Financial Planning for Doctors

Each quarter, I’ve published the physician philosopher’s net worth update.  Now that I am non-anonymous, I’ll probably stop at 2 years unless there is a strong push from readers to see me share our successes and failures.  The purpose of this blog is to help guide you to prevent and treat burnout through financial independence.  And, if these quarterly net worth updates are not accomplishing that, then they need to go.  Let me know in the comments if they are helpful for you.  Otherwise, they’ll stop in July 2019.

The take home before you read about any of our progress is to know that we made a lot of mistakes along the way.  We came out of medical school with more debt than we should have.  We finance two cars (yikes!).  But we turned it all around in my fellowship year when I started becoming financially literate.

That led to us paying off $200,000 of student loans in 19 months, and getting our financial house in order.  Please, know that you can do it, too!

First, a Quick Recap

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.  This is how our net worth has changed at each of those time points:

  • Six months out, it had improved to (-) $78,819.
  • By 9 months out we were at  (-) $40,270
  • We finally had a positive net worth one year out at +$45,000
  • At 15 months, we had reached $73,000.
  • It took us 18 months to get to a six figure net worth: $107,718

Where are we now?  Read on to find out.

21 Months After Fellowship: Assets

Given that I am no longer anonymous with the release of my book (which you should purchase, by the way), the details below are still accurate, but not quite as specific.  I have no desire to get mugged.

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~$40,000
TPP 403BVanguard Total Bond Index Fund$3,406
 Vanguard Institutional Index Fund$38,815
 Vanguard Mid-Cap Index Fund$23,744
 Vanguard Small-Cap Index Fund$22,933
 Vanguard Total International Stock Index Fund$15,676
 Mrs. TPP 457 (governmental)NC Fixed (Intermediate Bond) Index Fund$1,362
 NC Large Cap Index Fund (Black Rock)$11,451
 NC Small/Mid Cap Index Fund (Black Rock)$8,547
 NC International Index Fund (Black Rock)$5,029
Mrs. TPP 401K/403BVarious Stock Index Funds$4,766
My Back Door RothVanguard Total Stock Market Index Fund (VTSAX)$8,027
Mrs. TPP Back Door RothVanguard Total Stock Market Index Fund (VTSAX)$8,333
529 TPP Kid #1 (Utah) $6,455
529 TPP Kid # 2 (Utah) $3,263
529 TPP Kid # 3 (Utah) $2,441
HomeEquity (Fair Market Value = $461,000)$6,000
Total Assets

Comments on our assets

I feel like a broken record.  Our bond allocation still isn’t to the 10% that I’d like to be at.  That said, I am rebalancing by simply adding new additions to bonds in my 403B at a higher proportion.  Come July, I’ll do my once annual rebalancing.  

After a long few months following our house purchase, which cost more in upfront costs than we anticipated (improvements, surprise broken items, etc), it feels like we are finally clawing back out of that.  We have made a ton of progress.

That said, we dropped our 529 contributions during that time period in order to offset increased childcare costs for after school care at my oldest little philosopher’s new school.  We are back on track with what we need to save to get $150,000 in each 529 plan (three kids total = three 529’s).

Investment Comments on Assets

Good news first.  The market has been up this year!  My 403B at work is up almost 18%.  That certainly helped our numbers above.

We ended up having about $12,000 worth of unexpected expenses between selling our old house and buying the new.  This is definitely impacting our progress in terms of savings goals this year.  

In addition to that, we had a $6,500 tax bill in March.  I knew we would owe some – because I don’t like giving the government an interest free loan – but it was a little more than I anticipated.

Despite all of that, our assets increased around $50,000 for the quarter.  Not too bad!

After sitting down with my wife, we have decided to slow the investment progress by paying off our car loans.  We feel like being debt free (outside of the mortgage) is our most important financial goals.  It’s amazing how clear the big picture comes when you go through the Three Kinder Questions and have intentional conversations.

That said, we are putting extra cash flow into our debt as described below.  It looks like our annual savings number will shake out to somewhere between $90,000 – $100,000 for the year. 

Debts: 21 Months Out

Here are my family’s current debts.

ClassAmount of Debt
My Car Loan$34,481
Her Car Loan$18,447
Private Loan (oops)$6,500
Home Mortgage (~453,300) 
Total Debt (excluding mortgage)$59,428

Some Comments on Our Debt

The first big comment is that my wife and I have apparently been having a $100 draft every month for the last two years.  I didn’t notice it originally, but then we got a notice in the mail that our servicer was changing.  Apparently, we have a personal loan from medical school that is being paid back at $100 per month and has about $6,500 left on it. 

This is obviously disappointing, but I am not too concerned about it in the grand scheme of things.  We will pay it off after our car loans, speaking of which…

Our priorities have shifted a bit in the past few months.  I started cash flowing an extra $1,000 towards the swagger wagon.  Our goal is to have our car loans paid off in about the next 12 months.  The car loan on the van should be gone in July with the bonus I will receive that month.  

After that $1,500 payment is gone, we will roll that into my car loan and start paying $2,250 per month on my car until it is paid off.  Additional cash saved each month may go towards this goal as well.  

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

$210,248 – $59,428 = $150,820

Goals / Summary

  • We improved our net worth by $43,102 in the last quarter.
  • Since I finished training (when my net worth was -$208,000), we have improved our position by $358,820 in 21 months. This easily puts us on track to have increased our net worth >$400,000 in two years when July comes.  
  • This means that over 50% of our gross income has gone towards building wealth during that time frame. In other words, the majority of our income has gone towards paying down debt or investing in the market.  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.

Being done with our big student loan debt burden has been so helpful.  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.


14 thoughts on “Quarterly Net Worth Update: 21 Months Out From Training”

  1. I like these posts, but only because it amazes me how similar our paths are, even if we priortize different things. I started at -155k at same date, just crossed the +200k mark with last paycheck. Didn’t prioritize paying off student loans as fast (4 years is likely) to be able to invest along the way. But us both living on about half has made the trajectory very similar.

  2. I love how you spell out all the details – too many doctors think they have no hope of paying down their debt but you clearly show how it can be done without eating instant noodles at every mea.

    • Thanks, Cathy! I am glad that others find it helpful. I try to be transparent and honest with everything. No sense in hiding our failures, or the ways in which we have found success. I hope it provides a bit of a road map for those trying to pursue the same journey!

  3. Keep it going! I would sell one of the cars (yours). Drive a beater you can pay cash for and knock out the personal loan yesterday!

    • Trust me, I’ve thought about it 😉 I wrestle with this on the regular because I am a numbers guy. However, my tendency is towards being way too frugal. So, my car provides a bit of sanity to my life. Getting rid of the car would only speed up our timeline about 6 months. FI at 42 or 42.5?

      So, it just doesn’t make a lot of sense to get rid of it. That said, we aren’t financing anything from here on out, and I DO NOT recommend anyone else finance a car!

    • I agree with you. If it were up to me, I’d follow a three fund portfolio. Unfortunately, none of those three funds are offered in any of the retirement accounts we have access to. So, we have to diversify in each to get a piece of all of the market.

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