WCI #217: Practicing Medicine in India

This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011. Here is your host, Dr. Jim Dali. This is White Coat Investor podcast number 217 practicing in India. Well, it is June 18th today. We're recording this to run on July 1st and there's a few things you should know. We're coming up on the end of the medical year, right? We're getting to the end here. We're going to have new interns, new residents, new attendings in a couple of weeks. Many of you are finishing up your training. You're getting into that most important year of your financial life. Now's the time to take the bull by the horns, take advantage of your change in status, to reevaluate your whole financial life and really get a handle on things. Over the next few weeks, we're going to have episodes dedicated to what you need to do as a new resident, what you need to do as a new attending. And I hope you take the time to listen to those episodes. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums trying to gain a financial education the way the hobbyists do for a fraction of the price of hiring a professional financial planner. The Fire your financial advisor online course will take you from feeling anxious and having no plan to to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the White Coat Investor can help. Our quote of the day today comes from Henry David Thoreau who said, the man is the richest whose pleasures are the cheapest. And boy, that is awfully true. You know, I say, as somebody who just picked up my boat from the shop, you know what boat stands for? Bring out another thousand. And that certainly is true. It is a hole in the water that you throw money into. I highly recommend against boating. If you are trying to build wealth, that is definitely not a great hobby, financially speaking. Lots of fun, but not a great hobby from a financial perspective. Thanks for what you do. Life's hard and your profession is a difficult one. To do for long periods of time. That's why rates of burnout are so high among doctors and dentists and pharmacists and attorneys and other high paid professionals. Because it's hard work. So thank you for that. We appreciate it. One way we're going to show our appreciation is for the next 12 days from now through July 12th, we're going to give you 10% off all of our online courses. That includes fire your financial advisor. That includes the version of fire your financial advisor that you can use your CME funds to pay for. That's called financial wellness and burnout prevention for medical professionals. It's the entire fire your financial advisor course plus about eight hours of CME qualifying wellness content. Also, if you've already got your written financial plan in place and don't necessarily need fire your financial advisor, we recommend continuing financial education 2021. All of these are 10% off for the next 12 days through July 12th. And if you buy them, we will not only give you that discount, but we will send you one of these sweet WCI T shirts. A WCI T shirt of your choice, whichever one you want. And then you can also be part of the club, you know, show your support for the white coat investor. So the code you need for that is WCI July 10th. That stands for 10% off. WCI July 10th gets you 10% off plus a free T shirt. And you get all the same usual guarantees and warranties. Right? If you only watch a little bit of it and you ask for your money back, it's 100%, no questions asked money back guarantee. So there's no risk. To check it out, go to whitecoatinvestor.teachable.com to see all those courses and check them out. You don't have to take them today, you just gotta buy them today in order to get that discount and your T shirt. So we got a special guest today I'm looking forward to. You may have noticed over the years we've occasionally had docs from other countries that have talked about practicing in other countries and this interview today is along those same lines. So let's get Dr. Raja on the line here and we will talk about practicing in India. Dr. Raja, welcome to the white coat investor podcast.

Happy to be here.

I understand you have a friend that you promised you were going to be on the podcast to not that long ago. What's she going to think about hearing your voice on here?

I don't know. I haven't told her. I'm recording today on a completely unrelated Topic, but manifesting.

All right, so this should be a lot of fun. Well, today we're going to talk about practicing in India. We've had episodes about Venezuela and Australia, and we're probably going to have some about some other countries. We had somebody on from England and it's really easy, I think in a number of countries where people speak English, you know, India and England, Scotland and New Zealand and Australia. This might be hard if we start trying to do it for docs in Mongolia or places like that. But so far, so good. So your background a little bit. Why don't you tell us a little bit about. How about your background and how you know anything about what practicing in India is like.

Okay. So I'm a family physician and I practice in the Dallas area. I have been out of school for about a presidency for about 15 years now. I did med school in India. I have family and friends who still practice there. So even though I was born in India, I was raised in Africa. I grew up in Nigeria part of my life and then went back to India about, I think middle school, stayed there through high school and med school and then came here about 21 years ago, did my residency here at Wayne.

State University and been practicing here in the US Ever since.

Yes, I've never practiced in India, but I know about practice in India.

Yeah. So we're going to talk about that as much as we can today. And I'm sure someone will go, hey, I practiced in India. You should put me on the podcast. But that's okay. We'll. We'll try to keep our information factual. And I think this is really interesting for a lot of docs because they've never seen any other system. They don't know anything about it. But tell us a little bit about the process of becoming a doctor in India.

So I think much like UK and Australia, you can go into med school right. Right out of high school. So it's 12th grade. Take your exams. There's usually an entrance exam that sets up. It's very competitive. It's hard to get into the government medical colleges, which is the preferred. And there used to be like when I did it, it was a combination of your 12th grade marks and then they would also look at your entrance exam marks. I think now it's all entrance exam. But then you get into med school and it's four and a half years of med school and one year of a compulsory internship. It's called a crri. So compulsory residential rotating internship is what it's called where they do Rotations through surgery, medicine, pediatrics, psychiatry, orthopedics, we do all the general. And then once out of that five and a half years you get the degree mbbs, which is Bachelor of Medicine, Bachelor of Surgery and you can register with the state, start practicing as a general practitioner.

And how often do people do that versus do some kind of a postgraduate residency or fellowship training of some kind?

They don't do it very much these days. Back in my, probably my parents time, there were doctors who worked rural with just the mbbs, but not, not anymore. Now almost everyone specializes or super specializes.

Okay, so what's it cost? What's tuition?

So I said government medical colleges are preferred. The tuition is very minimal. I don't remember. I probably, I think my parents paid maybe 10,000 rupees, which is less than, I don't know, maybe $100, $135, something like that in today's money per year. So cost is very, very minimal. And then of course the board and room and stuff like that, books. But there are private medical colleges where you can pay a capitation fee. It's much, much higher. It's about 16 times higher is what Google tells me. There's a lot of private medical colleges also that one can choose to go to if they cannot make it with the merit cut.

Still, even 16 times that cost is a heck of a deal.

Yes. Compared to the U.S. yes.

Yeah, we got people paying 50 to $100,000 a year just in tuition in the U.S. to go to medical school. So if you go to those private medical colleges, do people look down on you or is that frowned upon? Do they look at you and go, ah, you couldn't get into the government colleges?

There's a little bit of that, yes. It's always more. The person who went to the government medical colleges is more brainy. When someone scores very little, very poorly on their exams and then they go into private medical colleges, they're not appreciated as much. But then once they're in practice, no.

One knows, no one knows the difference. So I mean you came out of medical school and you didn't apply or didn't go to anyway any sort of residency in India. Instead you decided you're going to apply to residencies in the U.S. why did you do that? How hard was that? What percentage of your class decided to do that? Tell us about that process.

There's probably a lot like me, but I didn't choose to do that on purpose. I was married to someone who was living here at the time. So I knew that I was going to do a post graduation no matter what, but wherever I lived, I just happened to be in the U.S. so it was, let's do the USMLE and get into residency here.

And do you find that, I mean, what percentage of your class tried to go to the US to practice or tried to go to Great Britain to practice or tried to go to Australia to practice versus stayed in India?

Not a very huge percentage. Most of them are staying back in India. I wanna say maybe like 20%.

Okay, but is there like a huge draw? Do people go, I wanna go to the US and make the big bucks or something like that, or most people perfectly content to make physician wages.

In India, there's always the draw of the Western medicine, the cutting edge and learning. And the books are all from US authors or UK authors. So I think we always have that. And so people are drawn to it either to go train at least and then go back to India, but to live in the US and practice in the US or in the UK or Australia, there's a small percentage, but not everyone. It's not. It has been made so competitive to get into the immigration and everything is hard. So people don't opt for it as much as they used to.

Now, what kind of money do doctors in India earn both during training and after training? What kind of salaries are they paid as residents and then as attendings?

As a trainee, like as an intern, they're probably paid about, you know, I was paid about 2,000 rupees now. I think it's like 20,000 or something like that.

A rupee. 73 rupees to a dollar is the dollar tax rate. So that's nothing. You were paid basically nothing. That's for your. That last year of med school, essentially, right?

Yes.

Okay. And then how about after that year, what do people get paid when they're.

Doing their post graduation? They do get a stipend and it's probably about 30,000.

$30,000 or 30,000 rupees.

30,000 rupees.

Okay. Wow. Remember, divide that by 73. So what does that work out to? I'd have to pull out a calculator. I'm not very good with this particular exchange rate.

It's about like. Yeah, let's say 70,000 is like $1,000.

I get $411. That's your salary as a resident, huh. That seems hard to live on even in India.

See, India is very. You can live on however much there.

You can live on $411, huh?

Yes. I mean, it's not, you know, the cost is not like us. So they can do that. And then once they're out of residency as a new graduate, depending on the specialty, they're probably going to make about 100,000 rupees a month.

A month minimum. So it was 30,000 rupees a month. So 410amonth.

All right, A month, yes, yes.

And then you. We're talking 1500, $2000 a month is what, what attendants are making?

Yes, attendings initially and then once, because they can also do they. Most of them will do private practice. And when we get into the healthcare system, I'll talk a little bit more about that. But so they make a lot more. And then once they become popular and their name is known out, then the sky is the limit. There are people who make like 2 to 3 million a month rupees.

Tell us a little bit about the Indian medical system. Let's talk about what are the differences between it and the US medical system and what are the advantages and disadvantages, the pros and cons. And tell us about it, because the vast majority of the people listening to this podcast have never even visited India, much less practice there. So tell us about the system a little bit.

The system again is there's the free public health care that's available to any Indian citizen and that's broken down into the rural primary health centers. And then there'll be the community health centers that are a little bit bigger and then the district hospitals which are the urban hospitals, which medical colleges are usually attached to the government hospitals, the bigger ones for training and stuff. The primary health centers are usually about maybe 3,000 to 5,000 serving as far as the public health stuff. And then the whole population, probably about 20,000 to 30,000, the rural villages, and it'll be staffed just outpatient primary care. Then if there's deliveries and pediatrics and stuff like that, surgeries that goes on to the community health centers and then the larger centers for more referral basis patients. This is all free. Anyone can go. Mostly the poor and the rural people go middle class and people who can pay will go on to private doctors and there will be same setup. They have outpatient clinics, they have small 30 to 50 bed hospitals. I could own a hospital if I open a practice, open up a hospital, could do that very easily there. And then the larger corporate hospitals also in the big cities. Medical tourism is very popular these days because cost is comparable to, you know, comparing to other developed countries is much less.

What about the language barrier? Now a lot of People in, in the outlying rural areas don't necessarily speak English. I understand there's a lot of, a lot of different languages spoken in the various parts of India. How much trouble does that cause the practitioners when they come into these secondary and tertiary hospitas? Is translation a big deal or not really.

Translation is nothing at all because most of the time we're going to. Every state will, you know, functions by itself. It's not centralized. If I'm going to practice, I'm going to practice in the state that I speak whatever language I speak. And I speak only my mother tongue and English. So outside of my state, India is. It's hard for me to survive. I have to survive with English.

What about the difference between the care you get in the larger cities versus the rural villages? Is there a pretty big difference in the quality of care you receive in India?

Yes, there is. Getting a knee replacement or getting radiotherapy or getting more sophisticated robotic surgeries and things like that. All of that is going to be available only in the big cities. It's not going to filter down to the rural places.

Now there are a lot of doctors of Indian descent in the US in the upper Midwest. It seems like it's half the doctors sometimes. Why do you think that is?

I think there's a few reasons. I think at least this is my opinion. Again, I don't know. But back in the 60s and 70s, I think it was really easy for doctors. There was a need and I think it was very easy for doctors to immigrate. And it was better life, better quality of life, better money, the exchange rate, things like that that they made. They came over here and I think the second generation kids. Education is emphasized in Indian families a lot. And you know, you have to either be a doctor, engineer, lawyer, something like that.

You can do whatever you want as long as a doctor or a lawyer. Yes.

So I think that, you know, there's a lot of us like second generation Indian and maybe probably third generation now people like me. There was a huge it boom. We got married to engineers who were working here. So we ended up coming over here and then doing this. So I think that's part of the reason. And I know that there are a lot of doctors who still go through the process of the USMLE and have that goal, like even when they're studying and come through.

So are doctors in India considered rich?

Yes, they are.

They are. Even though they're making $410 a month as residents and maybe 1,500 to $2,000 a month.

Well, they're making much more.

They're still at the top of the stack over there.

Yes. Compared to the, you know, the common Indian, they are making a lot more. And like I said, most doctors will work both public and private sector and the sky is the limit about how much they can earn hard work and they make money.

Yeah, that's common in a lot of countries with the public sector. What lessons do you think there are there for the us? What should they adopt from the Indian system that might make our system better?

I don't know about adopting, but I think that the fact that a poor person can still get care free and medications free is so much better than I've worked community health and they sometimes are disappointed and people have to pick between food and money. I mean, yeah, food and medication.

Better to have a two tier system than have some people that aren't eligible for any system.

I think that that's good.

How about your family? When you compare notes to doctors in your family that are practicing there, what are the things that you're jealous of that they enjoy and what are they jealous of that you enjoy?

My brother in law is a neurosurgeon. I'm going to use him. I think. Let's go with what he would say. I think this quality of life, the fact that I have my weekends off at least as a primary care physician, the freedom to travel, the pollution, the space, they probably would be envious of that. The help that they get, the domestic help, the easy access, those are things that people over here cannot really afford to do.

Now how do Indian doctors save for retirement?

So if they work for the government, I know that they have pension plans. There's also other insurances like life insurance and stuff that they do. They have bonds most of the time. It's just Indians tend to be frugal. They're frugal, they save. And there's real estate investments, mostly land, agricultural land and real estate tends to be one of the things that they more commonly do. And I know that in my parents generation probably not much, but now more interest in stocks and bonds and mutual funds and equities and stuff like that.

And do they tend to invest in stocks that are in India or do they tend to look for US or European stocks?

They tend to invest in stocks that.

Are in India just because they know the companies well, their household names. Okay, now inflation in India has been significantly higher over the last few decades than here. It's ranged anywhere from 4% to 13%, although our inflation just went up Most recently it was reported out as about 5%. But what lessons can we learn from Indians about how to live in an environment with significant inflation?

I had to think about this one. It's true that inflation has gone up, but I feel like the salaries have also gone up. Like I said, a resident I was paid as an intern, I was paid 2,000 rupees. Now they're paid 20,000 rupees. It's like proportionately the salaries, at least for the people who work in the public sector, it has gone up. And the other thing about India is that you could live on very little or a lot. You know, you could just choose. I could buy a meal for 10 rupees and I could also go into a five star restaurant and blow a thousand rupees on the same kind of meal. So they're very resilient people. Maybe savings go down a little bit, but I don't think that inflation. And inflation is not across the board uniform for everyone. So those who have a little bit, like if the petrol and diesel are more expensive, it doesn't really affect the person who is on bicycling to work every day. So the population is so large that I don't think it affects the same way that it affects us.

Here in the US People have adjusted to it and it sounds like they just get used to maybe their salary's rising faster than they otherwise would and their expenses rising faster than they otherwise would. But it's. But it hasn't been a catastrophe. It doesn't sound like.

No, it hasn't.

Okay, so we can't have a discussion on a financial podcast about India without talking about gold.

Yes.

What is the deal with gold among Indians?

Gold is sentimental, it's cultural, it's auspicious, it's good luck. You know, the women love it. And I think as a security, especially for women who were not working and dependent on their husband's incomes, I think it was just whatever they could hold on to for their own security, financial security. And so I think that's where it started probably. And it's just seen as a good luck thing. And the richer you get, then you don't really care about gold so much. But then I find that for everyone else, like holding onto some gold is prestigious for them. It's a very cultural thing.

Not to mention it typically keeps up with inflation, which probably helps in that respect.

Yes, it does.

What do Indians think about cryptocurrency?

I think there's a lot of interest. I know that the Reserve bank of India does not really approve of it. There's a lot of interest around it, but I don't think that many people know much about it or are so free to invest in it.

So one of the things I've found interesting over the years and I've gotten questions about from docs with family in India or docs in India or they split their time between the two countries. They're always asking me whether they should put money in Indian banks, convert it to rupees and put it in there. Because Indian banks have paid interest rates of 3 to 10%. Right now. That's what they're paying. Right. And I go down to the bank down the street and I make 0.05% or I find a high yield savings account that right now is paying 0.6% or something and I could just put that money in India and make 3%, 7%, whatever. Do you think that's a good idea for a US investor to put money in an Indian bank?

I don't think it's a good idea.

Why not?

Because the dollar currency value always has held strong. And whatever we make in interest is probably not going to. It's not going to make sense.

You think you're losing it in a weakening rupee, A constantly weakening rupee, you lose the extra interest you're making. Would you change your mind? For someone that spends a significant part of their life in India, if you're splitting your time there, you're planning to retire there or something like that, do you think it makes sense to keep some money in rupees?

Yes, I do. I think, let's say I visit. My mom still lives there, my sister lives there. I visit every couple of years or every year I want some money over there so that I don't have to, just for convenience purposes. If I were to retire and spend my time there, I would definitely keep some money there. But it's not going to be for investment purposes.

Keep your money in the US Even if you were living there for the most part now, Indian tax brackets range from 5 to 30%, so that's a little lower than US brackets. What are your thoughts about the Indian tax system?

So this one I had to ask friends who actually file tax over there.

You never had to while you were in med school.

I know I didn't have to. And the thing is, most of India does not pay income tax. Just they don't even fall into the tax brackets. There's very few people I think out of like I think about 2% actually file income tax.

Wow.

So that's a very small number. And the government does not want to be unpopular increasing individual tax, so they don't do that. But what they do is that they make up in almost everything else. All the indirect taxes, commodities and goods and real estate, entertainment and everything else is taxed so that they make up and can run.

So a lot of the money is coming from sales taxes rather than income taxes. Yes, because in the US the actual federal income tax, I think there's something like 47% that don't pay any money into it. They think they do, but they get it all back at the end of the year. If you include the payroll taxes like Social Security tax, it's a far higher percentage. Almost everybody that's working is paying some sort of taxes in the US but only 2% in India. It's a very different system.

It is a very different system.

Do you get the sense that there's a lot of people that should be paying taxes and aren't, that they're cheating or that it's corrupt?

I think it's a more, it's a cash based economy. So like detecting sources is very difficult unless they work for the government, work in institutions and things like that, it's not trackable. So I think that's there. But I also think a vast majority of people probably don't even fall into the brackets that I think you have to make over 6 lakhs, which is 600,000 a year, to even file taxes. So they probably don't even fall into it all right.

Now another thing that often happens, particularly first generation docs, they move here and now they're making the big bucks. They're making 200, 300, $400,000 a year. And they've got all this family in India that's living off, you know, $400 a month or whatever. And they tend to send a lot of money back. What should US docs with family in India know about sending money or moving assets between the two countries back and forth in each direction?

I know, I think that they should know the tax laws, both sides and also the legal implications, especially with assets. Money, not so much, but assets. I want to say someone sending money from India over here, they can send up to 250,000 DOL, but there's still laws over there like if you go over 700,000 per person per year, rupees coming over here, they have to pay a tax 5% or something like that. And same thing from when we send money from here, there's a gift tax Over, I want to say $14,000. So that's there too. So I think it's important to know.

Those things, maybe stay under those limits when you send money.

Stay. Yeah. And then the other thing is I don't think that people who actually make it over here or are that ambitious and all that don't have family that lives on $400 per month.

They're usually a little more, well to do over there.

Yeah, they're usually much. Yeah, they're middle class, probably, or upper middle class.

Interesting. Okay, so let's say somebody wanted to go practice in India, either short term or long term. Let's say you wanted to go practice in India, you went to med school in India, you did residency here, you've now practiced here for years and years. You want to go back to India. How hard would it be for you to go there and practice?

I don't think it's hard because there is a, they do like having American boarded physicians or UK trained physicians that come back. And so finding a job will not be too hard. I already registered once I finished med school with my state, so I have the state medical council registration. I, I think there's a national medical council now that we'd have to just like going to any other country, we would have to look at the requirements and do the paperwork and should be able to get in.

All right. I think we've talked about just about everything I could think of talking about. But you have the year now of 30 or 40,000 high income professionals, mostly doctors. What have we not talked about that they should know?

I mean, I would go with general with this one. First thing is there's a lot, a lot of economic disparity all over the world. Right. So we live in a place where we have the freedom of choice and we have all this education. And so I think that we should appreciate that, for one thing. And the second thing is financial literacy. I started kind of late. So for people who are like me, women especially, especially people of color, women, immigrants, anyone who thinks that that's a disadvantage, they can always start late and still, still do it. Just one step at a time.

Awesome. That's great advice. Well, thank you so much, Dr. Raja, for coming on the White Coat Investor podcast. I think a lot of people will find your story interesting and as well as learning a little bit more about practicing in India. I know I did. I think it's fascinating to learn how medicine works in other parts of the world. And so I appreciate you coming on. Thank you so much for your time.

Thanks for having me.

Well, I thought that was interesting to learn a little bit more about living in India, coming here from India, practicing in India, et cetera. I hope you found that interesting as well. It's a fascinating country. I mean, it's an eighth or sixth of the people on the planet live in India. So obviously there's a lot of different people and opinions and politics as you move from one state to another throughout the country. But you know, it's great to get an introduction to it and learn a little bit more about it. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums trying to gain a financial education the way the hobbyists do. For a fraction of the price of hiring a professional financial planner, the Fire your Financial Advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school or residency, but never was. Fire your Financial Advisor also has a version eligible for CME Credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the White Coat Investor can help. Don't forget about our sale that's running for the next few days. It runs through July 12th. If you sign up for a White Coat Investor online course@whitecoatinvestor.teachable.com and use code WCIJELY10 gives you 10% off and a free T shirt. That includes our Continuing Financial education course. That includes our older courses if you want to listen to those. It also includes our flagship Fire your Financial Advisor, either with or without cme, so be sure to take advantage of that. That runs through July 12th. Thanks to those of you who've left us a five star review and told your friends about the podcast, it really does help spread the word. Our most recent review came in from CC Harmed Said. The number one finance podcast to listen to if you're a professional. As a doctor who is constantly on the move, it is hard for me to always pause and reevaluate my assets. This is a great podcast to listen to on the go and also to give you reassurance in our crazy world. Where is the best place for you to invest your money? Thank you so much for giving back to all the working professionals out there. Thank you for your kind review. Thanks for listening to the podcast. It wouldn't be much of a podcast without listeners, so I appreciate what you do. It's difficult work. If nobody said thank you today, let me be the first thanks for what you do. Keep your head up, your shoulders back. We'll see you next time on the White Coat Investor Podcast. And if you need help before then, we'll see on the forums, the subreddit, the Facebook group, or just shoot me an email editor@whitecoatinvestor.com I'd love to hear from you. Thanks.

My dad, your host, Dr. Dalle, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney, or financial advisor.

So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.

Sam.