If you are counting, it hasn't been quite 3 months since my October Net Worth Update. But there is something special about the end of the year, especially a year as memorable as 2016. So here it is - the FPMD Net Worth Update (December 2016) edition. For those of you visiting for the first time, the Net Worth Update is a quarterly post where I divulge a TMI amount of details on how I manage my money. Whether I'm doing it right is up to you to decide.
- Cash - Yes I am still holding way too much cash for comfort. The truth is I have yet to decide on a responsible way to invest this money. Between finishing several research projects, studying for Boards and preparing for fellowship interviews, I have simply decided to put off looking at new investment options for the moment. Hey, at least the majority of this cash is sitting in a savings account earning 1% interest.
- 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. So I'm targeting 3 months' expenses. I hold my emergency fund in a Betterment Account, which I reviewed previously.
- Roth IRA - best overall retirement investment vehicle. Read this post if you want to know why. A big change this year is that I switched my IRA provider from Capital One (formerly Sharebuilder) to Vanguard, essentially transitioning to completely passive investments. I am proud to report I maxed out my contributions at $5,500 for 2016.
- Roth 403(b) - I started investing in my employer's Roth 403(b) plan in September of 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). I was able to max out my contributions this year at $18,000. 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. With the help of a generous employer match, I was able to max out my contributions at $3,350 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 - You may have noticed there is no longer a "Taxed Investments" row in the table above. 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 have time to sit down and consider the options.
- 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'm not a "car guy". To me, a car is just a tool to get from point A to point B. Whether my attitude toward cars will change in the future is a mystery but for now, I'm perfectly happy with my trusty Fit.
- Credit Cards - My credit card debt went in the wrong direction this quarter. But it's not as dire as it seems, $4,200 of the balance came from donations to charities. See The FPMD 50% Pledge or "How I Gave Away $4,200". I'm giving to a good cause, I might as well get some reward points for it. For those who are curious, I pay off my credit card balances on a month-to-month basis to avoid paying interest.
- Student Loans - I'm currently making income-based payments on the REPAYE plan. See why I switched to REPAYE 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. But until that happens, I'm keeping the whole balance on the books.
My net worth increased by 7.1% in the last 2 months. I probably could have done even more, but I have not been able to moonlight as much due to a 2 week trip to China and some medical conferences in between. The good news is that I'm still going in the right direction.
As I look toward 2017, I find myself cautiously optimistic. Sure digging myself out of the mountain of debt is a priority. But there are bigger goals to reach - matching into my preferred IR fellowship, passing the Boards being the biggest. As a recent experience with my residency's internal moonlighting system reminded me, we must also be diligent with our own temptations. When money and doing what's right comes into conflict, we must always choose doing the right thing. It may go against our self interests which makes it a very difficult choice. But as healthcare providers, we need to do the right thing. In closing, I leave you this quote that's plastered on our common room wall. I have no idea who said it, but it's a good rule to follow:
I keep my emergency fund with Betterment - a robo-advisor that's shaking up the investment industry.