Discussion: Medical Education as an Investment

[JackYangman]

I've heard that rich people send their kids to Bond University but I have not heard that many rich kids study medicine. I think it is because medicine is hardworking and it makes honest and respectful medical professionals but it doesn't make people rich. If driving a Ferrari is a symbol of being rich, many upper middle class people can be seen as rich. I don't think that many medicine students would care or should care if they would ever own a Ferrari in life. Tesla is a better choice anyway and it is more environmentally friendly. The best thing is you may get a Tesla for under $60k in the near future

 

[Crow]

I have a feeling we have different definitions of “middle class”

 

[JackYangman]

I have a feeling we have different definitions of “middle class”

That may be true Crow. I'm an old person, and Australia is a much more wealth country than young Australians would think or believe.

According to ABS, average household wealth increased 1.6 per cent (up $6,850) to $441,649 per person in the September 2020 quarter.

 

[ucatboy]

That may be true Crow. I'm an old person, and Australia is a much more wealth country than young Australians would think or believe.

According to ABS, average household wealth increased 1.6 per cent (up $6,850) to $441,649 per person in the September 2020 quarter.

Household wealth ≠ income, just because a family has enough money spread over all their assets (property, super etc.) does NOT mean that that money can be spent on a Ferrari. That's a ridiculous assumption to make.

 

[JL538]

Also I think averages for household wealth and income are misleading since they are skewed upwards by the billionaires, so it is better to look at medians.

 

[Mana]

Indeed - it looks like the median household wealth sits around 60% of the mean household wealth. If you assume that median individual wealth and median household wealth is correlated to mean in the same ratio, then average per person would be only around 260k.


Also, I recently read an article somewhere (heh) which suggests that as wealth increases, their definition of "middle class" also broadens to include them. Perhaps, JackYangman this may relate to you?

 

[JackYangman]

Indeed - it looks like the median household wealth sits around 60% of the mean household wealth. If you assume that median individual wealth and median household wealth is correlated to mean in the same ratio, then average per person would be only around 260k.


Also, I recently read an article somewhere (heh) which suggests that as wealth increases, their definition of "middle class" also broadens to include them. Perhaps, JackYangman this may relate to you?

Agreed. ABS data suggests that median household wealth is about $558,900 in 2017-18. Given that the average household size in Australia is 2.53, the median wealth per Australian is about $220k+.

 

[JackYangman]

Do not worry. Most of those wealth mums and dads own will pass on to your guys

 

[Unluckydude]

Agreed. ABS data suggests that median household wealth is about $558,900 in 2017-18. Given that the average household size in Australia is 2.53, the median wealth per Australian is about $220k+.

$220k isn't that much considering how expensive houses in most capital cities are. A pretty average 3 BR house in a middle-class suburb in Melbourne or Sydney would cost around 1.5 to 2 million dollars.

I've heard that rich people send their kids to Bond University but I have not heard that many rich kids study medicine. I think it is because medicine is hardworking and it makes honest and respectful medical professionals but it doesn't make people rich.

It depends on your definition of "rich kids". I would say medicine is popular among upper middle class and lower upper class kids. But you're right about people from the super wealthy families, they don't study medicine unless they really like it. I guess it's because they have career options that give them enormous power, wealth and influence?

 

[JackYangman]

$220k isn't that much considering how expensive houses in most capital cities are. A pretty average 3 BR house in a middle-class suburb in Melbourne or Sydney would cost around 1.5 to 2 million dollars.

It depends on your definition of "rich kids". I would say medicine is popular among upper middle class and lower upper class kids. But you're right about people from the super wealthy families, they don't study medicine unless they really like it. I guess it's because they have career options that give them enormous power, wealth and influence?

So true! My points are simple and can be summarised as below. 1) do not expect medicine students drive Ferrari to uni; 2) do not choose medicine because you have a dream that you may drive Ferrari one day. There may be exceptions but that would be rare.

 

[Mana]

Do not worry. Most of those wealth mums and dads own will pass on to your guys

That's assuming that a) they have some wealth in the first place and b) that they don't need it for retirement (-> aged care is expensive).

I think this is a pretty myopic statement given that not everyone has parents with wealth to pass down. Are you going to be subsidising some less fortunate children when you retire/pass your inheritance to your kids?

 

[JackYangman]

That's assuming that a) they have some wealth in the first place and b) that they don't need it for retirement (-> aged care is expensive).

I think this is a pretty myopic statement given that not everyone has parents with wealth to pass down. Are you going to be subsidising some less fortunate children when you retire/pass your inheritance to your kids?

I've not found much official data on wealth intergenerational transfers, so I cannot conclude the issue one way or another. If you have the data, please share here.

There are a few online articles suggest that the old Australians may not die poor. Here below are some of those messages.

"A reluctance to spend superannuation savings means many Australians die richer than the day they retire, according to ground-breaking CSIRO research that may help build support to reduce tax breaks on retirement savings.

The average value of ordinary super funds and self-managed funds grow throughout people's lives and decline only modestly after they turn 70, suggesting Australians mainly use the super system to build up their wealth rather than support themselves in retirement."

"Australians are hoarding huge sums in superannuation and investments until they die to pass on a big inheritance to their children sparking fresh calls for a death tax to pay for aged care.

Experts giving evidence at the Royal Commission into Aged Care this week urged Prime Minister Scott Morison to consider changing the incentives to encourage more Australians to actually use their superannuation and assets including the family home to pay for their care."

To answer Crow's question about what defines middle class, I would rather quote ATO on their definitions of Wealthy individual and High wealthy individuals. For the list of Ultra high wealthy individuals, please check Forbes. Wealthy individuals are not middle class people for sure. I reflected on my use of the words "rich" and "upper middle class', and I think I refer rich people to High wealthy individuals and upper middle class people to Wealthy individuals. It's only my opinion, and you don't have to agree with me on that.

ATO:
"We view privately owned and wealthy groups as:

• companies and their associated subsidiaries (often referred to as economic groups) with an annual turnover greater than $10 million, that are not public groups or foreign owned
• resident individuals who, together with their business associates, control net wealth over $5 million"

"High wealth private groups are defined as Australian resident individuals who, together with their associates, control wealth of more than $50 million. "

It turns out that I was wrong on the definitions of "upper middle class" and "rich people", as mentioned above. My apologies.

 

[A1]

and guarantee ... a full scholarship to their MD program.

Can't be too greedy, CSP med students are already getting a 90% scholarship

> The hidden cost of medical student education: an exploratory study - PubMed
"Objective: To examine the cost of medical education at the Sydney Medical School.
Results: The cost of medical education provided by the university, including infrastructure costs was $56250 per student per year in 2010. An additional $34326 worth of teaching per student per year was provided by teachers (hospital doctors) not paid by the university."

That was 11 years ago so now more like $110,000/year while CSP students pay $11k. Now you know why it's crazy competition.