U.S. professionals on their way to riches, and beyond
A decade into the practice of medicine, still striving to become "a well-regarded physician-scientist," Robert Glassman concluded that he was not making enough money. So he answered an ad in The New England Journal of Medicine from a business consulting firm hiring doctors.
Today, after moving on to Wall Street as an adviser on medical investments, he is a multimillionaire.
Such routes to great wealth were just opening up to physicians when Glassman was in school, graduating from Harvard College in 1983 and Harvard Medical School four years later. Hoping to achieve breakthroughs in curing cancer, his specialty, he plunged into research, even dreaming of a Nobel Prize, until Wall Street reordered his life.
Just how far he had come from a doctor's traditional upper-middle-class expectations struck home at the 20th reunion of his college class. By then he was working for Merrill Lynch, soon to become a managing director of health care investment banking.
"There were doctors at the reunion - very, very smart people," Glassman recalled in a recent interview. "They went to the top programs, they remained true to their ethics and really had very pure goals. And then they went to the 20th- year reunion and saw that somebody else who was 10 times less smart was making much more money."
The opportunity to become abundantly rich is a recent phenomenon not only in medicine, but in a growing number of other professions and occupations in the United States. In each case, the great majority still earn fairly uniform incomes, usually less than $400,000 a year, government data show. But starting in the 1990s, a significant number began to earn much more, creating two income strata within such occupations.
The divide has emerged as people like Glassman, who is 45, latched onto opportunities within their fields that offered significantly higher incomes. Some lawyers and bankers, for example, collect much larger fees than others in their fields for their work on business deals and cases.
Others have moved to different, higher-paying fields - from academia to Wall Street, for example - and a growing number of entrepreneurs have seen windfalls tied largely to expanding financial markets, which draw on capital from around the world. The latter phenomenon has allowed, say, the owner of a small mail-order business to sell his enterprise for tens of millions of dollars instead of the hundreds of thousands that such a sale might have brought 15 years ago.
Three decades ago, compensation among occupations differed far less than it does today. That growing difference is diverting people from some critical fields, experts say. The American Bar Foundation, a research group, has found in its surveys, for instance, that fewer law school graduates are going into public-interest law or government jobs, and filling all the openings is becoming harder.
Something similar is happening in academia, where new recipients of doctorate degrees migrate from teaching or research to more lucrative fields. Similarly, many business school graduates shun careers as experts in manufacturing or consumer products in favor of much higher pay on Wall Street.
And in medicine, where some specialties now pay far more than others, young doctors often bypass the lower- paying fields. The Medical Group Management Association, for example, says the nation lacks enough doctors in family practice, where the median income last year was $161,000.
"The bigger the prize, the greater the effort that people are making to get it," said Edward Wolff, a New York University economist who studies income and wealth. "That effort is draining people away from more useful work."
What kind of work is most useful is a matter of opinion, of course, but there is no doubt that a new group of the very rich has risen today far above their merely affluent colleagues.
In the United States, one in every 825 households earned at least $2 million last year, nearly double the percentage in 1989, adjusted for inflation, Wolff found in an analysis of U.S. government data. When it comes to wealth, one in every 325 households had a net worth of $10 million or more in 2004, the latest year for which data is available, more than four times as many as in 1989.
Glassman was making $150,000 in 1996 (about $190,000 in today's dollars) as a 35-year-old hematology-oncology specialist. That is when, recently married and with virtually no savings, he made the switch that brought him to management consulting.
He will not say just how much he earns now on Wall Street or what his current net worth is. But compensation experts, among them Alan Johnson Associates, say the annual income of those in his position is easily in the seven figures, and net worth often rises to more than $20 million.
"He is on his way," said Alan Johnson, managing director of the firm, speaking of people on career tracks similar to Glassman's. "He is destined to riches."
Indeed, doctors have become so interested in the business side of medicine that more than 40 medical schools have added, over the last 20 years, an optional fifth year of schooling for those who want to earn an MBA degree as well as an M.D. Some go directly to Wall Street or into health care management without ever practicing medicine.
Glassman still makes hospital rounds two or three days a month, usually on free weekends. Treating patients, he said, is "a wonderful feeling." But he sees his current work as a valuable aspect of medicine as well.
One of his tasks is to evaluate the numerous drugs that start-up companies, particularly in biotechnology, are developing. These companies often turn to firms like Merrill Lynch for an investment or to sponsor an initial public stock offering. Glassman is a critical gatekeeper in this process, evaluating, among other things, whether promising drugs live up to their claims.
What Glassman represents, along with other very rich people interviewed for this article, is the growing number of Americans who acknowledge that they have accumulated, or soon will, more than enough money to live comfortably, even luxuriously, and also enough so that their children, as adults, will then be free to pursue careers "they have a hunger for," as Glassman put it, "and not feel a need to do something just to pay the bills."
Bill Gates and Warren Buffett are held up as models, certainly by Glassman. "They are going to make much greater contributions by having made money and then giving it away than most, almost all, scientists," he said, adding that he is drawn to philanthropy as a means of achieving a meaningful legacy.
"It has to be easier than the chance of becoming a Nobel Prize winner," he said, explaining his decision to give up research, "and I think that goes through the minds of highly educated, high-performing individuals."