It’s time for the soft tissue master’s rebuttal. Let’s contrast that with an intelligent, motivated young lady who dreams of becoming a plastic surgeon. Her name is Gwendolyn, and since I’m trying to be inclusive, her parents are Thai and Nordic and she’s from rural Wisconsin. She knows that medical school is competitive so she devotes her time to studying, being president of her student government, volunteering at the homeless shelter, and shadowing at the hospital. Maybe Gwendolyn saves up $10,000 for college–great, she’s ahead of our plumber so far. Her resume is short but sparkling. She wants an excellent education but knows that you don’t need to go to an Ivy League school to get into medicine, so she springs for something relatively average. Let’s say tuition is $30,000 a year and she works in the summers enough to pay for her other expenses. Her parents are busy splitting time between Bangkok and Sweden and won’t pay for her school. So she gets four years of undergraduate loan debt at around 4.3% interest, and uses the $10,000 she banked in high school to help pay for her first year. Her debt at the end of college is $121,800. She goes into deferment in medical school, so it does not compound but does accrue $5,211 in interest each year (4.3% of the principal).

Medical school time! She is still smart and goes to her state school, so tuition, fees, room, and board average to about $54,000 a year. Unfortunately the interest rate for graduate/professional loans is 6.8%. Again she does not need to make any payments, but she’s working incredibly hard to stay on top of the class and kill Step 1, so she doesn’t make any money, and she accepts and spends all of the loans the government offers her.

She is on the path to her dream as she enters a general surgery residency, a prerequisite for plastic surgery in many programs (there are also expedited 6 year programs, which are, surprise, more competitive!) She is finally making a salary and working her butt off with 70-90 hour weeks on general surgery, which lasts five years. Her attendings think Gwendolyn–now going by Gwen– is smart and hardworking and recommend her for Plastics programs. All her dreams come true when she is accepted into a 3 year plastics program! Party time! More 70-90 hour work weeks follow as she works her way up to chief. Let’s say she even wised up during residency and started maxing out her Roth IRA, which is hard to do while maintaining the lifestyle she is growing into. Her and her co-residents have nice apartments, drive relatively new cars, and eat at the coolest hangouts. Why not? She’s going to be a plastic surgeon–the plastic surgeons in her hometown were millionaires! Still, she works hard to put away the $5,500 a year and has a retirement account of $62,327 when she finishes (same assumptions as above).

*Alternatively she could have paid off some of her loans with this money, in which case her “savings” would not have compounded, and would have “saved” her the interest on her highest interest loans, or 6.8% per year. This would lower her loan debt by $57,464, as opposed to the $62,327 she has invested).

If she is allowed to maintain deferment the whole time (which she will not, deferment on most of her loans would be exhausted in residency), her loans would not capitalize and compound the interest, but they will increase $22,146 each year for a total of $177,168, and when that is combined with her principal, she will have a debt load of $547,396 when she finishes training.

At 34, Gwen’s net worth is -$475,113.

Income: It’s guesswork from here. Various online sources indicate that the average starting salary for a plastic surgeon is $273,000, and the average for those in practice for six years is $382,000. Later in practice, average salaries bounce around between $360,000 and $450,000. Plastic surgeons make a lot of money; among the highest of medical specialties. But they have lifestyles to match. The standard recommendation of saving 10-15% of salary for retirement does not apply, it is more like 20% +. Even if you assume an effective tax rate of 33%, that means our average plastic surgeons can live off of $192,000-$241,000 before student loan payments (estimated at $3,922 per month for 20 years, paying a total of nearly $394,000 in interest). You, meanwhile, have been practicing pipework for 15 years, living off of $79,000 taxed at roughly 25%, less your retirement contribution of $10,000, or $49,250 a year. It sounds like the plastic surgeons are much, much wealthier than our middle class tradesman.

Except at those numbers (10% of income towards student loans, 20% towards retirement), Gwendolyn-err, Gwen–won’t match your net worth until she turns 45, when you both have a net worth hovering in the positive $600,000s, assuming the market stays stable during her prime earning years. She will still have student loans (assuming a 20 year payoff), and less of her savings will be in tax-exempt accounts– even at this point, the plumber’s $650,000 is worth more than Gwen’s. The plumber is also more resilient to ill-timed market swings. There is no 30 year market period in the United States where there wasn’t an average gain of 7%, and you will be saving for retirement for 50 years. If the market has a downturn in your 40s, you will likely recover by your 60s. Gwen’s retirement could be devastated by a bear market in the same timeframe. Either way, most of her retirement will be made by her, not by her money.

In any case, both of you will be fine. Gwen will ultimately be wealthier, unless she ramps up spending in proportion to income, but will need to make much more of her money, as opposed to the plumber who will see most of his investments triple, quadruple, or otherwise increase in preposterous orders of magnitude.

[Concluded in The Plumber and the Plastic Surgeon, Episode III]