Financial Progress After 3 Years of Living Like a Resident

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With the high incomes that physicians typically make during our active careers, living like a resident can jumpstart that compounding process. Starting with more in the kitty helps. The more you put aside, pay down, or don’t spend, the more money there is available to work hard for your financial independence.

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You might be surprised how as little as three years of high income but low spending can really jumpstart one’s progression toward FI. Dr Pay it Back shares with us his progress in all things financial after three years of living like a resident.

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Three years have passed since I became an attending. I entered practice with my finger on the proverbial trigger, ready to put my newfound salary to work immediately. It took 10 months to ‘get back to broke’ (reach a net worth of zero), and by a year out our net worth had increased by $193,000.

The past year has seen somewhat more challenging market conditions, and we had a number of large expenditures in the form of a car and a house. So how have we done? Are we at least treading water?

The cash cushion of the previous two years has become a thing of the past. We had saved up a 6-figure amount for a downpayment, which was ultimately deployed a few months ago. I received the final disbursement from my father’s inheritance ($160,000), which is the largest spike on the chart above; most of this was quickly invested into the market.

Our emergency fund has dwindled to a little below where I would ultimately like it and sits at about 2 months of spending (the goal would be 3 months). Overall we are still holding $28,000 more in cash than when I started.

The smooth ride of 2021 is also a thing of the past, and investors have been punished since the start of the year. If you zoom out, the results of disciplined investing are clear. It continues to go up and to the right, just with some variance in the slope. In total, our investments are up $518,000 in three years.

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Financial Progress After 3 Years of Living Like a Resident

You might be surprised how as little as three years of high income but low spending can really jumpstart one’s progression toward FI. Dr Pay it Back shares with us his progress in all things financial after three years of living like a resident.

Three years have passed since I became an attending. I entered practice with my finger on the proverbial trigger, ready to put my newfound salary to work immediately. It took 10 months to ‘get back to broke’ (reach a net worth of zero), and by a year out our net worth had increased by $193,000.

The past year has seen somewhat more challenging market conditions, and we had a number of large expenditures in the form of a car and a house. So how have we done? Are we at least treading water?

Cash

Our emergency fund has dwindled to a little below where I would ultimately like it and sits at about 2 months of spending (the goal would be 3 months). Overall we are still holding $28,000 more in cash than when I started.

Investments

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