Quarterly Net Worth Update: 18 Months Out From Training

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This is the next installment of our Quarterly Net Worth Updates.  To read my previous Net Worth Updates click the following links.

If you don’t feel like clicking through those, our net worth started at negative (-) $208,000.  By six months out, it had improved to (-) $78,819. Then, by 9 months out we were at  (-) $40,270, one year out we finally had a positive net worth  a +$45,000, and at 15 months we had reached >$73,000.

Where are we now?  Read on to find out.

18 Months Out: Net Worth Update Assets

Given that I am no longer anonymous with the release of my book, the details of what is shown below will be changing slightly.

Here are my assets and the dollar amount for each category.  All of this is as of 1/26/19

Asset ClassInvestmentAmount 1/27/19
Emergency Fund3-Months saved in High-Yield Savings~$30,440
TPP 403BVanguard Total Bond Index Fund$1,777
 Vanguard Institutional Index Fund$33,158
 Vanguard Mid-Cap Index Fund$19,933
 Vanguard Small-Cap Index Fund$19,531
 Vanguard Total International Stock Index Fund$13,645
 Mrs. TPP 457 (governmental)NC Fixed Income Index Fund$857
 NC Large Cap Index Fund (Black Rock)$8,748
 NC Small/Mid Cap Index Fund (Black Rock)$6,265
 NC International Index Fund (Black Rock)$3,807
Mrs. TPP 401K/403BIndex Fund Allocation$526
My Back Door RothVanguard Total Stock Market Index Fund$7,421
Mrs. TPP Back Door RothVanguard Total Stock Market Index Fund$7,534
529 TPP Kid #1 (Utah) $5,548
529 TPP Kid # 2 (Utah) $2,878
529 TPP Kid # 3 (Utah) $2,149

Home

Equity (Fair Market Value = $455,000)

0
Total Assets
 $164,800

General comments on my assets

The total amount of assets did not change much over the last quarter. One big reason for this is that we sold our house!  That money got applied to the debts as you’ll see below. 

Because of moving, we ate up some of our cash to get the old house ready and buy some needed items for the new house.  Let this be a lesson that buying (and selling) a house is always more expensive than anticipated!

A good rule of thumb is that selling a house is going to cost you 10% of the sale price.  For example, if you sell your house for $200,000, anticipate coming up with $20,000 to sell your house.  If you don’t have 10% equity in your house it is going to COST you money to sell it!

Investment Comments on Assets

Spoiler!  Now that our student loan debt is gone, we are WAY too heavy in stocks.  No more using the guaranteed return of student loans serving as a “Fixed” asset.

This will need to be mitigated with new money coming into our retirement accounts.  I’ll set new asset allocations to place money into the bond index funds we have until we are at 10% bonds for our overall portfolio.

Now that  our student loans are gone, that will free up $5,500 in cash flow each month.  Here is how that will shake out:

  • $2,000 of that is going towards the new mortgage.
  • According to the 10% rule, we will enjoy a small lifestyle creep of $500 per month – likely to be spent on lawn maintenance and cleaning help.
  • Initially, we will be saving the rest of the money to go towards a larger than anticipated tax bill (oops!) and our backdoor Roth IRA for the year.

You can click this link if you need a step-by-step guide to your first Backdoor Roth IRA.

After the backdoor Roth is filled up, we will start designating monthly funds to a taxable account.

Our annual savings goal is $115,000.   Given the tax bill mistake that looks to cost us about $7,000, we are going to have some making up to do.  

Still, we will need to find a way to put $17,000 into our taxable account by the end of the year.  This should be possible.  The remainder of the money will be in tax-advantaged space (401K, 403B, 457, IRA, and HSA).

None of the above numbers counts the anticipated money going into the kids’ 529 accounts that we are using to save for their college education.  Though, if they earn a scholarship, we fully anticipate taking advantage of the 529 hack.

Debts

Here are my family’s current debts.

ClassAmount of Debt
Student LoansNOTHING, NADA, ZIP, ZILCH…. ZERO!!!!
My Car Loan$36,170
Her Car Loan$20,942
Home Mortgage (~454,900) 
  
Total Debt (excluding mortgage)$57,082

Some Comments on my Debt

You read that right!  Our student loan debt is gone.  There will be a whole post tackling how we did this in the next couple of weeks.  The highlight real involved us paying off $200,000 of student loans in 19 months.  The original goal was 24 months.  

I could literally scream that from the top of a mountain!  And, I did… on twitter.  Honestly, with the unanticipated tax bill, we likely should have waited a couple of months to send the check… but I just couldn’t resist!

We still have those pesky car loans.  Hoping to crush those with additional cash flow and my annual bonus that we receive over the next 12 months.

The house is considered a zero sum game given the fair market value and current debt owed.  That said, we took a zero percent physician home loan.  So, if we were forced to sell it would likely cost us 8-10% of our home value to do so (or ~$45,000).

Net Worth  

Net Worth = Assets – Debts

$164,800 – $57,082 = $107,718

Goals / Summary

  • We improved our net worth by $34,355 in the last quarter.
  • Since I finished training (when my net worth was -$208,000), we have improved our position by $315,718 in just 18 months.  That means that over 50% of our gross income has gone towards building wealth during that time frame. I guess I am following Physician on FIRE’s “live on half” challenge.

This should serve as proof that living like a resident after training works if you make a plan and stick with it!

Take Home

We continue to build our net worth regularly and consistently. The vast majority of our dollars go towards this endeavor + 10% to tithing at our church each month.

Finally, we are done with our student loans.  Looking forward to setting up the rest of the plan and continuing to shatter our goals months ahead as our debt (and childcare costs) continue to decline.

Share your awesome financial news!  What goals have you accomplished this year? How did you do it?  Leave a comment below.

TPP

6 thoughts on “Quarterly Net Worth Update: 18 Months Out From Training”

  1. Congrats on the student loan payoff. That is a HUGE achievement and for me set off a chain of events that got me to where I am today when I finally did it (at a far older age than you).

    Tackling the car debt should be your next goal which should rapidly disappear based on what you did with the student loans. Finally if you can pay off the mortgage quickly you can truly feel what it is like to be debt free (spoiler, it’s amazing).

    Congrats on the positive net worth. It is amazing how broke we really are when we first become attendings. Hitting zero net worth is quite an achievement. Now you will see how quickly it will rise as your capital starts pulling its own weight and contributing.

    • Thanks, Xray! We are super excited. We hope to be debt free of everything (except the mortgage) in one more year. So, 2.5 years out from training. That would be great. We also have a savings rate goal. So, I am trying to balance those competing interests.

      Appreciate the support, as always.

  2. You should feel incredibly proud of the loans you’ve slain! That alone should drive hordes to purchase your new book.

    Bold of you to keep sharing details after removing the mask. WCI and PoF discontinued this practice after a while, citing a desire not to attract attention.

    Celebrating your successes,

    CD

    • Thanks, CD. I think after I get to a certain threshold, I’ll probably stop publishing this information, too. For now, I am still in the “awe, that’s cute that he now has a positive net worth” phase. If it ever feels like I am bragging, or discouraging people, I’ll stop.

      Thanks for the encouragement on the loans! Stoked about that.

      Jimmy / TPP

  3. Congrats on vanquishing those student loans. Feels amazing, doesn’t it?

    Sometimes I consider writing about the details of my net worth. I may do it in the near future if I think other people can relate to it.

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