End Of The Year 2020 Review

End Of The Year 2020 Review

It’s that time of the year again. Time for an end of the year 2020 review.

2020 has been challenging and devastating. It’s been a whole year since this pandemic crisis started. And boy, does it feel like such a long year. It’s disheartening to hear so many stories of people losing their lives, their jobs, and their livelihoods.

Fortunately, with vaccines rolling out, there is some light at the end of the tunnel. Hopefully widespread vaccination will bring effective herd immunity and put an end to this terrible pandemic.

It seems totally unfair that the pandemic has been much more devastating to some people while for others, not so much. I am very fortunate that my family hasn’t experienced any negative consequences with respect to our health, finances, and emotional well-being.

There is so much I can update people on. But I’m just going to keep it relatively brief since each topic can be an entire blog post in and of itself.

Here’s my end of the year update…

 

Blogging Hiatus

It’s pretty obvious by now that I have significantly decreased my blogging output. I only publish a post once every month now, if that. It’s not for a lack of ideas; I have a ton of them. If you actually know me personally, you’ll know that I do plenty of interesting things in my life that I can potentially write about.

The thing is, blogging consumes a considerable amount of time and energy, resources that are fixed and finite. I highly value my time spent with family and I have been prioritizing selfcare and sleep. With the limited time we have we can do anything, but not everything. Blogging simply isn’t a high priority at the moment, so it takes a backseat.

 

Morning Routine Gratitude Run

As a part of my selfcare regimen, I have the same morning routine every day.

Every morning, I wake up early (naturally) and go out for a gratitude run. On these runs I express gratitude by saying out loud what I am grateful for. I also say some positive affirmations.

In the first 30 minutes of each day I accomplish so much by expressing gratitude, getting in some physical activity, while also enhancing my self-awareness and mindfulness.

Doing this every morning makes me feel like a winner every day no matter how tough the rest of the day is.

 

Work and Finance

So many people have lost their jobs. Even a lot of physicians have been either laid off, fired, or have seen a significant drop in earnings. I’m incredibly grateful that I don’t share this experience.

If anything, my pay has increased. I am doing the same amount of work as I did last year (maybe even less), but I am actually making more money.

Being a partner in a very large medical group practice provides a significant amount of career stability and flexibility. I feel so secure in my group that I never really have to worry about losing my job or having my hours cut. Freedom from financial worry is huge.

Some may say that I’m a high earning wage slave who is shackled to “golden handcuffs”. But I beg to differ. I am at a place financially where I can consider myself semi financially independent. I’m not beholden to any job or enslaved by any company or medical group. If I wanted to, I can leave. I’m financially prepared and ready to escape if I need to. Nevertheless, I choose to work because I love what I do and I enjoy the people I work with.

 

Investment Portfolio

My investments continue do exceptionally well.

Looking at my entire portfolio, my investment gains year-to-date is close to +30%, significantly outperforming the S&P 500 by more than double, which is only at +14.21%.

I have mentioned this before in my Mid 20202 Financial Recap, but there are there are two primary reasons for me outperforming the S&P 500.

Back in March, I tax loss harvested by selling VFIAX (the Vangaurd S&P 500 fund) and exchanged it for VIGAX (the Vanguard large growth fund) which has performed exceptionally well.

Another reason is that I have been relatively lucky picking individual stocks in my “play money account”. While the majority of my portfolio is in index funds, I allocate about 5% as play money for picking individual stocks. The high flyers in this account that have really outperformed include stocks like TSLA, SQ, and PTON. Because of the outperformance of this account, it now represents 12% of my overall portfolio (even though my contribution has been around 5%).

All of our investment accounts (including all retirement and taxable accounts) have increased in value by an impressive 1 million dollars after factoring in contributions and investment gains. That’s incredible! It’s amazing what a high savings rate and a bull market can do to your portfolio.

They say the first million is the hardest money milestone, then every million after that is easier. I now know what they mean. It took us about five years to attain a net worth of a million dollars. The second took a little less than two years.

 

Real Estate Investing

I am happy to announce that now I am officially a real estate investor.

While I do allocate a small portion of my portfolio to real estate in the form of REITs, it has taken me a while to invest in other real estate assets for several reasons.

First of all, real estate is a relatively illiquid. Until my wife’s loans are completely forgiven through PSLF, I prefer to keep a majority of our investments liquid in case PSLF is something we cannot count on.

Second, direct ownership in real estate can be a lot of work (I’m not looking for a second job), and expensive (you need a significant amount of capital here in Southern California).

Finally, there seems to be so many investment options out there that it can leave you with analysis paralysis. Sticking to what I know and continuing to invest in broadly diversified, passive index funds was the simple and easy thing to do.

Some time this year, I came to realize that my after tax, non-retirement investment portfolio was large enough to pay off my wife’s student loans outright while leaving a significant left for her early retirement if she wanted to. At the same time, I learned more and more about real estate syndications (through sites like Passive Income MD) and how it’s truly a passive way to invest in real estate. I just had no first hand experience with vetting sponsors of these deals. As luck would have it, a couple months ago, my friend Victor of 39point6.com told me he is co-sponsoring a real estate syndication deal. Since Victor is a friend who is very knowledgeable and trustworthy, I said “Yeah, sign me up!”

And that’s the story of my first foray in real estate investing other than REITs. I’m really excited about this syndication deal and can’t wait for the first investment distribution!

 

Minimalism: Minimal Gifts?

We are still relatively minimalist. And we are still frugal conscious consumers.

The only aspect of life and consumerism that we find challenging to completely minimize is gifts. This is primarily because it involves other people. Being relatively frugal and sensibly minimalist is easy when it just involves ourselves (me and my wife). We don’t really buy each other material gifts anymore. For special occasions like birthdays and our anniversary, we gift something unconventional or gift some kind of experience. Nothing material.

But it’s extremely hard to politely say “no gifts” from other people who are not truly in-tune with our frugal and minimalist lifestyle. This is especially true when you have a kid. Grandparents always want to spoil their grandchildren with gifts, especially during the holidays like Christmas!

Fortunately, my parents and in-laws understand our lifestyle values and therefore try not to buy too many gifts for our daughter. We try to compromise. One, or maybe two gifts is fine.

I’m not totally against gift giving. But it hurt to know that an estimated $16 billion is spent on unwanted Christmas gifts a year. The fact that most of these unwanted gifts end up in the trash is heart-wrenching and heart-breaking. Knowing that the cost of production of these gifts involves destroying natural resources and likely involves exploitation of cheap labor only to be discarded later  into the landfills is really sad. If more people politely refuse gifts, this wouldn’t be as big of a problem.

We live in an rich country where we can buy anything we want, whenever we want, and from wherever we want with only a click of a button. Since we can pretty much have whatever we want, the magic of receiving gifts has significantly diminished. Not only that, keeping unwanted gifts takes up precious space. For all of the reasons above, we try our best to politely refuse gifts.

 

Charitable Giving

While we generally say “no” to receiving gifts, we try to give generously to charity.

There are a lot of people in need who are struggling to put food on the table, so we have donated to various food banks.

Additionally, every year we donate to local animal shelters and farm animal sanctuaries. Charitable donations that improve animal welfare is a great way to make a difference in the world, at least according to the effective altruism movement. As an animal lover, these charities definitely align with my values.

 

Final Thoughts

This year has been a tough and challenging year for the world. But I have a lot of hope that 2021 will be much better. Last week, I was one of the first physicians in my hospital to receive a Covid vaccine since I’m frontline healthcare worker.

Having people vaccinated and achieving herd immunity is a step in the right direction toward ending this terrible global pandemic. It represents a glimmer of light in this long, dark tunnel. Perhaps this coming year, we can return to some semblance of normalcy. There is hope for a better future.

As always, every year, I try to become a better person each day so that I can be better at helping and serving others. I am still thinking of specific goals for next year to become even better. Whatever I come up with, I’m sure it’ll be bold and ambitious!

For those who observe and celebrate, have a very merry Christmas!

Here’s to a safe and happy new year!