I have now been an attending for 24 months. It feels like just yesterday that I started independent practice with our net worth bottomed out at around -$161,000. By a year out from training we had increased our net worth by $194,000 and had broken comfortably into positive territory. I’ve been featured on Physician on FIRE, and I spend way too much time on Twitter.
With another year under our belt, it’s time to take stock of of how far we’ve come and recap the decisions that have gotten us here. My original goal was to have our student loans paid off by….now!, two years out of training; that clearly has changed as interest rates plummeted and the uncertainty of COVID demanded some changes in cash flow. Being debt-free would feel pretty good. But how does our current situation compare? And how well did we do in my second year of practice vs my first?
Cash
My first year as an attending saw the transition from Normal Life into the post-COVID world. The personal and professional uncertainty this brought prompted me to build up an ’emergency fund’ for the first time in my life, which ultimately amounted to 3 months of typical spending. This put our cash holdings at approximately $26,000.
The past year, as the pandemic has enmeshed itself into our daily routine and I have settled back into something approaching ‘stability’ in my current position, we have started saving up for downpayment on an eventual house. The local market — at least pre-2021 housing madness — put us in the $75k-90k range for a downpayment. To that end, we have saved an additional $87,000, putting us at a total cash increase of $113,000.
Investments
2020 was a year for the record books, both in terms of the stock market decline and its subsequent recovery. Our investment portfolio likewise saw a drop of almost 1/3, but had recovered in about 3.5 months. When the dust settling after my first year of training, our investments increased had by $80,000.
The ensuing year was thankfully a much smoother ride. The stock market was an almost unbroken ride upwards, carrying our investments up another $189,000, for a grand total of $269,000 in two years.
Credit Cards
Credit cards are thankfully an area of our finances where the hard work is behind us. I had floated most of my fellowship year expenses on a 0% APR card, and I began to really tackle this when COVID took hold. This reduced our CC balance by $12,000.
Since that time, we really haven’t carried more than $5,000 in credit card debt for longer than the monthly interest-free float period. They are paid off at least once per month, and in the past year our CC debt is down $3,000. This makes $15,000 since starting my attending position.
Loans
The category corresponding to the namesake of this blog has probably been the most boring. And that’s okay! We’ve had a slow and steady grind to eradicate our loans. This amounted to $76,000 in my first year as an attending, a large portion of which was paying off our two cars.
Things have slowed down a bit since then, as a function of the successful car payoffs and plummeting student loan interest rates. In the past year out student loan burden has decreased by $40,000, making $116,000 since I left training. Not down to zero by any means, but nothing to sniff at either.
Net Worth
Put ’em together and what have you got? While my first year out of training saw a net worth increase of $196,000, the past 12 months blew past it with another $317,000. This all amounts to a net worth gain of $513,000 in two years. I am not messing around.
Overall, a balanced approach toward wealth growth has gone a long way in my first two years as an attending. The snowball is built, and it will only keep accelerating.
Congratulations on that amazing progress!
Do you feel an urge to loosen up on the savings and/or increase spending on frivolous stuff? Are you waiting for a particular goal post (closing on a house, paying off the school loans) to do that? Or are you feeling good about your situation and plan to keep doing this for as long as you are working?
It’s a good question. Right now I feel like our spending is relatively unconstrained: I never think about costs for groceries or restaurants or much anything else anymore. I’ve never had very expensive taste and my guilty pleasures are more in the small electronics range than the car or boat range. So this will probably be the status quo for a while, except for maybe spending a bit more on travel.
Thanks for for reading!
Congrats.
You are on an amazing trajectory.
You mentioned car loans. We always bought used cars…always. And in the State of Connecticut, cars are also taxed annually, with a property tax. Older cars = less property tax.
Yeah we’ve always bought used. Loans were a matter of necessity at the time, and the last one was only a 2 year term. Plan is most likely to pay cash going forward.