With rising COVID cases, changing over of rotations, and all sorts of future-employment related emotional rollercoastering (mostly for Mr. Sparks with me along for the ride, and some for me), I had left my monthly net worth evaluations till mid-month.
And was pleasantly surprised. I had reached another milestone of FI!
To review quickly, here are the Milestones of FI, and where I found myself this blustery Sunday afternoon:
- Zero net worth: late 2018 – net worth of $5000 in January 2019
- 1 year of annual expenses saved: April 2019 when discounting 0% student loans, August 2019 by net worth
- $100,000 of net worth: November 2020
- FU money: 2-3 years of annual expenses: met for resident life, but uncertain if met for staff life*
- Half FIRE – 12.5x annual spend
- Half fat-FIRE – 16.5x annual spend
- Lean FIRE – all essentials covered, no treats
- Classic FIRE – 25x annual spend (a.k.a. 4% rule)
- fatFIRE – 33x annual spend (a.k.a. 3% rule)
There is an asterisk beside “uncertain if met for staff life” as, though I fully intend to live like a resident for the next two years (maybe with a tiny bit of give, in the spirit of the 10% rule), the real crux of the issue I’m uncertain what things will look like with other costs associating with starting the life of a full-fledged physician.
These include:
- Office overhead (which can be a significant portion of your billings, e.g. 30%)
- Office set up costs (e.g. furniture, potentially all sorts of expensive equipment)
- CMPA fees (the lowest being $967.92 and the highest being $70,452.00 for Obstetrics/Gynecology – ouch! – and median between $13,000-$19,000 annually by eyeballing the CMPA’s 2020 chart)
- Provincial medical association dues
- Provincial college of physicians and surgeons dues
How Did This Happen?
- Continuing to save and invest with every biweekly paycheque
- $10,000 of this boost came from dabbling with life cycle investing, using my (previously) fully paid down line of credit. Thank you to the FI Garage guys for going over this concept in their Episode 34: Leverage as a much needed nudge to revisit borrowing to invest. Look for an upcoming post about this in more detail.
Until next time,
-Dr. FIREfly
I love your milestones! Just discovered your blog and am also trying to work toward them. It seems like you have a big jump between this one and the next one – are there any intermediary goals that you’re setting for your own savings? Congratulations and thanks again for sharing!
Thanks for dropping by, FraidyCat! Really interesting question. I don’t have any intermediary goals. It’s a very unclear financial landscape ahead, as there will be a move to a different province, and a job change. Transitioning to staff physician life will mean higher pay (but given the pay structure of where I’ll be headed, also more fluctuating in amount from month to month), but also more overhead cost and more taxes. I think it might take a couple years before I have a sense of how much to expect to make annually. Also, it’s also within the next two to three years that Mr. Sparks and I will likely be buying our home (he is firmly in the homeownership camp). Those are all numbers that I don’t have any sense of yet, and will impact the ultimate FI/RE number. All I know is that I will do my best to keep spending low yet comfortable, and continue putting dollars to work in investments every paycheque 🙂
Would love to hear your thoughts on intermediary goals that would make sense between this current milestone and the next!
Another cool milestone is “Coast FIRE.” Roughly, it seems to mean that you can stop saving for “typical retirement age” (however you define this). The idea is that you leave the money invested for the long haul, and just work on maintaining money cash flow. This could allow you to scale back in hours / work intensity. For my household, the greatest line items are: taxes, savings, and charitable donations. Not having to realize the large chunk of money going to savings is quite liberating. (We’re actually still saving at about the same rate, but at this point, it’s about moving the “true FIRE” date closer to the present in case my work is no longer viable).
Keep up the good work.
Great point about Coast FIRE, Fringe Doc! Definitely merits a place in the Milestones of FI – I will add that in the next iteration 🙂 Wishing you the best with your FI/RE journey too! I am excited to be started as a staff physician in a few more months – I’m thinking that should accelerate the journey a bit!
I remember listening to your interview on Explore FI Canada – are you still doing the same work now as you were then? Hoping things on the work life front are going well with you! And that when you mention your work no longer being viable, it’s in the theoretical realm of things to prepare for rather than a looming possibility.
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