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Financial Progress After 3 Years of Living Like a Resident

Given enough time, even pennies compound into millions.
We might not all have that kind of time, but the math checks out.

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.

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.

In year two, we began saving for a house downpayment in earnest, we benefited from an incredible market recovery after the COVID crash, and we continued to chisel away at our student loan debt. In the end, we increased our net worth by $322,000 for a total of $515,000.

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.


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The smooth ride of 2021 is also a thing of the past, and investors have been punished since the start of the year. The past four months have seen us essentially treading water, with the previous eight being responsible for any annual gains. Still, 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.


Credit Cards


We continue to keep our credit card spending on a short leash. You can see a few larger ‘hills’ in the past few months as we moved into and furnished our new home. But we continue to pay off our bills every month and don’t pay a cent of interest. This puts our current balance $17,000 lower than when I started working.




Loans are one area in which the slow and steady march has mainly remained undisturbed. I did choose to get rid of my wife’s loans at the end of last year, but otherwise, it is just monthly stair steps down. I am keeping my eye on interest rates, and if they continue to rise I may pay off our remaining balance sooner rather than later. We have demolished $170,000 in loans since I left training.


Home Equity


This is a new category since my last update. With 1 payment down and 359 to go, we are on our way to owning a home free and clear! I plan to update our home value annually at the end of the calendar year, but for now, it’s just our purchase price. Our total home equity has therefore increased by $635,000 minus $571,000, or $64,000 total.


Net Worth


So our net worth increased by $193,000 in year one and $312,000 in year two. Where have we ended up this year? Overall our net worth increased by another $282,000 for a grand total of $797,000 in three years. Greater than 50% of this year’s increase is from my inheritance, again demonstrating the tumultuous market conditions.

As you can see above, there are many ways to improve your financial standing and increase your net worth. You can save for a goal. You can invest in the market. You can clean up your consumer spending. You can pay off your loans. And you can purchase real property. The most effective plans probably involve a combination of several of these.

Here’s hoping that my fourth year in practice delivers another year-over-year increase. Who knows, maybe I’ll even be a millionaire.


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1 thought on “Financial Progress After 3 Years of Living Like a Resident”

  1. Dr Pay it Back, I’ve been following your blog / progress for a few years now since you’ve started posting. Keep up the great work. Posts like yours really can be inspiring for medical students, residents, fellows, or recent graduates who are looking to pay off their loans quick.



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