Today is my quarterly net worth update number 3. I started writing these six months out from training. Today is the third installment, but the timeline from training is actually a full year out at this point. I had two short-term goals in the first couple of years. 1) Have $100,000 in assets in one year. 2) We wanted to have a positive net worth at the two year mark. To learn more about how I did, please keep reading.
We blasted our goals out of the water!!!
To read my previous Net Worth Updates click the following links.
- This post discusses some of my numbers and goals when I first started this site in November 2017.
- Here is my first quarterly net worth update written six months after I started my job as an attending (numbers from January 2018)
- Second Quarterly Net Worth Update (4/27/18)
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. I’ll save you reading all the way to the end… our net worth is now a +$45,000!
The gist is that when my paycheck increased after fellowship by $10,000-11,000 (depending on the time of year and meeting the social security wage limit of $128,000)… I took ~$1100 and used it on whatever I wanted. The other $10,900 each month has gone towards building wealth. And I reaped what I sowed, which are the awesome results you see below.
[Note: I use personal capital to track my net worth. It’s a great tool and is completely free.]
Net Worth = Assets – Debts
Here are my assets and the dollar amount for each category. All of this is as of 7/27/18
|Asset Class||Investment||Amount 7/27/18|
|Savings (emergency fund)||Cash||$30,000|
|TPP 403B||Vanguard Institutional Index Fund||$30,281|
|Vanguard Mid-Cap Index Fund||$17,512|
|Vanguard Selected Value Fund||$0|
|Vanguard Small-Cap Index Fund||$17,536|
|Vanguard Total International Stock Index Fund||$11,694|
|Mrs. TPP 457 (governmental)||NC Large Cap Index Fund (Black Rock)||$7,027|
|NC Small/Mid Cap Index Fund (Black Rock)||$4,309|
|NC International Index Fund (Black Rock)||$2,636|
|My Back Door Roth||Vanguard Total Stock Market Index Fund||$5,604|
|Mrs. TPP Back Door Roth||Vanguard Total Stock Market Index Fund||$5,604|
|529 TPP Kid # 1 (Utah)||$4,662|
|529 TPP Kid # 2 (Utah)||$2,863|
|529 TPP Kid # 3 (Utah)||$2,136|
|Home||Equity (Fair Market Value = $126,000)||$28,000|
(Total Assets without house included)
General comments on my assets
Comment Number 1: I put these updates up one month later than most because I receive a clinical bonus (picking up extra shifts, research, etc) the month after each financial quarter. In July we received our annual bonus. This was the culmination of three years of research work and really paid off for us.
Comment Number 2: I have a really good match at my employer. My contribution annually is my max of $18,500. My employer matches/contributes up to a total of ~$47,000 for my current base pay, but when bonuses are included I am closer to the full amount ($55,000). This helps a lot.
Comment Number 3: I recommend that most people use an 80/20 (90/10 at the max) stock/bond ratio if you are my age. This is probably the one area where I endorse the “do what I say; not what I do” mantra. If you want to learn why I am 100% stocks until I pay off my student loans, you can read more about that on a guest post I wrote over at Physician on Fire. I’ll be switching to 85/15 when my loans are gone in seven months.
Investment Comments on Assets
Comment Number 1: Our annual rebalancing occurred in June. In my 403B at work, I am now putting 30% large cap, 25% mid cap, 25% small cap, and 20% total international stock. My wife’s 457 is 50% large cap, 30% mid/small cap, and 20% international. Roth IRA is 100% total stock market index fund.
Comment Number 2: My two younger kids’ 529 will be slowing down for the next year. My wife took a full-time job, which basically earns a little less than the increased childcare costs we will incur. We decided to slow down 529 contributions instead of our student loan debt pay off for one year.
When we go to one kid in daycare – instead of two – we will go back to what we were doing in the 529. If next year is better than expected – like this one – then we will put more money back into the 529 plans.
Comment Number 3: Because of Mrs. TPP’s new job, she now has access to a 401K. However, we will prefer putting money in her governmental 457 because we can access this money immediately if we retire early as opposed to the 401K where we must wait til 59.5 years old unless we know how to bend the rules.
Comment Number 4: I transferred all of the money out of the mid-cap value fund because of higher expense ratios compared to the other mid-cap index fund.
Here are my family’s current debts.
As a continued shout out: If you want to read a great book that provides perspective on why you should aggressively pay down your debt, I recommend Dr. Fawcett’s book on Eliminating Debt for Doctors.
|Class||Amount of Debt|
|Student Loans||$77,940 !!!!|
|My Car Loan||$39,493|
|Her Car Loan||$23,998|
|Home Mortgage (~98,000)*|
Some Comments on my Debt
*Comment Number 1: We are rocking this category out. I sent a $52,000 check towards my student loans from money we saved up from bonuses this year, including my July annual bonus. That knocked my loans down to <$80,000. We can see the finish line! We decreased our total debt from $206,454 to $141,431 in one quarter.
In other words, we have cut our debt by 25% in three months. That’s huge. Living like a resident does pay off!
Comment Number 2: If we simply pay our current monthly student loan payment ($5,500) we will pay off the loans in 13 months. We want them gone in 7-8 months, though. That would mean we made $200,000 vanish in 20 months.
If you struggle with public math like I do, that’s $10,000 per month. We are kicking our student loans in the teeth.
Comment Number 3: Once our student loans are gone, that will free up $5,500 in cash flow each month. $2500 will go towards a mortgage payment on a new house. $2,500 will go to a taxable investment account. And $500 per month will be for my wife and I to enjoy via The 10% Rule.
Comment Number 4: The glaring car loans still exist. And they will until they are paid off. I’ve discussed this at length. My car and playing golf with my kids make me happy. I would have been even happier if Tiger Woods or Jordan Spieth won the Open Championship. Oh, well.
Despite this, we are reaching our goals and more!
Remember, you can have anything you want. But you cannot have everything you want all at once. We chose cars instead of private school, the bigger house (for now), and traveling. And the cars were bought according to the 10% Rule.
Net Worth / Goals
We have a positive net worth!!!!!!
$187,864 – $141,431 =
I could scream this from the mountains if it wouldn’t make other people hate me!
- In the last quarter (since our last Net Worth Update), we have improved $86,703. That’s huge for just one quarter. This was in large part due to the fact that I received my annual bonus, which I worked my tail off to get.
- Since I finished training (when my net worth was -$208,000), we have improved our position by $254,443 in just 12 months. About 25% of our gross pay goes to taxes. 10% post-tax went to our church. And we lived on ~15-20% of our annual income. All of the rest (50%) went to destroying debt or investment accounts. We also earned some money while in the market.
This should serve as proof that living like a resident after you works if you make a plan and stick with it!
Looking back at my original TPP Wealth Manifesto, we’ve now achieved some goals.
- We have >$150,000 in assets with the house excluded! These results crushed our goal of having $100,000 in assets by July 1st, 2018 (even if it was posted a month late)
- We have a positive net worth!!!!! Originally, we were really hoping to achieve this by two years out. We made a plan, set it, and forgot about it. Look where we are now! I couldn’t be more excited about this.
Goals Going Forward
- The goal to be student loan debt free has been moved up to 20 months out from training instead of the originally plan of 24 months. This will be March, 2018. We have $77,000 left. So, we will need to come up with ~$33,000 in money somewhere else. In my view, this will come from either bonuses or the equity when we sell our home – or a combination of the two.
- Waiting to pay off the loans until we buy the next house has become harder and harder. We realized we cannot just wake up one day and say “Today is the day we buy a house!” For this reason, we started looking… and should have waited. Opening up Pandora’s box early was not wise. We have slammed the lid on that box for another four months.
There is Hope!
This post should go to show that living like a resident pays huge dividends! It really can be done.
We put our heads down and put the plow to the ground. We used well over half of our gross income towards building wealth through destroying debt and investing.
After putting the work in throughout this year, it finally all feels worth it. Our glide path is solid.
Share your awesome financial news! What goals have you accomplished this year? How did you do it? Leave a comment below.