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Financial accomplishments 2018-2019

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  • Avatar bikesandbeer 
    Participant
    Status: Physician
    Posts: 12
    Joined: 12/07/2017

    This is the time of the year when everyone leaves residency/fellowships to start practice.  I started my subspecialty practice one year ago and become somewhat financially literate leading up to that. So I thought it might be fun to review how much has changed in that one year.

    From Sept 2018-Sept 2019

    Net worth about $0 to 325k

    529s established that will lead to $200k for each kid when they are starting college

    Started backdoor roth for my wife and I (2018/2019 maxed out)

    Started 401k/457b for myself and maxing out, upped spouses contribution to max

    Started taxable account

    Established emergency fund to maybe about 3 months expenses (not counting taxable)

    HSA established and maxed out 

    Trust created for asset protection

    Refinanced my student loan – started at $290k at 6.8% about two years ago – now at 2.35% variable 5 yr loan – Principal is at $150k today – and plan to pay off about 20 months into practice

    Bought own occ disability 

    We did buy a house. Rented for 8 months. Found a nice spot about 1x salary. Job seems good, near family. 

    But most importantly we created a plan.  It’s not perfect and I’m still learning.  I did that “fire your financial advisor” course and created an investor policy statement (we are 90% stocks and 10% bonds at this time).

    To do during next 12 months: 

    -Up life insurance amount – currently have 2 million until 2024 – I’ve got a quote in my email right now to work through

    -Pay off student loan in the next 8-10 months

    -Pay off car loans (probably couple months after student loan)

    -Up taxable monthly investing once student loans are paid off

     

    Congrats to others that survived their first year in practice.  Do other people have summaries for this past year?  I’m dying to post in that “student loan payoff” thread!

     

    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016

    Bump – any takers?

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #245145 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2805
    Joined: 01/03/2017

    I’m in better financial shape than I was when 2019 started. My goal for 2020 is to continue to improve my financial situation. I’d also like to take over the world but I haven’t had the motivation lately so I may save that for 2021.

    PS: You’ve done a great job!

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #245157 Reply
    Avatar Infinity 
    Participant
    Status: Physician
    Posts: 91
    Joined: 05/25/2019

    Keep calculating your net worth yearly.

    If your numbers keep increasing by 300K each year, you will be FI in 7 years, and you will be ahead of 99% of us.

    Even if your numbers are not up this much each year, you still likely to be FI in less than 12 years.

    Congrats!

    PS: Trust does not offer asset protection, at least there is something for you to learn here 🙂

    #245160 Reply
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 215
    Joined: 05/09/2019

    I last met with a financial planner over 10 years ago so I have not added up the numbers in a various brokerage accounts recently.   I did this year and realized that we have a net worth of over one million dollars (everyday millionaire).   A million dollars is not enough to be FIRE, but it is neat to watch the power of compound interest in bull market as your investments grow faster then the amount that you deposit.  My other biggest financial accomplishment was determining that my wife had some 15K left in an old 401K which was invested in cash for the 5+ years which I moved to vanguard and put in the market.    When one spouse is not interested in finances, it is useful to have the other one review their accounts from time to time.    It is a hassle to move money between accounts, particularly when you are not the owner of the account.  I found another old 401K that I had as well with some 9K in it, invested at TIAA cref, tried to get that moved but got held up with some requirement for a bank notary or something like that.  I may work on it next year.

    #245164 Reply
    Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 614
    Joined: 08/30/2018

    All in all, I’d say the OP had a pretty impressive year from a financial standpoint. I agree with Infinity re the trust, at least I assume OP meant a RLT? But it might be good for estate planning if he or she actually funds it with the home and taxable accounts. Maybe look at an umbrella policy for asset protection? Also, any opportunity for a mega backdoor Roth with the 401k? Otherwise the future plan looks good too. Keep up the great work!

    #245173 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    “but got held up with some requirement for a bank notary or something like that. I may work on it next year.”

    Medallion signature. No need to put it off.
    •Call you bank branch and confirm the branch does it.
    • Get your form filled out.
    • Take it in on a Saturday and get it signed.
    • Mail it in.
    • Done

    It’s similar to having something notarized. It’s a bank guaranteeing who you are. Banks only do it for their own customers. If you get it done in 2019, keep it on the 2020 list. Way ahead that way.

    #245176 Reply
    Liked by nephron
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1137
    Joined: 01/12/2016

    Great job, OP!

    I have a milestone I hope to hit by December 31, but don’t want to post about it yet, in case I jinx myself and then it won’t happen 😆

    #245177 Reply
    Liked by mapplebum
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4405
    Joined: 01/08/2016

    Had a 6 figure income drop. So thats fun.

    #245179 Reply
    Liked by Vagabond MD
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 215
    Joined: 05/09/2019

    Had a 6 figure income drop. So thats fun.

    Click to expand…

    That happened to me over 5 years ago.  Went from making 270K to 170K after my employer hired a new partner and I guess decided to take it out of my paycheck.   Right after we had built a house.   Told me that they did not really need me as an extra partner but that they would enforce my restrictive covenant if I tried to join another group.   Went looking for another job after that.  Would not recommend joining a group which hires a new junior partner every few years.  In retrospect, the turnover in that small group was impressive, but I guess that model worked for her.

    #245182 Reply
    Liked by Peds
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2805
    Joined: 01/03/2017
    That happened to me over 5 years ago. Went from making 270K to 170K after my employer hired a new partner and I guess decided to take it out of my paycheck. Right after we had built a house. Told me that they did not really need me as an extra partner but that they would enforce my restrictive covenant if I tried to join another group. Went looking for another job after that. Would not recommend joining a group which hires a new junior partner every few years. In retrospect, the turnover in that small group was impressive, but I guess that model worked for her.

    Click to expand…

    Ouch. I probably would have left a flaming brown bag full of *excrement* on her doorstep every night for a year. Besides, if I would have been accused I would just scoff and declare how preposterous that would be and that I was offended to even be mentioned with such a petty act.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #245192 Reply
    Liked by nephron, Eye3md
    Avatar Duckworth 
    Participant
    Status: Physician
    Posts: 30
    Joined: 05/07/2018

    Op very nice

    For me 1 year in academic hospitalist
    AUG 2018 end of residency
    Total liquid (shitty boa checking and saving)= 38500
    403b = 6824
    Student loan refinanced 3.35% 10 year fixed = 169000
    Net Worth = – 123676 (yep negative)

    AUG 2019
    Total liquid (First republic no fee checking + ally high interest saving no more BOA) = 150070
    Roth IRA: 6160
    Roth 403b: 2664
    Trad 403b: 34671
    Vested academic Pension: 16237

    Student loan: 151545

    Net worth: +58263

    Own occ employer disability
    Employer life at 1x salary

    Will pay off the loan by next year, just wanted the cash for a possible down payment but honestly there is a low chance we will buy before next summer (if we do it then which is also unlikely) at which point I’ll have saved enough to kill the loan and have a large down payment saved.

    I will get term life this year but have no kids but am in comitted long term relationship
    I am planning on going back to fellowship at which point I will get independent disability but my employer one is good for now.
    After loans paid + e fund + down payment saved in the next 8-12 month I will start taxable for my next year as attending before my alarm will drop again

    #245205 Reply
    Avatar bikesandbeer 
    Participant
    Status: Physician
    Posts: 12
    Joined: 12/07/2017

    Thanks for the responses.

    As far as a trust goes, I was definitely mistaken. Yes, it’s a joint revocable trust that we put the house into. I need to add the taxable account somehow (any guidance on how to do this)? It would be for estate planning not asset protection.

    I actually forgot that we did buy an umbrella policy too!

    #245206 Reply
    Avatar JBME 
    Participant
    Status: Spouse
    Posts: 523
    Joined: 03/26/2018

    you’re doing great. If you keep increasing NW by $300-$350k/yr you’re going to be FI very quickly as someone already said. A few months after I discovered this site in 2017 I went back in time to calculate how our networth had changed since my SO became an attending in the summer of 2012. I saw we’ve been increasing it by $200-$250/yr since then, which is fine by me, especially when SO is not in a high-paying specialty. Expect to crank out those last student loans next year (and yes most people here would say it was a mistake to take so long to pay them off and I’d agree but we’re not trying to get to total FI before 50)

    #245219 Reply
    Avatar TheDangerZone 
    Participant
    Status: Physician
    Posts: 29
    Joined: 12/23/2018

    Do people include mortgages in the NW calculation?

    #245220 Reply

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