[If you haven’t checked out the new Student Loan Refinance Page, go check it out. I have spent hours of work on it and loaded it with information and good deals].
I thought it would be useful to do NetWorth Updates each quarter. I’ll be doing this at the end of January, April, July, and October each year. [Maybe more often if people like it?] I think this will be helpful to those following along to see exactly how I am doing what I am doing and also for those still in training or fresh out of training to see what this can look like. I am by no means perfect (hint: I have two car loans and reading a bunch of financial blogs daily reminds me of this), but hope to provide transparency so that others can learn from my decisions. I aim for moderate frugality to keep my head and my heart happy, but recognize that I could be living a much more frugal life than I am to accomplish my goals.
As a starting point of discussion, remember that my net worth at the end of fellowship (July 1, 2018) was negative $308,000.
Here we go!
Net Worth = Assets – Debts
Here are my assets and their total amount. Following this first quarterly update, I’ll start to include their percentage growth since last time.
|Asset Class||Investment||Amount 1/27/18|
|Savings (emergency fund)||Cash||$37,000|
|TPP 403B||Vanguard Institutonal Index Fund||$23,078|
|Vanguard Mid-Cap Index Fund||$8,434.94|
|Vanguard Selected Value Fund||$3,801.35|
|Vanguard Small-Cap Index Fund||$4,653.8|
|Vanguard Total International Stock Index Fund||$2,601.66|
|Mrs. TPP 457 (governmental)||NC Large Cap Index Fund (Black Rock)||$1,912.54|
|NC Small/Mid Cap Index Fund (Black Rock)||$1,126.24|
|NC International Index Fund (Black Rock)||$775.59|
|My Back Door Roth||Vanguard Total Stock Market Index Fund||$5,602.21|
|Mrs. TPP Back Door Roth||Vanguard Total Stock Market Index Fund||$5,602.21|
|529 TPP Kid # 1 (Utah)||$1,570|
|529 TPP Kid # 2 (Utah)||$1,065|
|529 TPP Kid # 3 (Utah)||$785|
Some comments on my assets
You may have noticed above that I have no bonds in my funds. I am 100% stocks via low cost index funds. [Teaser: I am sure to catch some flack for this, but have a really interesting post getting published on Physician on Fire at the beginning of March on why I take this approach!]
I count my kids’ 529 plans into my net worth because I intend to help them out with their studies in college (and after if they choose). That said, this is not money that I count towards my retirement goals or totals. However, it is money being saved that I will not have to pay later. Therefore, it is an asset.
I try and keep between 3 and 6 months of necessary spending in an emergency fund (savings), but as this fund grows and starts to approximate the amount I have left in student loans this will likely turn into my “Kick my loans in the teeth when they least expect it” fund (i.e. I’ll pay it off when these two are equal).
Here are my current debts. There are really only four major areas of debt. I do not have any consumer debt or credit card debt.
|Class||Amount of Debt|
|My Car Loan||$42,743|
|Her Car Loan||$28,043|
Some Comments on my Debt
Student loans are by far and away the biggest source of debt for our family. I am attacking these pretty hard by putting $4,000 per month (actually just increased to $5,000 starting this month) towards my student loans. I additionally aim to put an $30,000-40,000 each year into my student loans through bonuses/promotions/side job pay. This will get rid of my original $180,000 in student loans in just two years out from training. Maybe 2 and 1/2 years.
Yes, I have two car loans. Yes, I know this is financially stupid. However, I want to be transparent. I know a lot of financially minded people that love to travel and spend their money on that to make the heart happy. My wife and I take one beach vacation per year and maybe one or two other local trips with one of them being paid for via my academic fund at the hospital while we attend a medical conference. In total, we probably spend <$5,000 per year on trips. When I graduated, I bumped my lifestyle per The 10% Rule and financed a car and a bought golf membership. I expect to pay both cars off early, and don’t recommend to anyone to get a car loan as sound financial advice.
We still live in the same house we bought in medical school back in 2009. So, we are growing equity with each payment. We are not sure if we will sell the house or keep it when we buy our next house (all ears for recommendations in the comments below). We will also not buy our next house until our student loan debt is paid off. This is part of our financial plan.
So, my net worth (Assets – Debts) is a total of (Negative) -$178,751, which is an improvement since July 1st of $129,249. I’ve cut my negative net worth by 42%!
Goals Going Forward
I expect to invest a total of $76,500 (> 25% of AGI) via investment vehicles for retirement (403B + 457 + Backdoor Roth IRAs), an additional $12,600 for my kids 529 plans, $48,000 in scheduled student loan payments, and an additional $30,000-40,000 from bonus pay/incentives and side hustle profits. I’ll additionally be paying off (financially unintelligent, but heart happy) car loans. With this plan, the total amount of net worth change over the next year should amount to $199,100 without any compounded interest taken into account (who knows what the market will do).
At this pace, I should expect to have a zero dollar net worth (and heading towards positive), by 12 months from now. This will be 18 months out from training, even though I started with a net worth of negative $308,000. So, for all of those students graduating or the young medical professional staring debt in the face, it can happen for you! You just have to make a plan and stick with it!
We still intend to give >10% of our take home pay and 25% of the profits from this site towards charity (church, wellness initiatives, friends in need, charity, mission work, etc). This will likely be closer to 15%.
Feel free to lay into me. What do you think? How am I doing? Yes, you can comment on the car and how unintelligent that is 🙂 Leave a comment below!
[Don’t forget: If you haven’t checked out the new Student Loan Refinance Page, go check it out. I have spent hours of work on it and loaded it with information and good deals].