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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.
- 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)
- The One Year Out from training Quarterly Net Worth Update (7/30/2018)
- 15 Months Out from training (10/2018)
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 Class||Investment||Amount 1/27/19|
|Emergency Fund||3-Months saved in High-Yield Savings||~$30,440|
|TPP 403B||Vanguard 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/403B||Index Fund Allocation||$526|
|My Back Door Roth||Vanguard Total Stock Market Index Fund||$7,421|
|Mrs. TPP Back Door Roth||Vanguard 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|
Equity (Fair Market Value = $455,000)
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.
Here are my family’s current debts.
|Class||Amount of Debt|
|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 = 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!
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.