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.
We bought a house! We closed earlier this month and are in the process of moving over the next few weeks. Long-time readers will know that being a homeowner has never been a must-have for me personally, but it’s the right thing for my family at this stage of our lives. We’re ready to begin putting down roots, and it’s a huge upgrade from the place we have been renting.
We finally put our downpayment savings to good use, so we’ve had a large outflow this month. People aren’t joking when they talk about transaction costs for buying and selling a house! Going forward I’m going to be splitting up our monthly mortgage payments into “Mortgage Principal” which will count toward wealth building and “Home” which will cover interest, homeowners insurance, property taxes, utilities and major appliances/upgrades/renovations as an expense.
Outside of home buying, the largest expense was my ASRA registration ($1,190) and hotel deposit ($290). I’ll get this reimbursed from my CME fund, and I will have earned credit card points on those purchases. Hopefully I’ll see some of you in Orlando!
The variable interest rate on my refinanced loan continues to rise, and it is currently at 1.70% or about 11x higher than it was at the start of the year. At the rate it’s going it may well hit my 4% trigger to pay it off more aggressively by the end of 2022. With the current rate and balance it’s accruing about $100 per month in interest, but on average I should be able to beat that with my investments.
This is a new section I’m adding this month to document our progress toward a paid-off home. I would like to have this done within 15 years, by spring of 2037. We put 10% down and used a physician loan to avoid paying PMI. Our interest rate is 4.00% on a 30-year term. I am not making extra payments toward principal at the moment, but will obviously have to start doing this at some point to meet the 15 year goal.
June was not a happy month for the markets. The S&P — already down 13% from all-time-highs — dropped another 8% this month alone. Overall our net worth is down about $90,000 since the start of the year, even with my monthly income. I had thought there was a decent chance I would be millionaire in 2022, but it’s just not in the cards.
Pair a huge spending month with a down market and you end up with this ugliness. Still, 10 years away from financial independence isn’t bad for my mid-30s! And in the meantime we are spending freely and making memories, not just grinding toward a finish line.
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: $70,000 of $87,500 (80.0% 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 ✅