Checkup – April 2022

Welcome to another Dr. PayItBack monthly checkup! I use this space to remain accountable to our expenses and goals, track net worth and debt, and muse on what was done well and what can be improved.

You already know how this is going to go. The stock market saw its worst decline since March 2020, and we’re off to the worst start of the year since 1939. But that’s okay! You don’t get double-digit returns year over year forever, and it is normal for things to unwind every so often. Could this end up being a blip? Maybe. Could this be the start of a prolonged recession? I dunno. Folks smarter than me are making arguments both ways. But I do know that I have an investing plan in place, and that doesn’t depend on what the market is doing.

Budget/Cash Flow

If nothing else, we did have a coveted three-paycheck month. This cushioned the blow somewhat from stock market losses and a relatively high-spend. I was hit with a 1-2 punch of expenses for maintenance of my board certification and renewal of my state medical license ($1,462 total). We are under contract for a house and are starting to see some inspection/closing costs roll in ($1,137). And we’re also planning a winter Disney World trip to coincide with ASRA in Orlando ($200 deposit).

Investments are largely standard. I’m trying to double up on taxable brokerage investments in these months with extra income. We made our earnest payment to the title company for our future house, and I am counting that as part of the downpayment and therefore principal. Going forward I will be distinguishing between principal payments (under ‘wealth building’) and other escrow payments (interest, insurance, property tax, under ‘housing’ expenses).

PayItBack Progress

Rates continue to climb and the opportunity cost of paying off my loans in a lump-sum continues to dwindle. As of now I have set my trigger for aggressive payoff to 4% interest, but we’ll see if I can hold out.

Net Worth

Sad situation, but it is what it is. S&P slide nearly 9% in April, and bonds, REITs and international stocks have hardly done better. Or Bitcoin! Nowhere to hide. Net worth has now been essentially stagnant for 5 months.

I am still working out how I’m going to reflect our home in this chart. I believe I will go with it as above, only counting net equity in the positive column. I don’t want to ignore the home completely as that’s an inaccurate picture of our finances, but I also don’t want to destroy my Y-axis with the total home value and outstanding mortgage. So this will be a compromise.

Financial Independence

Graph courtesy of Mad Fientist

This pushes out farther and farther, but still within 2030. Not too shabby.

Financial Goals for 2022

1) Max out 403b: $20,500 of $20,500 (100% done) ✅
2) Max out backdoor Roth IRAs: $12,000 of $12,000 (100% done) ✅
3) Use taxable brokerage in addition to 1) and 2) to save $120,000 total for retirement: $50,000 of $87,500 (57.1% done)
4) Max out 529s for state tax benefit: $16,000 of $16,000 (100% done) 
5) Continue to pay minimum on student loan as long as rate remains <4%
6) Finalize estate documents
7) Purchase a house

How Far I’ve Come

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