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Financial accomplishments 2018-2019

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  • Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3079
    Joined: 09/18/2018

    Determining weight is more complicated than the belly.
    The dang digital scales are certified to the ounce. It’s amazing when some lineup to take a leak and the sweats get peeled off. Just depends on how strict one wishes get. Weight measurements and rules are fairly complex.

    First LOL of the day: MPMD‘s scale comment before he edited. Every time I think of it, I start giggling again.

    https://www.uiltexas.org/wrestling/page/wrestling-minimum-weight-certification-program-information

    #245300 Reply
    Avatar stellardoc1 
    Participant
    Status: Physician
    Posts: 56
    Joined: 07/21/2016

    This may be a bit irrelevant but when you calculate your expenses, where do you account for the (pretax) health-insurance (health vision dental) premiums payed by the employee? Do you calculate pre-tax value or post-tax value etc as a part of your expense for that particular month?

    #245331 Reply
    Avatar docnews 
    Participant
    Status: Physician
    Posts: 410
    Joined: 01/09/2016

    At end of training: -53k
    1 year later: 146k

    Good 200k swing as I worked my butt off. But I haven’t left my foot off the gas yet. Trying to weigh fam time now vs fam time later.

    #245339 Reply
    Avatar bikesandbeer 
    Participant
    Status: Physician
    Posts: 12
    Joined: 12/07/2017

    Agree with life balance. Will continue to be an ongoing challenge!

    We did buy a house 1x my salary. Did 0% down. So now the house is still worth 1x my salary. And I’ve made three payments so my mortgage is about .98x my salary LOL. Am I doing this right?

    I’m lucky to have a job I enjoy that is upper end of doc salary!

    #245365 Reply
    Liked by Jack_Sparrow
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1138
    Joined: 01/12/2016

    @wideopenspaces,
    Kind of surprised 😲. Jinx? Any goal is simply metric for prioritizing efforts. Hey, if you make any progress that deserves at least a participation trophy. Keeps it interesting.
    Btw, good luck.

    Click to expand…

    haha, I’m totally superstitious, about being on call and on financial stuff. We had a sewer leak into the basement in Jan that cost us 35k in the end and if something like that were to happen again in the next few months, we won’t meet our goal. So I’ll wait to discuss it when it happens 🙂

    #245374 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1799
    Joined: 01/08/2016

    Most noteworthy financial accomplishment 2018-2019: My whisky portfolio has only increased 10% (after accounting for buying, selling, repricing based on auction results and drinking). 😉

    Weird timing for this thread…we have a whole nother quarter.  Which includes the fall bourbon releases (fingers crossed).

    #245376 Reply
    Liked by wa2106
    Avatar DCdoc 
    Participant
    Status: Physician
    Posts: 562
    Joined: 06/14/2016

    You can always tell a year 1 attending when they talk about July – July results 😀. Good job. Now update us with Jan 2020-Jan 2021 results like a true attending. 😀

    #245381 Reply
    Avatar WCInewb 
    Participant
    Status: Physician
    Posts: 3
    Joined: 07/10/2019

    My biggest accomplishment this year was: starting 2019 knowing less about finances than anybody in the world, to now being a financial novice after reading WCI books, the blog, handful of other intro to personal finance books (Boglehead’s Guide, Rich Dad Poor Dad, Automatic Millionaire, Millionaire Next Door, etc.)

    The last year for my wife and I has been a bit of Jekyll and Hyde.  Both MD’s in relatively high paying specialties.  Both have jobs where we started out at pretty good salaries, but probably don’t have much room to increase.

    The good points:

    – Earned good incomes for first 1-2 years in practice for each of us

    – Refinanced both of our massive student loans to pretty reasonable rates

    – Saved a lot (500K post-tax, plus about 75K in work pensions)

    – I think our savings rate will be around 57% this year

     

    The bad points:

    – Bought a pretty expensive home.  But the mortgage is less than one year salary, so maybe not too crazy?  Depends on how you look at this one

    – Net worth took a nose dive due to home purchase

    – We broke a lot of the basic rules of WCI, Physician on Fire (bought a home right out of school, haven’t been super aggressively paying off student loans (refinanced to 10 year loans, bought/leased mid-level cars)

     

    So, all in all, I am happy I’m becoming more financially literate.  Definitely not as frugal and wise as many on this site, but seem to be doing ok despite it and am trying to learn more.

     

    #245384 Reply
    Avatar DCdoc 
    Participant
    Status: Physician
    Posts: 562
    Joined: 06/14/2016

    @wcinewb: your net worth doesn’t drop after purchasing a home if you use the assets minus liabilities formula for net worth. The value of the house becomes an asset and the mortgage is a liability. Closing costs might decrease net worth, but equity in a home shouldn’t. I know some people don’t consider primary home equity as part of net worth, but that’s not economically accurate.

    #245387 Reply
    Liked by Tim
    Avatar WCInewb 
    Participant
    Status: Physician
    Posts: 3
    Joined: 07/10/2019
    Splash Refinancing Bonus

    I think I am misunderstanding something basic then.  Or I misled you with the term “bought”.

    Let’s say you just “bought” (mortgaged) a $1 million dollar home.  If you put 20% down, but still owe $800,000.  I have been viewing it like this:

    +$200,000 in equity – an asset

    -$800,000 in loan  – a liability

    for -$600,000 net worth

     

    or do people calculate it like this:

    Asset: $1,000,000 home (assuming you could actually sell it for near that)

    Liability: -$800,000 loan

    +$200,000 net worth (essentially just your equity)

     

    That second one makes my net worth look not as horrible so hopefully that’s the correct way to do it!

    #245390 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3079
    Joined: 09/18/2018

    @wcinewbie,
    Home + 1mm
    Loan. – 800k
    Cash. -200k (downpayment)
    NW 0
    – Net worth took a nose dive due to home purchase

    With size of your shovels, the student loans and cars are next. Your key is keeping “retirement savings” separate, including taxable at 20%+.
    Then crush all debt except the mortgage (depends on your rate and preferences.
    Gross-taxes-retirement = spending. Pay debts then invest or spend. Take your time and your all set.

    #245397 Reply
    Liked by jfoxcpacfp
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1174
    Joined: 11/07/2017

    I think I am misunderstanding something basic then.  Or I misled you with the term “bought”.

    Let’s say you just “bought” (mortgaged) a $1 million dollar home.  If you put 20% down, but still owe $800,000.  I have been viewing it like this:

    +$200,000 in equity – an asset

    -$800,000 in loan  – a liability

    for -$600,000 net worth

     

    or do people calculate it like this:

    Asset: $1,000,000 home (assuming you could actually sell it for near that)

    Liability: -$800,000 loan

    +$200,000 net worth (essentially just your equity)

     

    That second one makes my net worth look not as horrible so hopefully that’s the correct way to do it!

    Click to expand…

    The second one is correct.

    #245398 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8137
    Joined: 01/09/2016

    @wcinewb: your net worth doesn’t drop after purchasing a home if you use the assets minus liabilities formula for net worth. The value of the house becomes an asset and the mortgage is a liability. Closing costs might decrease net worth, but equity in a home shouldn’t. I know some people don’t consider primary home equity as part of net worth, but that’s not economically accurate.

    Click to expand…

    To those ppl who don’t consider a residence part of your personal balance sheet (i.e. included in “net worth”): in @wcinewb ‘s example, that would mean, by purchasing a home, his/her net worth immediately decreased by the $200k that evaporated upon transfer of the deed. Am I getting this right?

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

    #245402 Reply
    Liked by StarTrekDoc
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1174
    Joined: 11/07/2017

    1.  NW increased by an amount greater than gross income.  Amount from investment growth superseded contributions.

    2.  Gave up an element of my job that I really didn’t enjoy but had felt obligated to do for the past 8 years.  Did not implode and work enjoyment has increased.

    #245403 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3079
    Joined: 09/18/2018

    @stellardoc1,
    “Do you calculate pre-tax value or post-tax value etc as a part of your expense for that particular month?”
    The amount you pay or deducted is spending.
    Pre/post simply refers to if the deduction reduces taxable income.

    #245405 Reply

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