Navigating Finances Through Physician Burnout


By Bill Martin, CFA 

Published June 11, 2024

Expert review by Alfred Atanda, MD

Physician burnout—characterized by physical, mental, and emotional exhaustion as well as depersonalization and low self-efficacy—has been on the rise for several years, bringing with it significant personal and financial consequences for providers.

According to Medscape, nearly half of all physicians report feeling burned out. While administrative and regulatory hurdles as well as the demand of long hours and heavy patient load are major challenges, 38% of providers say that financial factors like insufficient compensation are also among the greatest contributors to workplace burnout. Approximately 15% say that their burnout is so severe they are considering leaving the field altogether.  

In the US healthcare system, physicians are paid for their time—and the more you work, the more you get paid. The main ways to earn income in the fee-for-service model are to see patients, perform procedures, and analyze tests and medical records. This means that the financial consequences of burnout are high, as spending less time at your job or working less efficiently can significantly reduce your earnings. 

Burnout may not be inevitable, but it is common enough that physicians should work to ensure their financial security by diversifying rather than relying solely on a single source of income. By diversifying your ability to generate revenue and provide value, you inherently gain more freedom, flexibility, and autonomy regarding your financial future. 

How to navigate finances to avoid or mitigate burnout

Save (and spend) wisely

Smart spending and saving with thoughtful planning and budgeting can help keep you on track toward your long-term financial goals, even if your source or amount of income changes in the future. Watch out for lifestyle creep—excess spending that can slowly but significantly cut into your budget, especially as your earnings and standard of living increase—and the hedonic treadmill, which may lead you to make purchases that temporarily increase your mood but have a lasting negative impact on your wallet. Always remember that the relationship between spending money on nice things and one’s happiness is only directly proportional up to a certain extent, after which, more money spent actually can result in decreased fulfillment.

Understand the difference between passive and active income

Knowing the difference between active and passive income—and how to maximize the latter—can help boost financial independence. While active income is money you make for the time spent at your job (ie., fee for service), passive income can be generated with relatively little effort, such as through investment earnings and real estate, or on a physician’s own time and preference (if doing side gigs and 1099 work, see below). Passive income can also come from sources that require some upfront work but very little ongoing input, such as creating a course that you can continue to sell or license. 

The only way to increase active income is to spend more time seeing patients or doing procedures, which makes you financially dependent on your job. Passive income, on the other hand, can continue to grow even after you stop working. In the context of burnout, this allows you to supplement your earnings from active working time with income streams that are more flexible and autonomous.

Invest what you can

Investing is a critical aspect of financial wellbeing, whether that’s through contributions to retirement funds or buying real estate (which may have the added benefit of generating both passive income and tax advantages). A team of professional advisors, such as an investment manager and a financial planner, can help you optimize your portfolio while balancing risk and reward.  

Find a side gig

In a 2023 survey, Medscape found that ~40% of physicians earn additional income from a side hustle. Gig work not only increases earnings—physicians with side hustles make an average of $34,000 extra per year—but also provides opportunities for tax optimization, such as reporting deductible expenses to reduce taxable income. Common options for side hustles involve: creating/selling a product, offering a service, or starting a passion project. Some of the most common side gigs for physicians include medical consulting, chart review, moonlighting, and serving as an expert witness as well as non-medical jobs like real estate, consulting, and teaching.  Earned created a guide to help physicians figure out what types of supplemental income best suits them based on their preferences.  


Always remember that burnout is an occupational hazard that’s rooted in systems, but manifests in individual people.  Burnout affects physicians on both a personal and professional level, but you DO have control as to how to mitigate the impact of burnout on your financial independence with careful planning, money management, and attention to your investments. 

The above information is for educational purposes only. Individuals should seek the counsel of a properly licensed professional prior to taking any action. Earned Wealth is an investment adviser and does not provide accounting advice or services.

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