Increasing the WORTH of nursing professionals

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July 2020 continues to remain an interesting time to pursue financial independence with COVID19 related US economy with high unemployment and a still fairly strong stock mark

I always enjoy seeing everyone’s financial independence “FI” progress updates. I am a nurse and now nurse practitioner on a journey towards financial independence, and I’m always inspired when I see everyone’s fi progress. I would love to see more nurses and nurse practitioners blog about their fi progress.

Net Worth FI Progress

We ended our last FI progress update with a net worth of $270k. We are ending July 2020 with an approximate net worth of $286K. This was an increase of almost $16k in 1 month after paying a hefty tax bill. 

July 2020 NetWorth
July 2020 = 16k net worth increase

Investing Progress July 2020

Our total investments increased $14,731 in July 2020. This was approximately 6.48% growth in July 2020.

$4,583 of this was from our contributions into our tax-advantaged retirement accounts. This means our investments earned $10,148 compound interest in July 2020. Compound interest is a powerful tool towards FI progress and motivating to see at work!

Our investment allocation currently is at 11% bonds and 89% stocks. We keep a super simple portfolio specifically we invest in an intermediate term treasury index for bonds and a mix of total US stock market index and S&P 500 index funds for stock investments. This essential gives us a minor large cap stock tilt. 

July 2020 Porfolio Performance
Blue Line = NurseWorth Portfolio | Orange = S&P 500 Index

Our portfolio performance was slightly better than the S&P 500 index due to dollar cost averaging retirement contributions and our bond allocation.

Side Note: Interesting Factor Tilting Stock Indices Discussion

As a side note, I listened to an interesting podcast at the White Coat Investor with Rick Ferri and Paul Merriman regarding factor investing or tilting your stock portfolio. Essentially they advocate for a small and value stocks tilt versus the S&P500. 

Practically a small and value stock tilt results in chopping up your stock portfolio into smaller parts with more types of index funds. It is an interesting concept, but I’m not sure I’m convinced it’s the optimal way to go. I look forward to part 2 of the podcast. 

Cash Savings Progress June 2020

In July 2020, we decreased our cash saving by -$5,776. This was due to a massive tax bill which was actually more than the $5776. Both my income and my spouse’s income offset an even larger cash loss deficit.  

Thankfully we budgeted ahead of time for the hefty tax bill. Having a budget and financial plan makes life much smoother.

We also actually saved an additional $4500 in July 2020 for a house downpayment. We hope to buy a house in the next 1-2 years. We also allocated an additional $1000 for our IRA accounts as well in July 2020. 

July 2020 Budget

Budgeting is a significant tool towards our FI progress. We do zero-based budgeting with YNAB, meaning we give every dollar a job. 

This doesn’t mean we spend all our money. It just means we allocate everything for specific tasks or goals. Our actual expenses and money outflow are listed rather than overall budget allocation or cash flow.

Our total expenses for June 2020 was $12,276.27. The majority of July’s monthly expense was our annual federal tax bill. Minus the tax bill, we spent $5,236.27.

July 2020 Total
Total Spending July 2020

July 2020 Expenses Minus
Total Spending July 2020 minus tax bill

Monthly Bills for July 2020

We spent $2,314.98 total for our monthly expenses. In contrast to June 2020 monthly bills, July’s monthly bills more accurately reflect our typical monthly bills. 

July 2020 Monthly Bills
Total Monthly Bills July 2020

Everyday Expenses for July 2020 

$2,192.42 was spent on everyday expenses. I subtracted out our Fun Money which included an epic skydiving trip to the tune of approximately $700.

$1,332.51 probably reflects a more accurate picture of our July 2020 everyday expenses. 

Groceries once again make up the main chunk of our everyday expenses at $454. We budget $375 every month for groceries so we’re over budget by $79. Food for celebrating the 4th of July and stocking the freezer with tons of meat for the summer resulted in a little extra spending than usual. My spouse is an amazing gourmet cook so no complaints here.  

We also drove quite a bit more resulting as we usually do in the summertime while camping, hiking, and going on road trips. We primarily drive a Toyota Yaris which gets pretty good gas mileage. We ended up spending $207 in July for gas which is $7 more than we budgeted.  

July 2020 Every Day
Total Everyday Expenses June 2020

Yearly Expenses for July 2020

July saw a massive tax bill which I’ve excluded as it will hopefully be an anomaly for this year only as I figured out how to estimate my W2 taxes for the future. 

Our main yearly expense is actually a semi-annual expense for car insurance for both the Yaris and the small truck we own. I usually shop around for insurance whenever a new car insurance renewal is due. Since our insurance didn’t really increase and we’re already paying significantly less than what we’ve paid historically, I decided to just skip the extra hours of car insurance shopping and pay for the 6 months coverage of $537. 

I currently have Vacation subcategorized under Yearly Expense. We spent $20 in Vacations for a quick trip to Colorado. We already had previously bought airline tickets but had canceled them for a credit back in February 2020. The $20 was the difference in price in addition to our airline ticket credit. We had free food, lodging, and transportation so it was a really inexpensive trip for us.   

Rainy Day Expenses for July 2020

We had to take $91 out of our emergency fund in July 2020 to pay for an unexpected traffic ticket. A red light camera ticket showed up in the mail. We appealed it for a reduced fee of $91 from $135. While we ended up paying a fee, we were able to save $44 by appealing. In the end, we had some leftover money in our budget which we transferred into the emergency fund which covered the $91 unexpected expense. 

I used to have an “unexpected expenses” category in our budget to cover miscellaneous or one off expenses, but I didn’t use it very often, and I found myself just transferring money for our emergency fund category to cover the unexpected expenses. This seemed pointless. The point of an emergency fund is to cover unexpected expenses both large and small, so I might as well use it. 

FI Progress Analysis

We continue to remain on track for FI in approximately 9.5 years. July 2020 was an interesting and somewhat unexpected month as far as FIRE progress. Most of our expenses were due to our hefty yearly tax bill which actually decreased our cash savings by -$5776.

In contrast to last month, the primary driver of our increased net worth was due to our investments with an $10,148 gain! In June 2020, the primary driver of our net worth was our income. This is a really awesome contrast to see! 

I anticipated minimal FI gains in July 2020 due to expenses but was unexpectedly rewarded with a $16k increase! 

2 Month Net Worth Update
2 month FI progress – June thru July 2020 = $28k increase

Our monthly spending minus taxes of $5,236.27 was slightly high, missing our target budget of $5000 per month spending. If skydiving was subtracted, we actually spent $4,536.27. This includes a 4th of July trip, a backpacking trip, multiple road trips, and flying to Colorado. I think this is money well spent while hitting our FI goals. I think our budget continues to remain well optimized with no excessive expenses.

July 2020 was an unexpectedly good month for us financially especially in the middle of a COVID pandemic with a funky US economy and high unemployment. We are blessed! 

We continue to cruise on our journey towards financial independence. A July 2020 gain of $16k towards our FI progress is right on track.

Our next stop is FI progress August 2020!

Please link your FI progress update in the comments below especially if your a nurse or nurse practitioner. I’d love to heard how you’re doing!

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