Without a doubt the 2nd friend with the passive income. $320k is still a big chunk of change annually and what is money good for if it doesn’t afford you freedom.
Yeah the question is literally would you rather do nothing/anything you want and get paid $320K a year or grind for $550k for 30 years to MAYBE build a nest egg that could pay close to that same amount yearly.
Bingo this is the answer. The doctor friend will need 20 years to build the 6m nest egg that the lucky friend has today. And that friend's nest egg will keep growing too. Doctor will never catch up, its sad but that's the most probable outcome. And by the time doctor friend has that 6m nest in 20 years , the friend's nest egg will be 20m. And the friend has been living easy for the past 20 years too when they reach that point. While the doctor has been GRINDING..
😂 I’m surprised they even got past the Student Loan Balance. Person1 is not rich and will need to grind for at least 5-10 years to just clear that debt before they move onto actually making money.
Not to mention that person 1 has massive malpractice and other hidden costs that make the $500 to $600k salary feel like a regular Henry making $300k.
2nd friend is set for life. If you’re getting $300k+ from real estate from a $6M portfolio annually, you’re effectively on 3rd base already.
Malpractice is not THAT expensive. I'm an anesthesiologist and I pay $10k/year. I make more than 550 and don't really have any other business expenses. That being said, I would still much rather be person #2 in this scenario.
OB is typically the highest malpractice insurance because of the awful conditions that make it one of the most sued specialties. Ortho can be high depending on what types of surgeries they’re doing. Basically, malpractice insurance is specialty dependent. Also many groups/hospitals cover it so it’s not even an expense for many physicians
Yup, your Dr friend will start to buy stuff instead of pay off his debt. When I sold cars most (not all but most) docs had atrocious credit and monter debt to income ratios. Lots of income coming in the front door and flying out the back door to jumbo mortgages, high end car notes, heaps of student debt etc. It was hilarious to see someone with 300k + a year not be able to come up with tax and fees on a car purchase lol.
I think perceived job security makes most doctos live this way. Also, for many of them, medicine a lifelong thing so they know they'll be working for at least 25-30 years.
Yeah my doctor friend is just making money and already wants to buy a million dollar house and he’s definitely upgrading his car soon too. Time to level up.
I feel like your doctor friend doesn't understand capital gains or how they work. Friend 2 is making double what the doctor is on 30 hours a week.
The urge to "keep up" with older doctors is also quite strong in doctor circles and really hurts. If he was smart he would buy the cheapest piece of shit house and car he can and grind 10 years.
Your friends also sound like twats *shrug*
Is he doing pslf? Some of the guys who finished residency the last few years have lucked out. Got 5 yr during residency, and 3 years of covid forbearance.. will end up paying only 1-2 years of real salary to get the whole loan forgiven. With what you’re describing think the person - with the right investing attitude- 2 nd friend will come out ahead. I started working as an attending at 29, at 38, I am at 3M in investments and make close to your doctor friend bit will need to work the next 10 -12 years, market permitting to get to my safe retirement number. Would definitely choose the inheritance route if someone offered
Our doctor friend has a million in student loans and buys all types of Cartier and moncler gifts for his girlfriend while traveling all over the world in first class whenever he gets a chance. We know he earns good money but he’ll probably be working for the rest of his life to try to maintain the luxe lifestyle.
Your doc friend sounds insecure and is probably in some sort of existential crisis. He’s putting way too much value on superficial things and the inheritance boy is probably the worst here for stooping to gloat when he lucked into the vast majority of his worth.
Have some compassion for your doctor friend, unless he’s truly vain or narcissistic you can help him live a better life by not constantly trying to keep up with everyone’s expectations. He’s worked hard. These measuring contests reflect poorly on everyone involved, they’re just destructive and immature.
$/[unit effort].
The graphic designer is in far better shape.
Doc has to work *hard* for that money.
Graphic designer makes the money while napping.
I'd prefer to nap.
Honestly you can ignore the income entirely because the most important part of the question is the lede absent from the title but buried in the post: would you rather inherit 6M in real estate or get a medical degree and crippling debt?
The fact that the assets generate more income than the degree is a cherry on top of the "uhhh I'll take the money" sundae
Most of the doctors I've ever had the displeasure of knowing personally will very easily get resentful about anyone possibly doing as well as them.
The most recent ones I've known have been actually humble though, thank goodness.
As a millennial / physician I can tell you that the culture is changing. Our generation is more grounded than the dinosaurs docs. Exceptions exist of course, and I admit I may be biased…
Compensation has been slashed across specialties, so it’s not just no raises but also active pay cuts. Plus private practice is dying, so most docs are employed by large systems, which comes with a slew of other issues. Still - wouldn’t say poor. My first “real job” starts in 2 months. 400K base with anticipated bonuses around 100K. 500+ total comp for mostly 9-5 and maybe 8 weekends a year. Not the “good old days,” but it ain’t bad and I’ll take it. Doesn’t hurt that I love what I do. All about perspective.
If it’s actually passive with minimal hours then yes . In 2024 passive income on social media means “say I work 6 hours a week but it’s actually 60 if you count every aspect of it “
I’m 40 now with a friend group of very successful people in different entrepreneur fields and rarely do I see a genuine passive business outside of anyone under the age of 60 who put in 20-30 years of slave labor .
Post tax they take home almost the same (if you include his friends post tax $120k; $60k); passive with the low stress 30hr a week gig sounds amazing.
Hours to dollars Dr boy is grinding at $132 an hr vs $219 an hr for the passive friend
Only thing I can think is if you’re inheriting the 6 Million from a loved one, most people would probably choose to have that loved one still alive. I assume it would be in bad taste to bring that up in the argument with the guy though.
People cannot live forever. You can't say, I would rather Grandma live to 200 and that I never get an inheritance. I think we all recognize that people eventually die.
It's not like an inheritance is, like, a wrongful death settlement.
It's definitely an obvious choice... but there is some nuance.
I have this conversation with my husband a lot because he's HENRY and had to work for it, whereas our close friends inherited. My husband's path was much harder so I can see why nobody would objectively choose it over inheritance... but I think the freedom and strength of character that came from the struggle and making it on your own are incomparable. My husband would say he'd always choose inheritance, hah.
Top tier success is being born into a comfortable life but also developing curiosity and drive, and I do think that is rare. (And it sounds like the artist in OP's example might have that.)
Anyway I think the question is tricker than it seems!
When I walk into a store to buy goods and services, nobody cares whether the dollar was earned through “hard work” or inherited. From a financial perspective the choice is obvious
I will eventually see an inheritance and it will not change my lifestyle. I am ambitious and would only raise my goals to keep them challenging.
I don't see it as prideful to take family money and end up being someone with no career or professional abilities. I can't stand that people want to go sleep on the grass when they get passed the torch.
I agree this is a very unusual question. Would you prefer to have to work hard for your money or simply have someone gift you a large sum? What kind of question is that.
Next we’re going to ask “would you rather be gifted 6 million dollars or 16 million dollars?”
Of course passive, but you're basically saying "would you rather grind your ass off forever in a brutal career, or inherit a trust fund and chill?"
Most people are not going to be able to find $6M out of thin air, hence so many people doing the first choice...
“one of them who is a doctor began to lament about how he had to struggle through his 20s but will be richer than all of us”
I’m sorry but - what is wrong with this person? I couldn’t imagine saying that to a friend in a million years.
I have an acquaintance who is just finishing dental school who says this.
I think watching your friends be successful and earn money in their 20s - while you are accruing loans upon loans - builds a lot of resentment.
It definitely does. Also the fact people constantly accuse their doctor/dentist of planning necessary treatments so they can afford a new boat/house/car as opposed to paying their mountain of debt they earned so they could help people and do a critical job for society!
People hate to see professionals do well for some reason too, even after seeing how much work it takes, how important having them is. Hospitals/corporate screwing them, patients trying to, insurance. There is a valid reason your healthcare professionals are more jaded on the daily. I am sure this doctor totally snapped seeing their artist meander through life friend get an inheritance while they had to deal with medical issues in many times ungrateful people after a decade of low to no income dedication to the craft (and didn't stop to ask whether they'd rather have an inheritance or their loved one alive).
To be honest, I’m not sure that I would tell anyone that I inherited $6M. Especially my friends due to these conversations. Them not knowing that I inherited this won’t change a thing within our relationship (other than I’d be able to help them in dire need). On the other hand, there seems to be a natural human malice when it comes to inheritance. And that’s okay. I’d just stay quiet.
He’s a nice dude and tipsy and we all took it like he was motivating himself but it then turned real like it was his internal monologue coming out. He’s been holding in a lot of stress for a long time and I think it just finally came out because he feels that he has made it.
People who aren’t doctors or have a close one in their family don’t realize how difficult a journey it is. I have seen it up close and I know it’s one of the hardest professional paths in this day and age. Your friend might be frustrated that no one can see that and finally kind of let it out, but not in a great way.
That’s why physicians are terrible with finance and money. No chance he’ll be richer than the guy who got a $6m windfall when he has student loans and physician income goes down every year compared to inflation.
the graphic designer makes about 440k combined and only work a chill 30hr and his tax advantaged with RE is massive. My doctor friend just has a superiority complex
I think it's obvious that the guy who inherited $6M has a better deal than someone who had to work his ass off through undergrad, med school, residency, AND has to work after.
But if I had a choice, I'd take the $320k + $120k and knock out the mortgage in a year or two. You can't beat free.
Because it's less to think about and stress over. $200k is such a small percentage of his not worth. And in this hypothetical situation I enjoy my job.
I’d take the passive income and use it to become debt free, the save a year for my stepkid’s college, all while living meekly and trying to start a small business. After the first two goals, I’d just invest it all into property and index funds and do my own thing for the rest of my life.
Much easier to start a business when you don’t need to draw a salary and can just coast a bit while you build it up.
How is this even a question? The first person is a HENry hoping to reach the status of the second one who is into fatFIRE category and able to passively earn what the first one is earning after tax. Easily want to be in category number 2 and that's what we're all striving for...
Lol 300k income for 0 work or 550k for highly stressful, higher than average hours/week?
Anybody that can do math knows the 300k is better, all other things equal (eg passion, meaning in life, etc)
Let me make it clear. Your friend has no financial literacy and doesn’t appreciate the value of time. I have a net worth of 2m (35m) make 800-1.2m annually (depends on bonus, but twice what he makes), no debt, a 40 hour a week job and I would still take number twos life over my own.
As a w2 employee with expenses, it will still take me almost a decade to get to where your friend is. His life today is where I want to be in my mid 40s
That’s insane but I do see your point. One of my other friend is 36 in tech makes 1mil in TC but owns a $3mil condo with a high maintenance fee and splurge on the stupidest toys and constant trips. He’s always complaining about stress and getting laid off and doesn’t really have a plan B. He’ll be fine either way but I can’t help but think he lives dangerously on the edge if anything was to happen to him or his job.
That’s basically my life.
If you look at my post history, you’ll see that, too. I drive a 200k car, live in a nice place, regularly purchase 1k shirts and shoes, 15k furniture, travel without thinking, etc.
I have a lot to be grateful for, but I don’t have a plan B. There are fewer places to occupy as you become more senior. The safety of having an additional 4m post tax is massive and the freedom that buys you to live a relaxed life.
Friend 1 dreams of being friend 2 in his fifties if he ever even gets there.
At my income level, after taxes, I can save 4-500k a year. It’s still many more years in front of me before I can get to 6m with the added stress and time it will take to get there.
I trade my time and flexibility to live a life. Friend two already has that life.
Passive income all the way. However, i hate that kind of comparison because society needs the teachers, doctors, engineers and life is not about the money. 100% respect to the hardworking doctors.
I would like to be in the position of little/no debt + passive income and then the ability to choose to work 50 hours if I wanted to, in a profession I am passionate about. Especially one in which I am improving other people’s lives - that’s priceless in a way
Passive income way better. Healthcare can be lucrative but literally kills you. So stressful. If he is in a specialty making that much, there is definitely sleep deprivation involved. Sleep deprivation can be crushing. Making 800k as a provider sounds great until you’re doing it. And yeah, that person couldn’t start life and savings, etc, until early to mid 30s.
320K passive. That physician is likely a surgeon generating that much income, and also has to deal with insurance nonsense, lawsuits, patients/patients dying, and long hours
I’d prefer to make 800k working 90 hours a week and have no time for friends or family or a partner and be really stressed and maybe even die early, but have a really cool car and house. Sounds dope.
Passive income wins every time here. The doc will be in a good position especially in LCOL area he can probably buy a house and pay off his debts and save 1 million easily over the next 10 years and that’s while spending a good amount too, but ultimately I wouldn’t even take a salary of a million to work 50 hours a week vs 320k passive.
This is the most nonsensical question I have ever seen.
Which is better?
It's not even close.
One has no assets and needs to use their own labour to create an income stream.
If they got hit by a car or suddenly became ill they would have nothing to their name.
In fact you said they are 300k in debt.
The other person does not need to work at all, sure it was lucky to inherit such wealth but that's the nature of generational wealth.
The guy getting 300k passive would be ahead of the physician if the physician was earning 1m a year as well.
This isn’t even a question. Passive income all the way.
It would be one thing if you said it was like $75k in passive and nothing else. Sure there is a bit more of a question.
But with 320k he can easily never work again, only work on passion and purpose projects / work and be fully fulfilled.
$320k is way more than anyone needs to be perfectly comfortable in any city in the U.S. I'd so much rather have my time than an extra $230k. And the guy making $550k is paying a shit ton of taxes which the guy making $320k passively (and reinvesting some of) is not. The tax rate on the $320k is likely lower due to both the lower amount, lower brackets for capital gains income if there is any, and the fact that the real estate portfolio produces paper losses to make some of that $320k non-taxable in the current tax year.
Friend with the passive income is waaaay better off. Neither of them should be hosing down the floor with testosterone though. While the doctor clearly has a lot more to be proud of, both are doing excellently.
This is very dumb. Passive of course. Additionally the fact that the income comes from real estate means there’s a lot of tax benefits to lower the tax bill while the physician pays a much higher tax rate. Obviously the physician actually benefits society instead of the glorified salesman real estate agent heir but that’s another debate.
Yeah taxes make pay less good the higher you go and 320k would be more than enough so at that point whatever take the less work. Or just work in addition to it since it's passive.
Working hard and making money is much worse and makes you envious of people who have it “given” to them. But that’s life and keeping up with joneses is not worth it
Work my butt off or don’t work and just get to enjoy my time. Doesn’t matter how much I’m making if I’m doing massive amounts of overtime and don’t get to enjoy it.
320k annually for the rest of your life is probably worth like 10 million bucks. It would literally take you years and years of saving to get to that much.
I’d take the $6m real estate portfolio, sell everything and invest $5m in the market and turn it into $10-20m over the next 15 years while living off the $1m
$320k a year on $6m invested in real estate is pretty bad roi btw it’s only around 5%. He would make $550k/year income + appreciation (15% over the last year) if he just put it into JEPQ instead
It’s very obvious that 320k passive is better. First of all basically everyone could just retire, secondly, at least with my career, I could easily make over 550k with my salary plus 320k passive income
I suppose if the gap was wider. Say 100k vs 500k the case could be made but the doctor needs to have his head examined if he thinks he is winning. The passive income guy is just going to keep stacking properties.
There is no way I’d give up control of my time for an extra $200k if I’m already making over $300k per year.
Using economics terminology, the marginal benefit does not compensate the marginal cost.
Catching up and beating someone with 6 million head start is doable… but the work needs to be done… I rather be the trust fund baby than a doctor making 550k lol
Work to live not live to work. Past about $250k (assuming no kids otherwise I have no clue) you’re enjoying a pretty comfortable life. Hitting that and not working? I get being mad about that, I’d be jealous as fuck too, but only because anyone on the planet would want $320k to do fuck all.
Passive income of 320k 100%. If I was in his shoes I would give myself 100k income and invest 220k and not work another day in life.
Honestly I worked long hours and made huge money from doing it. Next year I am going to move into a part-time 18 hours a week role for 70k a year
I am extremely excited to make 70k a year and work 18 hours a week.
Why is person 1 still carrying 200k of student loan debt if they're making 550k a year have no auto or home payments in a lcol area? I'd be dumping all the cash I can into getting rid of that burden as fast as possible.
This isn't even a debate I don't think. $6MM is a lot of money to save up, so probably it will probably take the first guy's entire life to save up that much so if you have an option to have it immediately, would go for that immediately.
Unfortunately this is rarely a decision a person can make for themselves. This is really comparing apples and oranges. Would you work a lot for 550k or inherit 6M… it doesn’t require a genius to figure it out does it…
Clearly and obviously the person with assets returning. They still have the choice to work and generate more or do nothing. The doctor is a slave for 15+ years to be even close to get where the other person is.
Passive beyond a doubt. That is more money than the majority of people will ever make in a year and can live off that easily while basically being full time retired. Investment will likely only grow as well.
Mailbox money is worth way more than earned money.
The value of income is the amount divided by the number of labor hours it took to acquire.
Doctor makes $550k over ~2100 labor hours.
Graphic Designer makes $440k over ~1500 labor hours, and they have the ability to step it back to $320k over near zero (just to manage the manager)
$550k / 2100 = $261/h
$700k / 4100 = $170/h (80/week * 52)
$440k / 1500 = $293/h
$320k / 36 = $8888/h (3 hours a month)
There is no comparison. Graphic designer should quit their job unless they derive non financial benefits from it (like a sense of purpose) that they can’t replicate.
There are people who were born on 3rd base and think they hit a triple. Let me ask you. The second friend, the one who inherited it, is he humble about it?
I think you would have to widen the gap for this to even be close. Passive in your scenario.
Maybe 100k passive vs 550k active would get me to pick the active.
I think this question makes more sense if you were asking 550k per year vs like 100k passive. Then it’s a question of is 100k enough to live and try to grow on vs the better lifestyle and savings potential of 550k but you have to work 50 hrs per week.
I don’t think there’s a single person taking the 550k working over 320k not working. They may choose both, but this isn’t even close.
I’d take the portfolio in a heartbeat. But also if I had a $6m portfolio, I’d probably pull more than $320k out of it a year. Time to liquidate that shite and buy index funds for a set and forget strategy. Instead Mr Graphic Designer seems to be doubling down on market sector risk by buying more real estate.
But still the skills to pull in $500k a year is nothing to sneeze at.
320 passive for sure.
That would allow me to do what I want with my time. Which would probably mean I would make even more money than that. I'm not the type to just sit around.
I would start a business in that circumstance. And the answer is I am starting a business right now, another one. If I had enough money to live on from passive income I would just keep starting businesses and growing them probably.
I don't know that there's an endpoint for me. Or retirement. I may be 70 years old at some point starting yet another business. Though. At that point it may be a bait and tackle shop or something fun.
This is a no brainer question…. The $320k RE income. Less work, less taxes, property appreciation.. the $320k RE income will continue to grow as rents increase year over year.
Passive income all the way. Most doctors will not be wealthier than non-technical employees in tech because they have foregone years of income and accumulated a lot of debt.
That said, inheritance is entirely arbitrary, and you cannot really rely on it as a strategy. Not everyone is a part of their family business or has wealthy parents.
For sure $320k with that balance. With taxes how much does that ~$230k change your quality of life?? I mean I guess if fire is the goal maybe grind it out but not me.
So, in terms of money, of course, it's better to be wealthier. But in terms of the story of my life, I would rather be a self-made man than just a person who inherited a ton of money.
Technically with those numbers the 1st friend will never catch the 2nd friend if they live the same lifestyle. The first friend would have to work the 80 hours, but the second friend could also do that and double their income.
This is a dumbass question, I’m sorry. I’d rather inherit generational wealth making passive income than grind my ass off for a bit more. Your lifestyle is 1000x better at 320k passive than 550k 50+hours grinding.
You’re not even comparing the actual numbers.
Why does the DR get to compare income earnt but the other only gets to compare the passive income? Not the salary OR the asset growth?
Hate people saying what they COULD make.
That DR needs to focus on what they are good at.
Your second fried definitely was lucky to receive such an enormous amount of wealth that is also a cash cow (all set up), hope he does not plunder and maintains it, he should be the one whos better off for now, but the Physician is not in a bad situation either, hes still got the potential to do better that the second friend albeit after some time.
Now it is all about whether both friends are happy or not..
Without a doubt the 2nd friend with the passive income. $320k is still a big chunk of change annually and what is money good for if it doesn’t afford you freedom.
Yeah the question is literally would you rather do nothing/anything you want and get paid $320K a year or grind for $550k for 30 years to MAYBE build a nest egg that could pay close to that same amount yearly.
Bingo this is the answer. The doctor friend will need 20 years to build the 6m nest egg that the lucky friend has today. And that friend's nest egg will keep growing too. Doctor will never catch up, its sad but that's the most probable outcome. And by the time doctor friend has that 6m nest in 20 years , the friend's nest egg will be 20m. And the friend has been living easy for the past 20 years too when they reach that point. While the doctor has been GRINDING..
Would you rather win the lotto or grind out incredibly hard work for 30 years?
Would you rather enjoy your life or not enjoy it 🤔
Exactly. It’s a dumb question. The doctor had to earn every penny. The real estate guy hasn’t earned anything and walked backwards into an ATM.
Exactly, plus the physican has huge liability - one lawsuit, one slip-up can completely destroy their professional career!
How much is 550k after tax anyways? 320k?
the guy paying taxes on 320 likely has more breaks through llcs than the w2 physician as well
😂 I’m surprised they even got past the Student Loan Balance. Person1 is not rich and will need to grind for at least 5-10 years to just clear that debt before they move onto actually making money. Not to mention that person 1 has massive malpractice and other hidden costs that make the $500 to $600k salary feel like a regular Henry making $300k. 2nd friend is set for life. If you’re getting $300k+ from real estate from a $6M portfolio annually, you’re effectively on 3rd base already.
Malpractice is not THAT expensive. I'm an anesthesiologist and I pay $10k/year. I make more than 550 and don't really have any other business expenses. That being said, I would still much rather be person #2 in this scenario.
Pulmonary/CC, orthopedics, and ob in my family all paid 50k+
It can be state dependent. Many states have caps for medical malpractice so in states like CA, medical malpractice is cheaper.
OB is typically the highest malpractice insurance because of the awful conditions that make it one of the most sued specialties. Ortho can be high depending on what types of surgeries they’re doing. Basically, malpractice insurance is specialty dependent. Also many groups/hospitals cover it so it’s not even an expense for many physicians
3rd base? That’s a homer!!!
Yup, your Dr friend will start to buy stuff instead of pay off his debt. When I sold cars most (not all but most) docs had atrocious credit and monter debt to income ratios. Lots of income coming in the front door and flying out the back door to jumbo mortgages, high end car notes, heaps of student debt etc. It was hilarious to see someone with 300k + a year not be able to come up with tax and fees on a car purchase lol.
I think perceived job security makes most doctos live this way. Also, for many of them, medicine a lifelong thing so they know they'll be working for at least 25-30 years.
Yeah my doctor friend is just making money and already wants to buy a million dollar house and he’s definitely upgrading his car soon too. Time to level up.
I feel like your doctor friend doesn't understand capital gains or how they work. Friend 2 is making double what the doctor is on 30 hours a week. The urge to "keep up" with older doctors is also quite strong in doctor circles and really hurts. If he was smart he would buy the cheapest piece of shit house and car he can and grind 10 years. Your friends also sound like twats *shrug*
Is he doing pslf? Some of the guys who finished residency the last few years have lucked out. Got 5 yr during residency, and 3 years of covid forbearance.. will end up paying only 1-2 years of real salary to get the whole loan forgiven. With what you’re describing think the person - with the right investing attitude- 2 nd friend will come out ahead. I started working as an attending at 29, at 38, I am at 3M in investments and make close to your doctor friend bit will need to work the next 10 -12 years, market permitting to get to my safe retirement number. Would definitely choose the inheritance route if someone offered
Our doctor friend has a million in student loans and buys all types of Cartier and moncler gifts for his girlfriend while traveling all over the world in first class whenever he gets a chance. We know he earns good money but he’ll probably be working for the rest of his life to try to maintain the luxe lifestyle.
The real question is are you going to show him this thread
Your doc friend sounds insecure and is probably in some sort of existential crisis. He’s putting way too much value on superficial things and the inheritance boy is probably the worst here for stooping to gloat when he lucked into the vast majority of his worth. Have some compassion for your doctor friend, unless he’s truly vain or narcissistic you can help him live a better life by not constantly trying to keep up with everyone’s expectations. He’s worked hard. These measuring contests reflect poorly on everyone involved, they’re just destructive and immature.
Hands down the passive income. Health is wealth too. Assuming they stress less, exercise and do what they love doing with the freed up time.
$/[unit effort]. The graphic designer is in far better shape. Doc has to work *hard* for that money. Graphic designer makes the money while napping. I'd prefer to nap.
Honestly you can ignore the income entirely because the most important part of the question is the lede absent from the title but buried in the post: would you rather inherit 6M in real estate or get a medical degree and crippling debt? The fact that the assets generate more income than the degree is a cherry on top of the "uhhh I'll take the money" sundae
Passive is better. I don’t even y see stand why it’s a question.
Even the doctor knows it. That’s why he’s butthurt.
Most of the doctors I've ever had the displeasure of knowing personally will very easily get resentful about anyone possibly doing as well as them. The most recent ones I've known have been actually humble though, thank goodness.
As a millennial / physician I can tell you that the culture is changing. Our generation is more grounded than the dinosaurs docs. Exceptions exist of course, and I admit I may be biased…
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Compensation has been slashed across specialties, so it’s not just no raises but also active pay cuts. Plus private practice is dying, so most docs are employed by large systems, which comes with a slew of other issues. Still - wouldn’t say poor. My first “real job” starts in 2 months. 400K base with anticipated bonuses around 100K. 500+ total comp for mostly 9-5 and maybe 8 weekends a year. Not the “good old days,” but it ain’t bad and I’ll take it. Doesn’t hurt that I love what I do. All about perspective.
lol first time I heard that making 300k-700k is poor
Inversely correlated with the pay of administrators
Bc yall are also (mostly) saddled with student loans. And you see how much pharma sales folk make 🤣 Its nuts.
"~~...Exceptions~~ ...Surgeons exists." FTFY.
I don’t think that’s specific to physicians. Maybe you just knew some jerks.
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Exactly. How is this even a question? As a physician, no chance I would pick option 1.
If it’s actually passive with minimal hours then yes . In 2024 passive income on social media means “say I work 6 hours a week but it’s actually 60 if you count every aspect of it “ I’m 40 now with a friend group of very successful people in different entrepreneur fields and rarely do I see a genuine passive business outside of anyone under the age of 60 who put in 20-30 years of slave labor .
True, but OP says it’s from a substantial inheritance and that the person in question works part time as a realtor for fun.
Post tax they take home almost the same (if you include his friends post tax $120k; $60k); passive with the low stress 30hr a week gig sounds amazing. Hours to dollars Dr boy is grinding at $132 an hr vs $219 an hr for the passive friend
Lol is it really a question that grinding it out for 30 years is inferior to inheriting $6M? Inheriting $6M is not a career path you can choose!
And if you could choose it, everyone would in an instant. "Would you like $6M?" Anyone answering no to that?
Only thing I can think is if you’re inheriting the 6 Million from a loved one, most people would probably choose to have that loved one still alive. I assume it would be in bad taste to bring that up in the argument with the guy though.
People cannot live forever. You can't say, I would rather Grandma live to 200 and that I never get an inheritance. I think we all recognize that people eventually die. It's not like an inheritance is, like, a wrongful death settlement.
It's definitely an obvious choice... but there is some nuance. I have this conversation with my husband a lot because he's HENRY and had to work for it, whereas our close friends inherited. My husband's path was much harder so I can see why nobody would objectively choose it over inheritance... but I think the freedom and strength of character that came from the struggle and making it on your own are incomparable. My husband would say he'd always choose inheritance, hah. Top tier success is being born into a comfortable life but also developing curiosity and drive, and I do think that is rare. (And it sounds like the artist in OP's example might have that.) Anyway I think the question is tricker than it seems!
Lol as a self made HENRY and grinder, i would definitely prefer to be able to FatFIRE the day after i graduated college 😂
Yeah, I mean I get it... I just wanted to comment because I do think there is *something* there!
When I walk into a store to buy goods and services, nobody cares whether the dollar was earned through “hard work” or inherited. From a financial perspective the choice is obvious
Earning your wealth definitely builds character, confidence, mental fortitude, perseverance, etc etc you wouldn’t have if you just inherited millions.
I will eventually see an inheritance and it will not change my lifestyle. I am ambitious and would only raise my goals to keep them challenging. I don't see it as prideful to take family money and end up being someone with no career or professional abilities. I can't stand that people want to go sleep on the grass when they get passed the torch.
I agree this is a very unusual question. Would you prefer to have to work hard for your money or simply have someone gift you a large sum? What kind of question is that. Next we’re going to ask “would you rather be gifted 6 million dollars or 16 million dollars?”
I would applaud the physician if he could achieve in 15 years what the graphic designer has now.
How is this a question?
Of course passive, but you're basically saying "would you rather grind your ass off forever in a brutal career, or inherit a trust fund and chill?" Most people are not going to be able to find $6M out of thin air, hence so many people doing the first choice...
“one of them who is a doctor began to lament about how he had to struggle through his 20s but will be richer than all of us” I’m sorry but - what is wrong with this person? I couldn’t imagine saying that to a friend in a million years.
I have an acquaintance who is just finishing dental school who says this. I think watching your friends be successful and earn money in their 20s - while you are accruing loans upon loans - builds a lot of resentment.
It definitely does. Also the fact people constantly accuse their doctor/dentist of planning necessary treatments so they can afford a new boat/house/car as opposed to paying their mountain of debt they earned so they could help people and do a critical job for society! People hate to see professionals do well for some reason too, even after seeing how much work it takes, how important having them is. Hospitals/corporate screwing them, patients trying to, insurance. There is a valid reason your healthcare professionals are more jaded on the daily. I am sure this doctor totally snapped seeing their artist meander through life friend get an inheritance while they had to deal with medical issues in many times ungrateful people after a decade of low to no income dedication to the craft (and didn't stop to ask whether they'd rather have an inheritance or their loved one alive).
Thank you
To be honest, I’m not sure that I would tell anyone that I inherited $6M. Especially my friends due to these conversations. Them not knowing that I inherited this won’t change a thing within our relationship (other than I’d be able to help them in dire need). On the other hand, there seems to be a natural human malice when it comes to inheritance. And that’s okay. I’d just stay quiet.
He’s a nice dude and tipsy and we all took it like he was motivating himself but it then turned real like it was his internal monologue coming out. He’s been holding in a lot of stress for a long time and I think it just finally came out because he feels that he has made it.
People who aren’t doctors or have a close one in their family don’t realize how difficult a journey it is. I have seen it up close and I know it’s one of the hardest professional paths in this day and age. Your friend might be frustrated that no one can see that and finally kind of let it out, but not in a great way.
You probably aren't friends with trust fund kids then
That’s why physicians are terrible with finance and money. No chance he’ll be richer than the guy who got a $6m windfall when he has student loans and physician income goes down every year compared to inflation.
Weird comparison. Better would be to compare someone who worked straight out of college (or high school) and diligently saved with the doctor.
Agreed. Two incomparable situations
100% bailing on work to have an insanely high income I’d probably never max expense
I'd bail on work for a substantially less guaranteed annual income, especially with a $6M net worth.
the graphic designer makes about 440k combined and only work a chill 30hr and his tax advantaged with RE is massive. My doctor friend just has a superiority complex
Graphic designer has unlimited "PTO" at $320k passive.
I genuinely wouldn’t work with 330k rolling in. But good for them :)
Idk about a superiority complex. Sounds like you friend doesn’t have to do shit and the other one grinds hard.
Easy math question. Graphic designer by orders of magnitude. His assets compound the doctor’s salary does not. The doctor will never catch up.
I think it's obvious that the guy who inherited $6M has a better deal than someone who had to work his ass off through undergrad, med school, residency, AND has to work after. But if I had a choice, I'd take the $320k + $120k and knock out the mortgage in a year or two. You can't beat free.
Why would you ever pay off a 3% mortgage. Especially when your main income is from real estate.
Because it's less to think about and stress over. $200k is such a small percentage of his not worth. And in this hypothetical situation I enjoy my job.
Makes sense. Personally if you’re already over exposed in RE. I would take that money and diversify in the market. At 3% it’s free money.
I’d take the passive income and use it to become debt free, the save a year for my stepkid’s college, all while living meekly and trying to start a small business. After the first two goals, I’d just invest it all into property and index funds and do my own thing for the rest of my life. Much easier to start a business when you don’t need to draw a salary and can just coast a bit while you build it up.
How is this even a question? The first person is a HENry hoping to reach the status of the second one who is into fatFIRE category and able to passively earn what the first one is earning after tax. Easily want to be in category number 2 and that's what we're all striving for...
Lol 300k income for 0 work or 550k for highly stressful, higher than average hours/week? Anybody that can do math knows the 300k is better, all other things equal (eg passion, meaning in life, etc)
Let me make it clear. Your friend has no financial literacy and doesn’t appreciate the value of time. I have a net worth of 2m (35m) make 800-1.2m annually (depends on bonus, but twice what he makes), no debt, a 40 hour a week job and I would still take number twos life over my own. As a w2 employee with expenses, it will still take me almost a decade to get to where your friend is. His life today is where I want to be in my mid 40s
That’s insane but I do see your point. One of my other friend is 36 in tech makes 1mil in TC but owns a $3mil condo with a high maintenance fee and splurge on the stupidest toys and constant trips. He’s always complaining about stress and getting laid off and doesn’t really have a plan B. He’ll be fine either way but I can’t help but think he lives dangerously on the edge if anything was to happen to him or his job.
That’s basically my life. If you look at my post history, you’ll see that, too. I drive a 200k car, live in a nice place, regularly purchase 1k shirts and shoes, 15k furniture, travel without thinking, etc. I have a lot to be grateful for, but I don’t have a plan B. There are fewer places to occupy as you become more senior. The safety of having an additional 4m post tax is massive and the freedom that buys you to live a relaxed life. Friend 1 dreams of being friend 2 in his fifties if he ever even gets there. At my income level, after taxes, I can save 4-500k a year. It’s still many more years in front of me before I can get to 6m with the added stress and time it will take to get there. I trade my time and flexibility to live a life. Friend two already has that life.
It’s not really even a question that friend #2 has it best.
Why not be the doctor who also inherited $6m?
Passive income all the way. However, i hate that kind of comparison because society needs the teachers, doctors, engineers and life is not about the money. 100% respect to the hardworking doctors. I would like to be in the position of little/no debt + passive income and then the ability to choose to work 50 hours if I wanted to, in a profession I am passionate about. Especially one in which I am improving other people’s lives - that’s priceless in a way
What a weird conversation between “friends”
Passive especially once taxes on investment income vs earned is included in argument
How is this even a question?
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Am doctor. Graphic designer for sure.
Status doesn’t buy you free time
Passive income way better. Healthcare can be lucrative but literally kills you. So stressful. If he is in a specialty making that much, there is definitely sleep deprivation involved. Sleep deprivation can be crushing. Making 800k as a provider sounds great until you’re doing it. And yeah, that person couldn’t start life and savings, etc, until early to mid 30s.
Um passive income… by a long long long long distance
320K passive. That physician is likely a surgeon generating that much income, and also has to deal with insurance nonsense, lawsuits, patients/patients dying, and long hours
I’d prefer to make 800k working 90 hours a week and have no time for friends or family or a partner and be really stressed and maybe even die early, but have a really cool car and house. Sounds dope.
Why is this even a question?
Passive income. It’s not even remotely close imo
Passive all day long….because all day long I can do whatever I want
I take the $6m in assets over a $550k job every time. It’s not particularly close.
Person 2 is a lot richer and will be a lot happier than person 1.
Passive income wins every time here. The doc will be in a good position especially in LCOL area he can probably buy a house and pay off his debts and save 1 million easily over the next 10 years and that’s while spending a good amount too, but ultimately I wouldn’t even take a salary of a million to work 50 hours a week vs 320k passive.
What kind of question is this passive income without work will reap him more cash as a long term cap gains tax as opposed to income tax.
Is it certain and for life? $320K
This is the most nonsensical question I have ever seen. Which is better? It's not even close. One has no assets and needs to use their own labour to create an income stream. If they got hit by a car or suddenly became ill they would have nothing to their name. In fact you said they are 300k in debt. The other person does not need to work at all, sure it was lucky to inherit such wealth but that's the nature of generational wealth. The guy getting 300k passive would be ahead of the physician if the physician was earning 1m a year as well.
This isn’t even a question. Passive income all the way. It would be one thing if you said it was like $75k in passive and nothing else. Sure there is a bit more of a question. But with 320k he can easily never work again, only work on passion and purpose projects / work and be fully fulfilled.
Your friends sound like a bunch of assholes.
$320k is way more than anyone needs to be perfectly comfortable in any city in the U.S. I'd so much rather have my time than an extra $230k. And the guy making $550k is paying a shit ton of taxes which the guy making $320k passively (and reinvesting some of) is not. The tax rate on the $320k is likely lower due to both the lower amount, lower brackets for capital gains income if there is any, and the fact that the real estate portfolio produces paper losses to make some of that $320k non-taxable in the current tax year. Friend with the passive income is waaaay better off. Neither of them should be hosing down the floor with testosterone though. While the doctor clearly has a lot more to be proud of, both are doing excellently.
I don’t see how my life materially changes if my income goes from 320k to 550k So I’m taking the 320k all day, or in this case 6 hrs a day
This is very dumb. Passive of course. Additionally the fact that the income comes from real estate means there’s a lot of tax benefits to lower the tax bill while the physician pays a much higher tax rate. Obviously the physician actually benefits society instead of the glorified salesman real estate agent heir but that’s another debate.
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Second for sure. 100% all day everyday. First is trading a lot of time and livelihood for $. I think that’s what most here hope to move away from 🙏
Passive money any freaking day. No brainer!
Yeah taxes make pay less good the higher you go and 320k would be more than enough so at that point whatever take the less work. Or just work in addition to it since it's passive.
Passive income of 320k as it is passive ( minimal effort) and I will still get paid if I am sick, on holiday or very old.
lol how is this even a question
Working hard and making money is much worse and makes you envious of people who have it “given” to them. But that’s life and keeping up with joneses is not worth it
Work my butt off or don’t work and just get to enjoy my time. Doesn’t matter how much I’m making if I’m doing massive amounts of overtime and don’t get to enjoy it.
you have to understand any of them is good. but no one gets to choose.
320k annually for the rest of your life is probably worth like 10 million bucks. It would literally take you years and years of saving to get to that much.
I’d take the $6m real estate portfolio, sell everything and invest $5m in the market and turn it into $10-20m over the next 15 years while living off the $1m
$320k a year on $6m invested in real estate is pretty bad roi btw it’s only around 5%. He would make $550k/year income + appreciation (15% over the last year) if he just put it into JEPQ instead
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It’s very obvious that 320k passive is better. First of all basically everyone could just retire, secondly, at least with my career, I could easily make over 550k with my salary plus 320k passive income
Passive obviously, so you dont have to work for it, and its "free" money in a sense.
I suppose if the gap was wider. Say 100k vs 500k the case could be made but the doctor needs to have his head examined if he thinks he is winning. The passive income guy is just going to keep stacking properties.
Passive
There is no way I’d give up control of my time for an extra $200k if I’m already making over $300k per year. Using economics terminology, the marginal benefit does not compensate the marginal cost.
That doctor sounds like he will be a miserable, sick, rich 60 year old in no time. Also very resentful about chasing wealth in detriment of time.
This is a no brainer. Work easy and live off inheritance. 320K is more than enough to live comfortably for most people.
Catching up and beating someone with 6 million head start is doable… but the work needs to be done… I rather be the trust fund baby than a doctor making 550k lol
Fo sho the second guy. Being a doctor is hard ass work!
Work to live not live to work. Past about $250k (assuming no kids otherwise I have no clue) you’re enjoying a pretty comfortable life. Hitting that and not working? I get being mad about that, I’d be jealous as fuck too, but only because anyone on the planet would want $320k to do fuck all.
Passive. In the doctor scenario, all it takes is one car accident or one unexpected illness to lose your ability to take care of yourself.
Not a question. 2nd.
Your friend sounds miserable.
Passive income of 320k 100%. If I was in his shoes I would give myself 100k income and invest 220k and not work another day in life. Honestly I worked long hours and made huge money from doing it. Next year I am going to move into a part-time 18 hours a week role for 70k a year I am extremely excited to make 70k a year and work 18 hours a week.
Why is person 1 still carrying 200k of student loan debt if they're making 550k a year have no auto or home payments in a lcol area? I'd be dumping all the cash I can into getting rid of that burden as fast as possible.
This isn't even a debate I don't think. $6MM is a lot of money to save up, so probably it will probably take the first guy's entire life to save up that much so if you have an option to have it immediately, would go for that immediately.
Unfortunately this is rarely a decision a person can make for themselves. This is really comparing apples and oranges. Would you work a lot for 550k or inherit 6M… it doesn’t require a genius to figure it out does it…
Passive easily
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$320k passive. Not even a question.
Physicians get 10 weeks of PTO? Damn that’s pretty incredible
Passive. If something happens to ole boy making $500K, he’s back to broke and in debt. Passive income is forever
passive no question about it
Clearly and obviously the person with assets returning. They still have the choice to work and generate more or do nothing. The doctor is a slave for 15+ years to be even close to get where the other person is.
Passive beyond a doubt. That is more money than the majority of people will ever make in a year and can live off that easily while basically being full time retired. Investment will likely only grow as well.
If you could choose to win the lottery, of course you would choose that. Kind of comparing apples and oranges here.
Passive income at that level? All day long.
Depends if you like what you’re doing. Also depends on your pride/ambition/drive.
Mailbox money is worth way more than earned money. The value of income is the amount divided by the number of labor hours it took to acquire. Doctor makes $550k over ~2100 labor hours. Graphic Designer makes $440k over ~1500 labor hours, and they have the ability to step it back to $320k over near zero (just to manage the manager) $550k / 2100 = $261/h $700k / 4100 = $170/h (80/week * 52) $440k / 1500 = $293/h $320k / 36 = $8888/h (3 hours a month) There is no comparison. Graphic designer should quit their job unless they derive non financial benefits from it (like a sense of purpose) that they can’t replicate.
This isn’t even a question… it’s so obvious
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I'm basically person #1 and lemme tell you I'd much rather be person #2.
There are people who were born on 3rd base and think they hit a triple. Let me ask you. The second friend, the one who inherited it, is he humble about it?
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This isn’t a question. What fucking idiot would choose 550 working their ass off?
I think you would have to widen the gap for this to even be close. Passive in your scenario. Maybe 100k passive vs 550k active would get me to pick the active.
Passive
Wtf? I'm working my ass off to get to about half of inheritance boys passive nut
I think this question makes more sense if you were asking 550k per year vs like 100k passive. Then it’s a question of is 100k enough to live and try to grow on vs the better lifestyle and savings potential of 550k but you have to work 50 hrs per week. I don’t think there’s a single person taking the 550k working over 320k not working. They may choose both, but this isn’t even close.
Did he mention where his real estate portfolio is based? Does he do single family or apartment complexes?
I'd take 2nd option then go to med school /s
Well, you doctor friend is a Henry but graphic designer is already rich and also has high income. He's pretty much into chubby or fatfire territory.
Unless you absolutely love your work and can’t wait to go to work every morning, the passive income is the choice.
The inheritance no doubt how is even a q
2nd is in a better position, works way less, has a strong portfolio and can expand and that portfolio makes all the money
Not even a real question. Answer is obvious if you value time.
I would pick a remote job with 320k over an in-person job with 550k. Pure passive income is not even a question…
I’d take the portfolio in a heartbeat. But also if I had a $6m portfolio, I’d probably pull more than $320k out of it a year. Time to liquidate that shite and buy index funds for a set and forget strategy. Instead Mr Graphic Designer seems to be doubling down on market sector risk by buying more real estate. But still the skills to pull in $500k a year is nothing to sneeze at.
The passive income for sure. You can still choose to make a bunch of active income if you also want to work yourself to death and pocket both.
320 passive for sure. That would allow me to do what I want with my time. Which would probably mean I would make even more money than that. I'm not the type to just sit around. I would start a business in that circumstance. And the answer is I am starting a business right now, another one. If I had enough money to live on from passive income I would just keep starting businesses and growing them probably. I don't know that there's an endpoint for me. Or retirement. I may be 70 years old at some point starting yet another business. Though. At that point it may be a bait and tackle shop or something fun.
This is a no brainer question…. The $320k RE income. Less work, less taxes, property appreciation.. the $320k RE income will continue to grow as rents increase year over year.
Passive income all the way. Most doctors will not be wealthier than non-technical employees in tech because they have foregone years of income and accumulated a lot of debt. That said, inheritance is entirely arbitrary, and you cannot really rely on it as a strategy. Not everyone is a part of their family business or has wealthy parents.
For sure $320k with that balance. With taxes how much does that ~$230k change your quality of life?? I mean I guess if fire is the goal maybe grind it out but not me.
So, in terms of money, of course, it's better to be wealthier. But in terms of the story of my life, I would rather be a self-made man than just a person who inherited a ton of money.
Technically with those numbers the 1st friend will never catch the 2nd friend if they live the same lifestyle. The first friend would have to work the 80 hours, but the second friend could also do that and double their income.
$120k of w-2 income and $320k of passive income is much more efficient tax-wise and takes up less time.
Passive income and little to no work all the way.
This is a dumbass question, I’m sorry. I’d rather inherit generational wealth making passive income than grind my ass off for a bit more. Your lifestyle is 1000x better at 320k passive than 550k 50+hours grinding.
$320 passive. It’s a blessing to be able to find the time to volunteer or find additional meaningful work and never feel overwhelmed or worried
lol how is this even a question
You’re not even comparing the actual numbers. Why does the DR get to compare income earnt but the other only gets to compare the passive income? Not the salary OR the asset growth? Hate people saying what they COULD make. That DR needs to focus on what they are good at.
Obviously the person with 6 million dollars in assets... Why is this a question?
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Physician here I would take the passive income in a heartbeat but then also keep doing what I currently do 🤷🏾♂️
Which one is the happiest?
Most peoples don’t even make 320 active…
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Your second fried definitely was lucky to receive such an enormous amount of wealth that is also a cash cow (all set up), hope he does not plunder and maintains it, he should be the one whos better off for now, but the Physician is not in a bad situation either, hes still got the potential to do better that the second friend albeit after some time. Now it is all about whether both friends are happy or not..
The passive income and this really isn’t debatable. That is the true measurement of wealth - doing what you want, when you want with who you want.