Welcome to the October 2016 edition of the Future Proof Net Worth Update. As a reminder, this is a quarterly post and represents my attempt at practicing what I preach by keeping you informed on how I manage my money. Some family and friends have cautioned me about being so open with my finances, but hey I'm not the only blogger doing this. And when your net worth is a whopping negative 5 figures, there's nowhere to go but up right?
- Cash - I am currently holding way too much cash for comfort. Remember this post? Well I proceeded to dump all my taxed investments only to find out that I can't simply write a check to deposit the $18k annually into my Roth 403b! And I'm too stubborn to start a regular taxed investment account while I still have Roth space available. So I'm currently depositing 100% - yes 100% - of my paycheck into my Roth 403b and paying all my bills with the proceeds from stock sales.
- Emergency Fund - depending on where you look, people usually recommend a emergency fund of 3-6 months' worth of expenses. I'm in a relatively safe financial situation thanks to residency - no short term risk of unemployment and I'm relatively well insured through my program. So I'm targeting 3 months' expenses. I'm getting pretty close so I am now starting to look for additional places to save that cash once I hit my goal. Any suggestions?
- Roth IRA - best overall retirement investment vehicle. Read this post if you want to know why. I started my account in 2013 and have been contributing the max every year. I am on track to get my $5,500 in for 2016. One big change that's not reflected in the amount above? I switched my IRA provider from Capital One (formerly Sharebuilder) to Vanguard.
- Roth 403(b) - I started investing in my employer's Roth 403(b) plan in September 2015. There is no employer match but the other benefits were enough to win me over (See A Change of Heart - Future Proof Investing Update). Currently, I am investing 100% of my paycheck into the Roth 403(b) with the hope of maxing out the $18k annual limit. What do I invest in the 403(b)? The no frills Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX).
- Health Savings Account (HSA) - I started contributing to my employer's HSA plan in January of 2016. I am currently on track to take advantage of the employer match and max out the contribution at $3,250 for 2016. If you are curious why I switched from a traditional medical plan to an HSA, see my previous posts here and here for the benefits of an HSA.
- Taxed Investments - Since my previous post I Quit..., I sold all of my taxed investments. Currently I'm not planning to make any additional taxed investments until I max out my tax advantaged options - the Roth IRA, Roth 403b and HSA.
- Car - I went with the Kelley Blue Book value for my 2009 Honda Fit which is a very optimistic estimate as the car has quite a few cosmetic blemishes. I have no clue why the value of the car increased over the last 3 months, but then again, we all know an used car is worth exactly as much as its next owner would pay it.
- Credit Cards - I did not make as much headway on my credit card debt as I would have liked this quarter. The reason for this is 2 fold:
- I'm heading to China to visit family as well as attend the wedding of one of my best friends. In fact, I should be in the air as you are reading this post. Let's just say I've been doing a lot more shopping in the last 2 weeks than I normally do. Wanna take a guess as to what my Chinese friends and relatives asked me to bring?
- I started paying my rent with my Citi Doublecash Card via this Plastiq.com deal. Which adds over $1,200 to my regular monthly credit card charges. I pay it off every month so I end up making a very tiny amount ($3.56) each month from paying rent with a credit card.
- Student Loans - I made the transition from IBR to REPAYE! See my reasoning here - I Switched to REPAYE and I Like It. My overall goal remains unchanged with the intention of eventually qualifying for Public Service Loan Forgiveness (PSLF) in 2024. Loan balance reported above reflect principal + accrued interest. Since I'm going for PSLF, this enormous number should eventually become $0 in 2024. You may have noticed that my loan balance increased at a snail pace of 0.48% over 3 months, I'm assuming that's because of the REPAYE interest subsidy but I haven't sat down to crunch the numbers.
My net worth increased by 11.5% in the last 3 months. A big reason is that I'm playing more offense on the income front. Whenever you put money between people, you tend to generate conflicts. Such was the case with our residency's internal moonlighting system. Long story short - after our senior residents graduated, we reformed moonlighting to make the system more fair and transparent. As a result, every resident in the program in good academic standing who desires to moonlight now has the opportunity to make some extra income. In fact, we submitted our reform as an abstract for the American Roentgen Ray Society (ARRS) 2017 meeting and it was accepted! I hear New Orleans is quite nice in the spring. Hope to see some of you there!
I track my net worth with Personal Capital - a great FREE tool for keeping all the numbers straight.