Welcome to another Dr. PayItBack monthly quarterly 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.
And we’re back.
One of the goals of every financial plan should probably be to reach the point where money management is simple, boring, and automatic. The short-term needs are satisfied, the medium term goals are completed, and the long-term plans are set into motion. We’ve essentially reached that point.
They major driving force behind this blog was obviously to document my journey back to broke and then to zero student debt. With that accomplished, I start to question the rationale for continuing. I haven’t become any more prolific or impressive a writer since I started, and even these brief posts don’t come to me much easier than four years ago.
But the months without fresh updates brought out more than a few people expressing how much they like the blog and look forward to posts. So at least for the time being I’ll continue, albeit on an abbreviated quarterly schedule. I’m likely to continue monthly updates on Twitter and semiannual (that’s six months, right?) updates on Reddit. And I do like the idea of holding on to the domain, as my own little (not) real estate on the Internet.
Budget/Cash Flow
Unlike 2022, where I had essentially finished funding our retirement accounts and 529s by January, we’re taking things a little slower this year. With questionable wisdom, I used my end-of-year bonus and depleted our emergency fund to finish paying off my student loans, which dried up what would have been the rapid funding source.
I’m making regular 403b and 457 contributions via automatic withdrawals, and these will be finished just before the end of the year. I have at least finished funding our Roth IRAs using the backdoor funding method. And I am slowly building back up our emergency fund.
Next moves will be to fund our boys’ 529s, and then resume regular monthly brokerage contributions, previously $10,000 per month.
Our spending remained largely in check, with the exception of a large ($9,000) outlay for a large new patio in the back yard. Don’t let anyone tell you that buying is cheaper than renting. Our only other 4-figure expense this quarter was paying for the pleasure of remaining an honored member of the ASA ($1,120). I don’t even go to the conference, maybe I should reconsider.
We hit a wealth building rate of 56% this quarter which I think is respectable. My long-stated goal has been for 2/3 of net (post-tax) pay, but I’m happy with anything >50%.
Mortgage
Our 4% mortgage still feels like blessing even though we didn’t tick the bottom for rates. Our bank is currently offering 7.375% for new 30-years, which just seems totally unmanageable. The larger jumps in equity above do not reflect extra payments, but instead update home value. If our home drops significantly in value the blue will drop accordingly.
Net Worth
We broke $800,000 on March 30th for the first (and hopefully last) time, having hit literally $799,999 on February 2nd. I would like to see our savings account back in the $30,000 range to have a ~3 month emergency fund, and I still dream of the good old days when my Roth IRA was six figures.
Financial Independence
We remain vaguely on target for my goal of FI by age 50. This model continues to agree with my own calculations, give or take 6 months.
It’s good to be back! Thank you for reading.
Financial Goals for 2023
1) Max out 403b: $6,340 of $22,500 (28.2% done)
2) Max out 457b: $6,120 of $22,500 (27.2% done)
3) Max out backdoor Roth IRAs: $13,000 of $13,000 (100% done) ✅
4) Use taxable brokerage in addition to goals 1, 2, and 3 to save $178,000 total for retirement: $0 of $120,000 (0% done)
5) Contribute to 529s and get state tax deduction: $0 of $16,000 (0% done)
6) Increase umbrella insurance to $3,000,000
Huge fan of your posts and blogs. I am a PGY – 4 about to start attending job in two years. Have been investing for about a year plus now, mostly in stocks. What app/platform do you use to keep track of your investments and make these graphs?
Thank you!
Thanks! I use Personal Capital, now called Empower, for automatic tracking. I make the charts in Apple Numbers.
Thank you, I just tried it out and it is amazing!
For financial independence do you include income from traditional retirement accounts like 401k or is this all from other investments such as brokerage accounts?