Thank God It's 2019

What a hellava year was 2018. I entered 2018 in semi-volunteer, semi-forced retirement. Burnout in all-caps. Silly me, even burned out, I made the common minimizing assumptions that surgeons do when it comes to their own limitations and vulnerabilities; "it isn't that bad, I'll be over it in a couple of months".

I didn't anticipate being out to pasture 10 years before standard retirement age. You don't erase 31 years of imprinting in 12 short months.

I was near catatonic for a couple of months. My first halting efforts and collecting myself and beginning to pick up the good pieces of my shattered career were met with an unexpected tragedy that re-set my course through the end of the year. However, I accrued 2 significant relationships as a result of that tragedy that could figure strongly in my future and they were entirely unexpected. They consist of the medical directorship of two small businesses relating to the treatment of skin with lasers.

I was able, with assistance of old friends and colleagues, to establish two start-up businesses. I was able, with the assistance of savings accrued over years, to achieve a major transition for my wife's parents, bringing them in from a remote community to live in an attractive apartment on our ground floor. By all measures, this has been a resounding success, reducing stress, allowing us to participate in their lives and vice-versa in their final decade together.

Due to the unexpected turn of the screw, one business is sited on my home property, and my business partner is newly domiciled in a "tiny house" cottage on the property, keeping business carrying costs to a minimum for that enterprise.

I was able to find a most ideal sub-let for my laser scar treatment practice, which is wheezing to life in spite of my 58 year-old antipathy for the virtual world in the form of EHR, Fax, LAN, VoIP telephony, and the integration of them all.  Best of all, I am coming to terms with managing a schedule internally and slowly losing the free floating anxiety of "where should I actually be this moment?; what am I forgetting?; I must be getting behind on something...". My cell is my pager and it almost NEVER rings.  I signed up to do locums and found out that the basic practice of surgery is still the beautiful thing it was when I started, devoid of any obligations beyond caring for patients and the rudiments of documentation. I hate to admit it, but being employed and not an owner of the enterprise makes surgery like going to summer camp. However, were I employed full time by a large corporation, I'm sure all of the S**T that drove me to distraction previously would magically reappear in the form of productivity targets, patient satisfaction surveys, "do more with less".

Money is tight. I eat what I kill. business start-ups are like baby birds; they eat a lot, they tend to poop in the nest (that's the mistakes I have made) and there is no early payback. I spent money in 2018 like a drunken sailor and earned a fraction of what I spent. However, this is a time where the old moniker "it takes money to make money" is absolutely true. The alternative would have been to simply find some uninspiring day-job, bring home a paycheck and lament the loss of the little autonomy I already had in my previous practice.

So, what about the retirement portfolio;  it peaked, just like everything else in this country with the "Trump effect" of tax reduction and general economic recovery, then it hiccup-ed loudly in the last 3 months, like every other market based portfolio in America.  I tapped my Roth contributions to the tune of about 60k for living expenses in the last two months of 2018 and we're nearly broke in January 2019. So, we tightened our belts, began making hard decisions on priorities, began liquidating non-core assets (there goes the convertible car-toy) and are making plans to survive to either profitability int he businesses or a more modest retirement than we anticipated.

So, we are consolidating all the accumulated qualified plans, supplemental plans from 30+years of employment into IRAs and pursuing the Federal tax code 72-t provision for taking equal and substantial distributions from our traditional IRA retirement assets for 5 years. We're both 58 1/2, so we'll obligatorily take those distributions until we're 63 1/2 under the provisions of the tax code.  This is what savings are for; to tide you over in times of transition or into retirement. Our emergency cushion was not adequate to carry us through this profound of a transition, but I think a professional advisor would look at our decisions and agree that they were overall a prudent course of action. If I could hit the reset button, i would have simply tackled some of it in sequence rather than in parallel.

I have decided to move the traditional IRA component of our assets into professional management, with a dividend and growth focus. We will deposit the distribution into a wealth management account, pay all life, disability, homeowners and auto insurance premiums directly from this account before accepting residual distributions for household expenses. This will take a great deal of pressure off of me to generate revenue while my businesses are becoming established. Because of the start-up costs and things like accelerated depreciation on equipment purchases, I will have plenty of tax protection for 2018, 2019 and perhaps beyond. I will be contributing fully to Roth IRAs, essentially moving 12k per year from the tax deferred to the tax free side of the IRA balance in a time when my personal taxes are about as low as they ever will be. This is a MAJOR silver lining in the cloud of reduced earnings during this career transition.

I haven't changed much in my portfolios. I sold some lower performing equities in my Roth accounts to take the previously mentioned distributions. I have slowly improved the credit quality of the portfolio, but only as much as was possible by adding new contributions. I don't tend to sell equities. I have mainly used purchases to nudge the portfolio one direction or another. I have used the brokerage synthetic DRIPS for all holdings. I suspect that the professional managers of our traditional IRA accounts will move to a selective reinvestment program, insofar as I will be drawing down these accounts to some degree anyway, meaning there will be trading activity

I may never "recover" if I were to compare uninterrupted earning power to retirement in my former career, versus what I will achieve on this higher-risk pathway I am on. However, the transition needed to happen regardless, as my spirit was withering in that place and there's no better pathway to an early grave than chronic unhappiness and unremitting stress. I dream a lot more, lately. I have more time for my son. My wife and I are working through the obligatory stress of living in the same space a much greater fraction of the daylight hours now. I had to pick up some domestic chores that were previously excused by my long work hours.

Although 2018 was a singularly complex and stressful year, alot of that stress was the "good" stress of repositioning our real and intellectual assets to better serve our goals, and having laid down a huge "bad" stress of the full time surgical practice. What I didn't anticipate was the effect of "anniversaries" on my state of wellness. Around both the anniversary of the decision to break the partnerships and then the date I turned in my keys, I fell into temporary funks that were pretty significant and lasted about 4 weeks each. I was blindsided by this phenomenon. I'm hoping it won't echo down the years over and over. I have thought on several occasions that it would have been better to set my calendar for a 6 month sabbatical and then pick up the pieces than the way I did it. Woulda, coulda, shoulda....

The blog continues to be a very personal effort, accessible with effort by the public, but without any consistent readership, which suits me just fine...

More to come,  when the muse finds me.