Populous cities are populous, well, because people want to live there. Whether the appeal comes from greater career opportunities or simply being closer to family, these places have continuously grown over the last few decades.

The growth is seemingly self-sustaining — certain industries and businesses exist because there is a population that desires these services. In return, these businesses require workers, so they attract people to the region. Add nice weather to mix, and these desirable places could even be called Utopia.

Utopia might be a bit of an exaggeration, but isn’t it nice to be the first to experience innovations in our daily lives, whether it be a food delivery service, personal assistant service, or simply a new Broadway musical? Who actually wants to experience the bubble tea craze two decades after it began?

Sounds great, but there are two sides to the coin. Yes, these are certainly amenities, but there is also a lot of compromise in order to enjoy these perks. The reality is that if you aren’t retired or living completely on passive income, you still have to go through the daily grind. That grind in a major city is likely much worse than you realize if you haven’t lived the part.

Take, for instance, New York City. It might even be considered the best city in the world. Most visitors to NYC tend to rave about the energy, the food, and the sights. These visitors aren’t going to know that it’s not cheap finding good housing (apartment brokers take a cut for finding you a rental), the subway schedules are only a rough approximation, and the vast variety of food options will eventually consume your budget (unless you eat at 99-cent pizza for all your meals).

Being a physician in a large city

It is true that a greater population ought to support a greater number of physicians. In reality that is absolutely true. However, there are inherent issues with being a physician in these areas.

Despite a greater demand in more populous areas, our profession is still beholden to insurance companies and managed care organizations that dictate reimbursement and certain practice patterns. There is often a cost of living adjustment (COL) in the reimbursement, but the numbers don’t add up. For instance, an insurer might pay a physician $165 for a level 4 visit in Columbus, OH, and $180 for the same visit in Sunnyvale, CA. Your medical assistant in Columbus earns $18.50 an hour, but in Sunnyvale, he commands $29 per hour. Oh, and by the way, a $350,000 home in Columbus will cost $2 million in Sunnyvale.

There are also many immeasurable factors thrown in the mix, like commute time, the actual cost of living differences, and other like-minded physicians who are competing for the same subset of patients.

The numbers simply don’t add up. That $250,000 salary in Columbus will get you quite a bit further than the $300,000 salary in Sunnyvale, AND it’s a whole lot easier to get. If you’re unlucky, you might only earn $180,000 a year for the first six years of your practice while in Sunnyvale too.

Engineer salaries exposed!

Continuing along the lines of big-city bashing, most physicians practicing full-time are going to have income in the six-figure range. There are plenty of occupations whose compensation is equal to or greater than what a physician can earn in these populated cities. Engineering and tech jobs are the ones that come to mind when you’re looking at areas like the Bay Area, Seattle, Austin, Los Angeles, and NYC.

Highly competent software engineers at successful companies can command base salaries in the $150,000 range. Year-end productivity bonuses could add another 30 percent, and stock options can double the base salary. You might be looking at a total annual compensation package of $350,000 for a 25-year-old!

What is interesting is that the growth potential and tax benefits of stock options could potentially amplify the compensation package substantially for the software engineer. Anyone who’s compensated strictly on a salary and bonus will not realize these perks. Gotta keep up in the rat race.

Whenever there are a large number of people in the same income range living in an area, the housing and service market will adjust to cater to these groups. Those who are on the fringe of the group will be financially stretched. Many physicians in these areas are actually the ones that are financially stretched.

There is still light at the end of the tunnel

It’s also important to be aware that people aren’t actually leaving the large cities en masse. There are still plenty of doctors in these areas, many of whom are likely doing quite well financially. We all have to realize that if physicians aren’t able to afford to live in the HCOL area, then who is?

Just remember that life isn’t a huge race. We face decisions daily, and ultimately make compromises to get ourselves and our families in the best possible situation available. Physicians living in HCOL areas can and actually do retire, but there is no doubt that they face unique lifestyle challenges that their counterparts living elsewhere do not.

Are you stuck in a rat race?

“Smart Money, MD” is an ophthalmologist who blogs at the self-titled site, Smart Money MD.

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