Financial Planning for Doctors

Every 3 months for the past two years, I have published my family’s net worth.  Unless there is a strong outcry from the readers, this will be the last net worth update.  I don’t want to flaunt our progress, and I feel like we have already laid a good foundation and example for others to follow in their first two years after training.  

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 this month.

Before we start, I want those brave enough to read this to know two things.  First, my family and I have made a number of mistakes along the way and we have made a ton of progress.  Second, you should know that you can do it, too!   Though, you have to be dedicated and work diligently towards your goals!

A Quick Update on The Last Two Years

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
  • After 21 months, we were sitting at a net worth of $150,820.

Where are we now?  Read on to find out.

24 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 7/26/2019

Asset ClassInvestmentAmount 1/27/19
Emergency FundSlightly more than 3-Months of Expenses~$40,000
TPP 403BVanguard Total Bond Index Fund$7,329
 Vanguard Institutional (Large Cap) Index Fund$44,702
 Vanguard Mid-Cap Index Fund$28,286
 Vanguard Small-Cap Index Fund$26,867
 Vanguard Total International Stock Index Fund$18,555
 Mrs. TPP 457 (governmental)NC Fixed (Intermediate Bond) Index Fund$1,884
 NC Large Cap Index Fund (Black Rock)$13,505
 NC Small/Mid Cap Index Fund (Black Rock)$10,288
 NC International Index Fund (Black Rock)$6,033
Mrs. TPP 401K/403BVarious Stock Index Funds$8,990
My Back Door RothVanguard Real Estate Index Fund (VGSIX)$8,600
Mrs. TPP Back Door RothVanguard Total Stock Market Index Fund (VTSAX)$8,599
529 TPP Kid #1 (Utah)90% stocks/10% bonds – Index Funds$7,974
529 TPP Kid # 2 (Utah)90% stocks/10% bonds – Index Funds$3,655
529 TPP Kid # 3 (Utah)90% stocks/10% bonds – Index Funds$2,707
HomeEquity (Fair Market Value = $469,000)$15,000
Total Assets
 $252,974

Comments on our assets

We have officially broken a quarter of a million in assets in only two years.  This all occurred while we destroyed some major debt as described below.  And, the numbers above do not include our depreciating assets (we have two cars that are worth about $50,000 together).

We started investing in the Real Estate Index Fund offered by Vanguard in one of our backdoor Roth IRA accounts.  This is approximately 5% of our portfolio while another 5% of our portfolio is bonds.  Thus, 90% of our portfolio is in index funds that are investing in equities (i.e. stocks).

We plan to move our cash to a high-yield savings account offering at least 2% in the next month or two.  

Going forward, our annual investment goal will be between $115,000 and $125,000 with a goal of having around $2.5 million in assets by the time we are 45. I suspect we will get there sooner than that, though, with a higher savings rate.

Debts: 21 Months Out

Here are my family’s current debts.

ClassAmount of Debt
Student LoansNOTHING, NADA, ZIP, ZILCH…. ZERO!!!!
My Car LoanNothing!
Her Car LoanYup… nothing..
Private Loan (oops)Gone!
Home Mortgage (~452,500) 
Total Debt (excluding mortgage)$0 

 

Some Comments on Our Debt

In the last three months we paid off both car loans and that private loan from medical school that we forgot about (another example that people who care a lot about personal finance can make mistakes). In all, we paid off $55,000 in debt this quarter.  In large part, this was accomplished by using 90% of my annual bonus straight towards our debt.  The other 10%?  We followed the 10% rule and purchased a rug and a ping pong table!

We view the mortgage debt as a zero sum game.  In fact, we have some equity in the house with the local market turning into a seller’s market.  That said, if we wanted, we could get rid of the house.  It would cost us a lot from our emergency fund, but we could make it work.  

Still, our goal is to pay our mortgage off in fifteen years at a maximum.  I bet we do it ten, though, with our track record of destroying debt.  

Net Worth  

Net Worth = Assets – Debts
$252,974 – $0 = $252,974

**For the purest out there, if we were to include the house, we would include the full value on the assets side and the full amount owed on the debt side of the equation above.  This would result in the same net worth number.

Goals / Summary

  • We improved our net worth by over $100,000 in the last quarter alone! This is in large part because of my annual bonus (90% of which went towards our remaining non-mortgage debt).  We did make some blogging income, too. 
  • Since I finished training (when my net worth was -$208,000), we have improved our position by $460,974 in only 2 years. If we include the value of the cars, that number is >$500,000. I am pretty proud of that.
  • If we keep this pace up, we will be sitting at $1,000,000 in assets in only 3-4 more years and well before age 40.
  • Over 50% of our gross income has gone towards building wealth over the last 24 months. In other words, the majority of our income has gone towards paying down debt or investing in the market.  I guess I am still 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.

Now that all of our non-mortgage debt is gone, we will be cash flowing a bunch of extra money each month.  Going forward, we plan on building a slightly larger emergency fund. Then, we will start piling cash into a taxable account and a vacation fund for our vacations each year.  

I hope that this series of posts has been a helpful case study of how you can go from a very negative net worth to a very positive net worth quickly. All you have to do is set some goals and then set your mind to it!

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

TPP

25 thoughts on “The Last Quarterly Net Worth Update: 2 Years Later”

  1. Congratulations on the rapid rise in net worth. It truly shows what you can accomplish if you follow some basic principles.

    On your current trajectory you will definitely surpass what I was able to achieve in your projected milestones so you can definitely set yourself up for a bright financial future. I had a major hiccup in my trajectory because of the divorce but have since recovered quite nicely.

  2. Very inspiring example for those of us still in training. I will certainly miss reading these updates, and the vicarious win of seeing debts paid off. Congrats on the new ping pong table!!

  3. Congrats on paying off the last of your (non-mortgage) debts! I bet that’s quite the feeling to wrap up everything so quickly.

    Just my opinion, but I think many of your readers would benefit from you continuing these updates. Your financial journey doesn’t end once you climb out of debt. If anything now seems like the more interesting time because you have so much extra cash flow at your disposal and it would be interesting to see what you can make of it.

    Regardless of whether you continue them, it’s been fun following along. Best of luck!

    • I appreciate the encouragement! Maybe I’ll keep them going a little longer. I’m an open book in real life, which makes it easier to be an open book on here. I just want to make sure this isn’t ever a “hey, look how awesome we are” kind of thing. The second it feels like that, it is done.

  4. I enjoy these posts. If not quarterly maybe a yearly update would be a reasonable compromise for a couple more years.

    How do you determine fair market value of your home? Zillow estimate or something more accurate?

    • Thanks. That’s a good idea. Based on the amount of response I’ve received, I may have to continue this.

      As for house estimates, I do use Zillow. Do you know of something that is more accurate? I’d be happy to use that instead. I just don’t want to get to the level of looking at “comps” and gauging it 🙂

  5. Crushing it!

    There are physicians a decade out from training that haven’t made the progress you have.

    Now I’m just wondering who’s going to make it to FI first, you or “Ether to FI.”

    Cheers!
    -PoF

  6. I love these posts. I came out of training at the same time as you so it’s helpful for me to track my progress alongside yours.

    Congrats on the phenomenal start on your journey.

  7. This is so inspirational. Please keep it
    up! I thoroughly enjoy your blog. It’s very informative and keeps me motivated!

  8. Congratulations on this amazing progress! I too like seeing these kinds of posts. It gets me fired up all over again each time I read one. I’m further out of training than you, but have a similar net worth goal by the time I’m 45 (which is only 2.5 short years away). Keep up the great work.

  9. Congrats! Sorry to see this feature go, but I think you’ve certainly made your point. You’ve been a specific inspiration – I’m starting my first attending position tomorrow (!) and I only hope I can approximate your success.

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