Welcome to the March 2018 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.
- Cash - I've been hoarding cash since I did my taxes in February. Let's just say I've been working for Uncle Sam. Honestly it's a bit embarrassing that someone who blogs about saving money on taxes ended up doing piss poor tax planning. But hey, I'm not going to complain too much about making more money.
- Emergency Fund - Unfortunately, I had to hold back on building up my emergency fund because of Uncle Sam.
- Roth IRA - Have you followed the market recently? If the word correction entered your mind at some point. Then welcome to the club! Sure it looks like my Roth IRA balance increased by 2.9% in the first quarter of 2018. But if you subtract out the monthly deposits that goes into the account, the year-to-date performance is a meager 2.3%. And I consider myself lucky since the S&P 500 is sitting at -1.22% for the year so far.
- Roth 403(b) - Similar story here. Subtracting out contributions, my 403b account is sitting at -1.12% for the year.
- Pre-tax 457(b) - Subtracting out contributions, my 457b account is sitting at -0.62% for the year. Slightly different performance compared to the 403b as I have a different portfolio mix in my 457b account with more fixed income securities which are resistant to market fluctuations.
- Employer 401(a) - Probably the biggest news in my financial life in the last 3 months. I must applaud my employer for finally giving residents/fellows the benefit of employer matching contributions. What's even more impressive is that they've decided to make these contributions retroactively dating back to January 2017. Every penny of that $2,106 is free money. Bravo Florida Hospital!
- SEP IRA - My SEP IRA is hosted at Fidelity and entirely invested in the S&P 500 Index Fund (FUSEX). Not surprisingly, it's followed the market down.
- Health Savings Account (HSA) - After a recent health scare, I've returned to contributing regularly to my HSA plan. 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.
- Car - I cancelled my Tesla Model 3 preorder for a couple of reasons - 1) I'm sick and tired of the incessant delivery delays and 2) I decided that a $49,000 car isn't what I need to start off my career. Rather, I intend to drive my trusty 2009 Honda Fit until it dies.
- Credit Cards - My credit card spending went up in the last quarter. I've been traveling a bit for work and also planned a couple of trips for pleasure, including a weeklong self-driving tour of Ireland! My favorite credit card is still the Chase Sapphire Reserve. For a list of my most frequently used credit cards, see Future Proof Toolkit - My Favorite Credit Cards.
- Student Loans - I'm currently making income-based payments on the REPAYE plan. See why I Switched to REPAYE and I Like It. My overall goal remains unchanged with the intention of qualifying for Public Service Loan Forgiveness (PSLF). And with the recent news of borrowers actually getting their loans forgiven, I am less even more convinced that PSLF will remain a viable option for those currently enrolled.
This was the very first quarter that I crossed into positive net worth territory! Sure the value of my assets will fluctuate with market forces and I wouldn't be surprised if my net worth becomes negative again in the near future. But I'm still proud to hit this milestone before finishing residency. Like a true American, I decided to celebrate by splurging and booked a weeklong self-driving tour of Ireland. Let me know if you have any travel tips!
Looking forward to the rest of 2018, I plan to ramp down my retirement plan contributions for the simple reason that I won't be making enough income. But I take solace in the fact that the light at the end of the tunnel is getting brighter by the day.