Sure, anyone can get rich if they’re born wealthy, or inherit wealth from someone else (e.g. wealthy parents, rich relatives). One can also get rich winning the lottery, discovering oil on their land, getting lucky at the casinos or races, or in the stock market; although one could also end up poor if in the latter two things do not turn out well. The odds of getting rich are probably very high in the above mentioned examples. With the exception of luck or being fortunate in life, whether a pharmacist can get rich by just being a pharmacist requires further review.
First of all, it depends on the definition of being “rich” – it is relative. For example, a million dollars for one living in California with a $5,000 per month mortgage, a wife or husband at home with three kids attending private school, and a debt of $100,000 at 7% interest owed to the bank will probably not be considered enough money considering the salary will further be reduced by taxes, insurance deductions, retirement, and other needs. The one million dollars will be used up pretty quickly. Of course, one living far away from urban areas such as rural parts of Iowa with a $900 per month mortgage will fare much better considering more of one’s salary will be saved, and taxes may be much lower than California residents. Also, someone paying $900 per month on a home may be considered rich in many other countries where a U.S. dollar is worth a lot of money in their own currency.
Let’s focus on a pharmacist in the United States of America to remove any disparities in the definition of wealth between different countries, and exclude any serendipitous circumstances in life that only a fortunate few will encounter. So then, what is the answer? It depends…meaning yes and no. Take for example a pharmacist in California who may endure one of the most difficult times becoming a millionaire considering the high taxes and real estate in the area. Using the example from the pharmacist in the previous post, this pharmacist earns $136,100 per year, slightly higher than the $122,230 average pharmacist salary earned in 2016 according to the Bureau of Labor Statistics. The pharmacist has a non-working spouse at home, with two children, and also maximizes their retirement contributions. After all other deductions (e.g. insurance, taxes, etc), the pharmacist’s net earnings are roughly $74,361, or $6,197 per month goes to the bank. Of course, these are only estimates, and may be higher or lower depending on the amount and type of deductions counted against the income.
Most people in America would say a million dollars is a lot of money, and therefore, those with a million dollars may be perceived as rich by the average working American. Therefore, we will use one million dollars as our threshold of what is considered rich for now (although this number is probably peanuts from the standpoint of Warren Buffett or Mark Zuckerberg, but we’re looking from the viewpoint of the average American). Simply, one million dollars net worth is when “Assets” minus “Liabilities” equals $1,000,000 or more. For example, if you have a total combined worth of $1,500,000 of cash, stocks, bonds, properties, etc. but have $500,000 in total left on your mortgage, loans, or other debt, your net worth would be $1,000,000.
A goal of $1,000,000 from a net annual income of $74,361 is feasible; however, it will depend a large part on your spending habits. Therefore, sticking to a budget will assist with reaching this goal. The more you spend, the less you will save, making it harder to reach your goal of one million dollars. Spending less usually equals more savings. If you’re starting out after graduation with mounting college loans, high-interest credit card debt, and a family that eats out and spends money on high quality fashion and services, saving money will be difficult on one singular income alone. One way to facilitate saving money would be to avoid eating out frequently at fancy restaurants, staying healthy to avoid expensive hospital bills, living in not-so-posh neighborhoods, avoiding the brand name clothing, sending children to public schools instead of private institutions, or performing a lot of household chores yourself rather than hiring a cleaning service or landscaper. Looking for discounts, or buying used items could also assist with cutting expenses. These are personal choices that every family will have to make. Some consider living in good neighborhoods to attend excellent public schools, attending private schools, sacrificing retirement savings and wealth for the sake of children are worthy investments; however, this post cannot discuss or recommend what one should do with their earnings, but rather assess whether saving a million dollars is possible for a pharmacist. Another way to speed up the goal to a million dollars is to work more (e.g. another job), earn more (e.g. promotion), or the non-working spouse may be able to enter the workforce and help increase the income that comes into their household. Doing well in investing your savings could also help reach the goal a lot sooner. Earning interest on your savings and investments over time by starting early will be valuable to reaching a million dollars.
In another example, a single person with no debt (e.g. college loans, car loans, mortgage), zero savings, a salary of $74,361, and is able to save half of their paycheck(~$3,100 per month) while earning an average interest of 5% a year will be a millionaire in 2034 (~17 years from this year) according to CNN’s millionaire calculator. Therefore, a single person starting out at the age of 26 may be able to be a millionaire by age 43! Although this is highly unlikely considering the unpredictability that life brings such as getting married, having kids, health issues, or going through an expensive divorce.
Therefore, it is entirely possible in one’s lifetime under the right circumstances to get to a million dollars as a pharmacist as long as there is a steady stream of solid income, disciplined spending control, and time for your investments to grow.