Net Worth Update (March 2017)

Early posting this week!  This post was originally scheduled for Saturday 4/1.  But that would conincide with April Fool's day and I hope you will agree with me - your financial future is no joking matter.

Welcome to the March 2017 edition of the FPMD Net Worth Update - a quarterly post where I put my money where my mouth is and tell you all about how I manage my finances.  Over time, it has become the most popular series on FPMD.  I talk the talk, but do I walk the walk?  You be the judge.  Here is what I've been up to for the last 3 months.

ASSETS

  • Cash - I am still holding onto more cash than I'd like.  Although I did use a good chunk of it to pay off most of my outstanding credit card debt.  The goal is to eventually find a place to park the remaining balance - preferably in a tax-advantaged account.  Any suggestions?
  • 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 went with 3 months' expenses.  I hit that target recently and am no longer contributing to the fund.  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 last year was that I switched my IRA provider from Capital One (formerly Sharebuilder) to Vanguard, essentially transitioning to completely passive investments (index funds).  I am proud to report I maxed out my contributions at $5,500 for 2016.  My goal is to do the same in 2017. 
  • 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 in 2016 at $18,000.  Currently I'm on track to do the same for 2017.
  • 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.  For 2017, the IRS increased the annual limit to $3,400 and I've adjusted my contribution schedule accordingly.  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.
  • SEP IRA - this is a new addition this quarter.  I discussed why I started an SEP IRA in this post.  Some of you may wonder why I didn't choose a solo 401k instead.  The main reason is I wanted to take advantage of the tax deduction for the 2016 tax year and a solo 401k needs to be established before the end of the calendar year.  
  • 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.

LIABILITIES

  • Credit Cards - I'm a big fan of financial guru Dave Ramsey however I disagree with his attitude toward credit cards.  I believe there are responsible ways to use credit cards and I routinely take advantage of credit card rewards and bonus offers.  I paid off most of my outstanding credit card debt in the last 3 months.  The balance you see above represent my month-to-month spending activity.  It's a little higher than usual due to fellowship interview expenses.   
  • 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.

SELF ASSESSMENT

My net worth increased by 23% in the last 3 months - a result well above my expectations.  I credit investment automation for the progress - because the money automatically goes into my Roth IRA, Roth 403b, HSA, I never have the opportunity to think about ways to spend it!  If I can keep up the pace, I may even reach Net Worth Zero before I finish residency.  Now THAT would be an accomplishment worth celebrating.    


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Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.