Today is Saturday, April 24, 2021.
I am opening my blog for the first time since 2019.
Really...
The last entry was in 2019. I can remember precisely where I was the last time I attended to this hobby. I read the most recent post. I had a plan, was executing it to my own satisfaction, and then life happened. Where do I find myself today? How does it relate to the original motivation and primary subject of the narrative?
I am in transition. I am re-examining ALL of the assumptions I acquired and relied upon to build the life and strategy for personal satisfaction with my career as well as financial freedom. To keep the interim story brief, it involves a personal breakdown, a mental health crisis and the long and winding path to get back to a place where I can function in the world. This all happened precisely concurrent with, but not because of, the COVID 19 pandemic. In early 2020, I hit a wall with burnout, then depression, and essentially "checked out" for 7 months. I "awoke" to find myself in a set of Depends and a Foley catheter, at home. I got free of the Depends and catheter, completed some intensive psychiatric intervention lasting all the way into February, and am continuing on a pathway of gradually reconnecting with family, friends, former coworkers and colleagues, carefully examining how I got to that place of incapacity and exploring "what's next". Enough about that...
Where does 2021 find us with respect to financial stability and independence? Many moons ago, starting in 1989, I purchased 3 consecutive personal disability policies. Together they add up to about 1/3 of my peak monthly take-home pay. They are sufficient to cover my mortgage, health insurance for my myself and family, and major monthly expenses. We are in the 3rd of 5 years under the 72t "early retirement distributions" or "equal and substantial distributions". My wife went back to work to cover a sudden and unexpected gap in staffing in our co-owned laser treatment business, has just dialed back from full time to part time after just over a year with her finger in the dike for that business, which motored through the pandemic-associated isolation of 2020-2021 with only a slight hiccup last year. In the current status, that business provides us with perhaps $4000/month of passive and active income. We are operating on a total of approximately $17,000 per month in cash flow, which is more than enough to meet all obligations. We carry just under $1,000,000 of total debt( ughhh..) and our retirement assets continue to grow even though we are taking 3% of the corpus in yearly support and our contributions have dropped dramatically since 2017, the last year of my burn surgery practice.
Where would I like to be? I would like to be debt free. I would like to figure out "what's next" with respect to dominant professional activity and income. These two are not necessarily directly related, but may be if the right opportunity(s) comes along. I am actively investigating options, but without great urgency, as being disabled from the standpoint of practicing general surgery has afforded me time to figure out how I'll use training, knowledge, experience and skills in something other than full time clinical practice as a surgeon. There are a number of things that I miss greatly about my former career and life, but many things that clearly contributed to exhaustion and breakdown, things I don't wish to carry anymore.
How has my personal experience, the performance of our retirement assets effected my attitude towards retirement investment? First; I could actually now "be" retired. I might "un-retire", but the right circumstance may not evolve to bring me back to earning a wage adequate to fully support our current obligations. Second; Our retirement assets have proven themselves capable of supporting a modest draw and have still grown satisfactorily. Third; nothing has changed with respect to the value of a dividend growth approach to equity investing. Will I return to self-directed investing. In spite of substantial management fees, it's not likely that I will fire the managers at this point. I have a Roth IRA still under self direction in a Fidelity account that doubles as an emergency fund, since I can withdraw from it without penalty or tax obligation if absolutely necessary. I did, in fact, draw on it when we loaned our business the purchase price ($55,000). The business is paying it back via a 5 year note at 6% interest.
For 22 years, I maximized pre-tax 401k investing. That asset now provides nearly 1/3 of our monthly net income. For 27 years and counting, I have contributed to a whole life policy that is now mature. Premiums are paid from the investment returns from the cash value. All insurance premiums are paid from passive income. The disability policies are paying the taxable equivalent of a 6 figure salary, projected to last until age 65 and beyond. The transition from savings contributions to savings distribution is a reasonably complex, unexpectedly early development. I believe I have 7-12 years of remaining useful professional life, health and motivation allowing. Sometime in the next 12-15 months, I need to figure out that issue, as it will directly effect how we behave once the 72t distribution phase comes to term.
Nothing has fundamentally changed in the mathematics of dividend investing with DRIP as a means of generating a growing flow of passive income. DI/DRIP survived and thrived through the Great Recession a decade back. We're in a hyper-growth, possible bubble phase on Wall Street, without any current sign of runaway inflation, YET...The government continues to spend our children's tax money, but the emphasis is on recovery from the pandemic and infrastructure investments, which are both good for the economy in the short and long term, as long as we keep a wary eye out for early signs of overheating and and inflation. My personal objective is to find meaningful public engagement(s) that allow, even emphasize, wellness as a primary benefit of the commitment. No nights, no weekends, health benefits and intrinsic joy in participation are the first screening factors in my search.
until next time..!
