finishing fellowship. Planning to do a forensic psych fellowship.

Yes

There's no right or wrong. Part-time or full-time. It's also not an irreversible set of multiple choices. You can start part-time then go full-time or vice versa. All choices are fine. There are also way too many variables here for me to directly make an assessment. For example, interest rates on your student loan make a big difference. Possibility of capital investment (i.e. are your parents wealthy enough to give you a business loan?) is another question. The market you are in is also a big issue (will you need to live in a house that's 2M or would a 400k house be sufficient?). Can you apply for an SBA loan? Would you want to acquire an existing practice? You need to figure these things out yourself based on a set of principles, then dynamically change strategies as new information comes to light. You also need to make a commitment to work and learn new things all the time by reading textbooks, newspapers and trade publications, talking to people, sometimes taking a class or two or watch youtube videos. I mean, I say things that are vague and sort of self-helpy, but it really truly is what is required if you want to be a successful business owner. It's 100% create your own adventure.

You have to enjoy the adventure, not "what's the realistic salary" lol. You need to have the ambition to control every aspect of your work life.

I can’t tread too carefully because of time, but one thing that my last employer did was use the money to buy houses in a profitable market and fund it with treatment dollars. Real estate is one capital investment that seems to do well. I think he bought the property privately and then leased it to his company. I do need to talk to my accountant about that potential strategy as I plan on acquiring a residence next year. I also appreciate the advice to funnel money into other investments outside of the business and now that I am starting to pay back the initial investment and am not going to go broke, got to start looking at that.

Right, that's very different from reinvesting the excess capital into the practice itself. Again, whether you own the business which then owns real estate vs. whether you own the real estate in a separate business by drawing out the profit is a legal/accounting issue, not an overall financial strategy issue. The main financial strategy is your big picture asset allocation: do you believe that your own business has a higher growth potential/return on capital than some other instrument you might invest?

Tread carefully is different from being slow. You need to be careful yet decisive. Write out the projections on Excel. In a separate column, model out capital return if you invested in the alternative (ETF, real estate). What is the alpha and what is the beta. Then make a decision. Then execute. A lot of physicians don't do any of that work, and just go with their gut, and then realized that they made all kinds of errors years later.

This is not to say that you shouldn't ultimately go with your gut. Your gut helps you evaluate non-financial aspects of decisions, but you need that Excel in front of you THEN you incorporate these aspects. If you don't know how to make that Excel then you should hire someone to go through it with you.