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time to zero net worth

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  • lurch
    replied
    Same as you. Took me 2 years after fellowship. I calculated today and am + $87,000. Kinda surprised me because I honestly didn't think I had made it. Did not take mortgage into account but am not underwater on this.

    I started with $210,000 in student loans. Refinanced with sofi (excellent experience; got a great rate). I've been moonlighting like mad and honestly have gotten too close to burning out. It's a balance I guess but seeing the fruits of my labors today certainly gives me a lift. Probably will back off extra work for a time but continue to "live like a resident".

    Just focused on maxing out retirement accounts, 529s, emergency fund, and paying down debt fairly aggressively. Overall just putting more stuff in the green column than the red column. I tried not to sweat the details. Numbers don't lie.

    Thanks for everything WCI. Best of luck to all.

     

     

     

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  • billy
    replied
    Finally made it to zero net worth and it feels great!  I am exactly 2 years out as an attending, had 265000 dollars in med school debt when i started residency which ballooned to over 300,000 even while making IBR payments.  Make high 200,000s as an attending, living like a resident, refinanced my loans to a variable (now 2.9%) 5 year loan, live in a HCOL area (I know, but for other reasons I really need to live here) and finally I was able to make it to zero!  I was fortunate to know about roths and investing while still a resident and my residency had a great match for a tiaa cref option (4 thousand dollars per year roughly= 16 grand "free" money) so that gave me a little of a head start. I did it by throwing a LOT of money at student loans (I'm down to 200,000 now, and paying anywhere from 4-7 grand per month), buying my car off a reasonable lease payoff while paying cash (14 grand for a car worth about 17) and remembering to backdoor roth, hsa and 401k it. I have 8 months emergency fund that I no longer contribute to.  I still havent started a taxable investment account, but will once I finish paying off my student loans.  I know the math probably favors a taxable account at this point over being aggressive with student loan payments, but psychologically those loans are a killer that I can not wait to get rid of.

    So to all the newbie attendings out there- I'd advise reading this forum/website, hold off on buying that tesla for a couple of years, get yourself to zero as fast as possible. It can be done within a few years of being an attending, even living in a HCOL area.

     

    billy

     

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  • RogueDadMD
    replied


    Home equity is fairly easily accessed via a Home Equity Loan or Line of Credit (or reverse mortgage for older folks)
    Click to expand...


    Sure, but I don't consider the ability to take out another loan part of my net worth.

    If that's the case then I could add up my credit card limits and my ability to get a personal loan and business loan and second mortgage etc to my networth.

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  • RJ
    replied
    Wow. Just wow. You win some kind of prize or something. And congrats on paying it off!!!

    My wife and I are finished training just before the student loan debts started to skyrocket (well, I did anyway). I finished with ~$80k in student loans which I consolidated at 1.6% back in 2005. Paying $350/ month on automatic. I don't think anyone will give me money that cheap ever again. Have about $59K left. My wife finished in 2009 and private consolidation was dissolved already. She had $80k in loans and we paid then off in less than 2 years. So, she is debt free. We both had full scholarships to med school.

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  • Sneezy
    replied
    Home equity is fairly easily accessed via a Home Equity Loan or Line of Credit (or reverse mortgage for older folks)

    Whether it is advisable to do so is another story 

     

    Leave a comment:


  • EJ at Dads Dollars and Debts
    replied
    Very true. Over paying for a home is a big mistake....did it once and hopefully did not do it this time. Also if you leave sooner then expected, then you are likely to loose a chunk of your net worth.

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  • The White Coat Investor
    replied




    Closing costs, etc cost money. Inspections. Moving. All of these things take little chunks out of the net worth.
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    Overpaying for the house can take a major chunk out of your net worth too.

    Leave a comment:


  • EJ at Dads Dollars and Debts
    replied
    Closing costs, etc cost money. Inspections. Moving. All of these things take little chunks out of the net worth.

    Leave a comment:


  • Zaphod
    replied
    Im skating on the zero bound this year but too much is tied up into the market to consider myself fully at zero. Hopefully happens this year, once total amount over crosses some arbitrary nominal amount that a standard correction, typical bear market would mean is still at zero.

    Leave a comment:


  • RogueDadMD
    replied


    Because we borrowed more than the equity we have in the homes. For example, say we borrowed 300, on a 350k home. I owe 300, but only have 50k in equity, so -300, + 50 (and presumably -50 in down payment/closing costs, etc). Are you suggesting that one’s net worth isn’t really negative because the house has value, even if you owe on it?
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    That is exactly what I am suggesting.  I generally just leave my home out of my networth equation because it's not really an asset I would access outside of some desperate circumstance.  If I was underwater on the home then I would add that underwater portion the debit column regardless though.

    However when I do include it in my net worth, I consider the mortgage in the debit column and the home value or purchase price in the asset column (I generally aim for somewhere in between the two since home value is a fuzzy thing -- Zillow can't really predict my sale price).

    That 50k in equity is meaningless to most people unless you're going to sell the home, because for most people that's how you would access that equity.  So in that case I think you then would be considering the entire sale price (minus realtor expenses etc) in the asset part of your net worth.

    So to me it's the entire home value (minus your mortgage) or nothing in your net worth calculation, should you choose to include it at all.

     

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  • adventure
    replied


    Why did purchasing a house lower your net worth?  Are you including your mortgage but not the equity/home value?  Normally I would think you would include all or none related to the home. Unless you bought with 0% down or are underwater on the home, I wouldn’t think your net worth would have dropped.
    Click to expand...


    Because we borrowed more than the equity we have in the homes. For example, say we borrowed 300, on a 350k home. I owe 300, but only have 50k in equity, so -300, + 50 (and presumably -50 in down payment/closing costs, etc). Are you suggesting that one's net worth isn't really negative because the house has value, even if you owe on it?

    While we have a pile of student loans, our mortgages are why our net worth is significantly negative.

    Leave a comment:


  • RogueDadMD
    replied


    Took me 4.5 years to get there….then bought a house in November and dipped down to negative again. Finally the last 3 months i have been a positive net worth and it is growing exponentially. A combination of my own investment and a generous 401k match and I suspect I will be at a 100K positive net worth by the end of the year. From there, the sky is the limit.
    Click to expand...


    Why did purchasing a house lower your net worth?  Are you including your mortgage but not the equity/home value?  Normally I would think you would include all or none related to the home. Unless you bought with 0% down or are underwater on the home, I wouldn't think your net worth would have dropped.

    I'm fortunate to have had a low loan burden, and our net worth has been aided with my wife (a non physician) working part or full-time essentially our entire marriage (married 2006, started internship a few weeks later).  Of course we've paid a ton in daycare costs, so it isn't all gravy.  She isn't a super high earner (RN then NP), but it still contributes to the bottom line.

    We hit net worth of zero rapidly, and looking just at investment accounts, we're closer to 7 figures than 5 figures; it's a bit higher if you include home equity.  I think that's fairly good for an academic pediatrician a few years away from turning 40, but in hindsight we probably could have done even better early on.

    Investing in our Roth IRAs through the recession certainly helped.

    Leave a comment:


  • TotallyBroke
    replied
    Great news!  Big time congrats!  I can't wait to get there myself.

    Finished training 1 year ago also.

    I hit a nadir NW of -$427K 1 year ago. Total Debt $933K (Stud Loans, Mortgage & LeaseFleece)

    I haven't made as quick of progress due to family obligations, etc.  However, over the past year we are up by $66K.

    Considering everything we went through this past year, I'm pretty proud of that.  We also have a MUCH better financial plan moving forward than we did a year ago (when I was getting ripped off on a few whole life policies).  It's taken a little time to get things in order (and many hours on this site - Thanks Jim!), but we're getting there.  This next year should be significantly better.

    Also, we are about to buy a new (to us) vehicle for my wife (in desperate need) WITH CASH!  First time ever.

    It's amazing what a little financial knowledge/planning will do!

    Congrats again to OP!

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  • Anesthesia84
    replied
    We should be there later this year! I'm 3 years out of training, and my husband just finished his fellowship. He got all the advantages of an attending wife to start hammering at his student loans while his salary was still only 60k . At least that means that soon I'll get the payback of being part time! Ha

    It will feel great to finally hit a net worth of zero! Although the day I'm REALLY looking forward to is when the student loans are completely paid off but that won't be for a couple more years....

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  • EJ at Dads Dollars and Debts
    replied
    Took me 4.5 years to get there....then bought a house in November and dipped down to negative again. Finally the last 3 months i have been a positive net worth and it is growing exponentially. A combination of my own investment and a generous 401k match and I suspect I will be at a 100K positive net worth by the end of the year. From there, the sky is the limit.

    On a sad note, I was running my credit check yesterday (my Uber account got hacked in Russia). My initial school loan was for $154,000 but had ballooned to $180K by the time I started paying it as an attending (7 years post med school). 30K of interest for being lazy and not getting my act together in training. Not cool....

    Leave a comment:

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