I get comments from time to time saying that I don’t need to worry about money: “You see plenty of people, you must have a fancy car, mini mansion and take nice vacations a couple times a year.”
I want to kind of get back to the roots of this blog and talk to a younger demographic for a second about the finances that go into becoming a chiropractor, the numbers that come along with running a practice and how young chiropractors make a living.
I’ve said this before and I will continue to preach it, if you think you are going to become a chiropractor to become rich, I have some news for you. The average American chiropractor makes between $70,000-90,000 a year. Most have to take out student loans in order to finish the degree. I graduated almost 10 years ago now and my loans were close to $180,000. There are stories out there with people in the 250-300K range. There are ways around making very minimal payments but the interest continues to accumulate and if you are looking for income based repayment, I hope you have done your research on the tax implications if you just make minimum payments for the next 20 years.
I’m a huge advocate for being as aggressive as you can, getting the loans paid off as fast as possible and from a bare minimum, you at least own your brain. Kristina and I made some very strategic moves in order to get the loans paid down, waited to start a family, worked relentlessly/obsessively to make extra payments and lived fairly minimal for the first couple years out of school to get them paid off.
Most chiropractors coming out of school end up working for someone for at least a little bit of time, while this is not the rule, some people do start practices right out of school. Associate positions normally pay minimally and normally pad the pockets of the practice owner. Starting a practice is expensive, more loans are probably necessary and the building period to making a profit can take a little while, if at all. If you can keep your overhead to less than 50% you are doing well, but I caution when the bills start rolling in, your bank account never seems to get ahead.
If you think that you will make six figures, drive a luxury car and take a couple of weeks off a year your first couple years out of school, I want to know what you are smoking or what you are doing because I want what you got.
I’m going to preface this with, Nebraska, where I practice has a pretty good situation to practice in. The state association is very well organized and insurance reimbursements are reasonable for the area. Chiropractic schools seem to be putting out more and more chiropractors with no sense of running a business, so unless you know the insurance game and have a little bit of business sense, it can be a rough go starting out.
Just some very simple numbers on a monthly basis: Rent ($1500), Utilities ($200), Software($200), Minimal Salary ($2000), Student Loans ($1000), Bank Loan for Practice ($1500), Advertising ($100), plus you will have random stuff that comes up. Let’s say that you can keep your practice overhead to around $6000-7000 a month which includes paying yourself, at an average visit of $55 a visit, you will need to see roughly 35-50 patients per week to make a bare minimal lifestyle. These numbers will fluctuate greatly, you may hire help, you will pay payroll taxes and other practice related expenses are not included but you get the picture. This doesn’t include saving for retirement, a building, a home or a car.
When someone says you must be rolling in cash because the practice is always busy, the thing that people don’t normally take into consideration ,is the pure cost of running an office, paying people and still having enough meat on the bone so that your own family can survive.
I’m not writing this for a sympathy vote, my wife and I live a fairly comfortable life with two young boys. She works and probably always will, she worked hard for her degree as well and we feel that she should use it. The way the business is structured will actually benefit myself and Kristina in the years to come but it can get tight at times because the ebb and flow of patient visits on a given week or month. We are ten years into practice so the ups and downs are expected but it does make you think a little bit when patients think that you are getting rich off of them.
I chose the chiropractic profession because I knew that I would be able to help people and I could ultimately be my own boss. The sky is the limit, but right now I’m comfortable driving an eleven year old car that is paid off while trying to get ahead in life. Like I said, this is not a sympathy blog but more of a put the numbers into perspective so people can wrap their minds around them.
If you are a young chiropractor with the world at your finger tips, there are a lot of different ways to make the numbers work and I have some good ideas that I keep to myself unless asked about but just know that knowing your numbers is a must, it will be a grind and that if you keep all this in mind, odds are you will be okay in life, not poor, not rich but okay. People will always have more that you, so be comfortable with who you are and own it.
Questions are welcome and we will see everyone in the weeks to come.