I'm taking the plunge, hiring myself...

So;

Another few weeks of deep reflection have yielded some movement in the retirement investing arena. I'm moving back to personally managing my retirement assets. Incrementally, I might add. 

The why's; I have always been somewhat uncomfortable with the cost of professional advisors under either commission or AUM methods of compensation. I just can't get comfortable with how much of the asset performance they charge. Recently, one of my advisors spun out of control, in my assessment. He blurred the lines between advisor, friend, potential business associate;  began "pitching" a new set of relationships, dangled a potential business proposition hidden behind an NDA, making me increasingly uncomfortable. In addition, he became difficult to pin down to an actual meeting. I scheduled and rescheduled, couldn't seem to capture his time. I looked carefully into what I was receiving in the way of management expertise, became convinced that I can duplicate this easily without a broker/dealer relationship and initiated transfer of my assets, notified him of my decision. Now, I'm just waiting for the funds to show up in my Fidelity account. The other half of my retirement assets are with another adviser, but with the identical AUM format. It's much easier to schedule time with him, but I'm not sure I am receiving any more value for the fees. So, we'll meet and review the whole situation in a week or two. 

Behind the why's;  in a few short years, I went from short on time/long on income to short on income/long on time. Asset management fees are costing at least 10% of my prior take-home pay after taxes and retirement account deferrals. I can no longer offset those costs with additional contributions, at least for the time being.  

What will I do with those assets?  I intend to remain fully invested, with a bias towards dividend/distribution paying investments, diversification across sectors, a modest, focused micro/small-cap exposure, tilt towards value versus growth, exposure to real estate investment. I'm going to look very hard for alternatives to a big position in bond funds to anchor the value against market corrections.  I want an average of 3% dividend yield, reinvested via DRIP, 12% total yield if possible, although I'll be satisfied with 7-8% with high quality companies. I have several reliable sources of research; it won't be difficult to sleep well at night, and I'll be paying myself between 10-20k in expense reduction. That's worth 80-160 hours of labor at my prior earnings capacity. We'll see if I actually spend that many hours managing/monitoring the accounts in the next 12 months. I'll do my best to avoid simply comparing total yield to big market benchmarks as a means of measuring performance. If I'm to have an income producing "business" whose capital assets are equities, I need to deliberately build that business and manage it according to capital value, income generation, expense control, reinvestment for growing income. I will have to become comfortable trading "advisory expertise" for investment of my own time/labor in running the business. 

Am I being prudent? Am I being impulsive? Am I responding to frustration/boredom? Is this "right" for me and my family? All good questions... right now, I'll engage with 50% of our retirement portfolio and reserve judgement on the other adviser pending our upcoming meeting. 

 

Courage, Change and other weighty concepts

 There are times and events in one's life that call forth the need for courage. Often, something has changed, is about to change, and a response is required that takes courage. For me, things changed when burnout/depression destroyed my career. In retrospect, things needed to change, I reacted poorly to the need to adjust to change and I was the architect of my own demise. So, the circumstances changed dramatically, and not in a way that I would have planned, had I been on my toes rather than on my heels. 

I didn't lack courage in the resistance to change. I put up a spirited, prolonged resistance. It wore me down, in addition to the usual daily burdens of a busy surgical practice. And, I lost the trench war. Then I lost even more. My alternative solutions also failed, for the most part. So, I went into hibernation. Now I'm out of hibernation, re-assessing every aspect of my life, my values, opportunities, ways to step forward into the future. Turns out, this takes courage as well. 

Courage and motivation go hand in hand. It's hard to show courage when one lacks motivation to take action. Sometimes it takes courage to sit on one's hands, let other parties show their hand, let transient things pass, not react to every stimulus. Courage may partner with patience too.  What are the values that drive deliberate and successful response to change? Let's give it a try...

1) Courage

2) Motivation

3) Patience

4) Persistence

5) Optimism

6) Humor

7) Self-respect, respect for others

8) Forgiveness 

Maybe there are more; I'll keep an open mind about this list. 

With respect to preparedness for retirement, its useful to think about what has changed, what remains the same over time.

What is the same?

    a) need/desire for security

    b) need for confidence in the plan

What has changed?

    a) expected "retirement" date

    b) lifetime earnings expectation

    c) personal/professional identity

    d) potential for further moving/downsizing 

    e) goals/aspirations in career/public life

One aspect of my current status of "in-between" is re-evaluation of my relationship to money, our accumulated assets, our advisors. 

I have allowed our insurance advisor to morph into wealth manager for roughly half of our retirement assets. I have split our corpus of retirement assets and placed the other half with another advisor. These  advisors both follow a similar model; they are brokers for other entities that actually do the investment management. So, what are the broker's responsibilities? There is certainly a component of attention to "comprehensive". How well that is done, how that fits the view of the customer (me) is part of the question. Have they heard me? Have they addressed/answered the persistent questions I have about the philosophy of managing our assets? Perhaps it would have made sense to split the assets a different way; i.e. use an advisor for Kathleen's accounts and keep my accounts "self-managed".  Or, search harder for an advisor with a style that synches with my interest/need for a hand in the architecture of the financial plan. 

What would I like to see in our investment portfolio? 

1) would like to see, clearly, the assets produce cash-flow into the accounts; that means interest and dividends. Since interest is nearly non-existent, it means dividends/distributions. I want to see 3-4% cash flow in distributions,  growing by 7-10% in dollar amount yearly. 

2) I would like to see diversification across asset classes, excluding bonds/bond funds/cash equivalents

3) I would like to find a suitable substitute for bonds, for the reasons they are normally included in asset allocation

4) I  would like to see certain principles applied in active management; attention to valuation, dividend policy,  a low beta, recession/correction resistant industry, etc. 

Is there something fundamentally wrong with either the asset allocations or the investment strategies of my current managers. No, not really. So, why am I vaguely dissatisfied with the arrangements I have. Partly, it's the nature of the relationship. I don't hear them thinking, I don't get to think along with them. There is less interaction/engagement than I'd like to have. There is an opacity to the whole thing that I don't like.

From a technical standpoint, I am continually losing access to the websites that record our assets. It's a username/password issue, and it's very frustrating. Also, the reporting on the websites is not all that easy to understand. 

So, where should I show courage and effect change? Do I simply demand more service? Should I seek out and hire a new/different advisor? Should I simply call the funds back to Schwab or Fidelity and save the advisor fees?

 

Independence Day?

 It's July 4; 

Thankfully, for whatever reason, I'm not hearing any noise yet to suggest to me or my hounds that random explosions could be occurring all around us. It's hot, dry and I live in a suburban forest, which could easily combust with adequate provocation. 

Independence Day; what does that mean, beyond the strictly historic definition. 

Are we, am I, independent? If so, from what?  Seems to me, I (we) are far more dependent, or inter-dependent than we are independent. As a nation, we boast of our independence. We crave it, believe in it, define our national character by it. But, in order to have a future, we'll have to embrace the fact that our border has little to do with what we need to do to secure a future for ourselves. The underlying forces that define the conditions under which we live do not respect borders. We are both dependent and interdependent on how we embrace changes needed to preserve a world in which we can all live.

An underlying theme of this series of messages has been financial independence in retirement. How sad it would be, after all this time and effort, if I could not support myself and my wife in retirement,  after we launch our son into the world in a very few years hence. 

In our working/producing years, we pay our way mostly by earnings, measured by the size of our paychecks. One goal shared by most earners is to earn in excess of one's basic expenses, so as to accumulate assets, or wealth. If one earns enough and socks away enough earnings, then retirement has far fewer worries. Most of us will not earn enough to put enough away in cash-equivalents to secure a 30+ year retirement. The excess earnings must also earn. Wealth generation is about owning a growing pile of assets. Security in retirement is about the ability to collect cash from those assets, or turn them into cash at a rate that will last to our last breath or beyond. That is financial independence. 

One can define financial independence as the point where one no longer needs to generate earnings by one's labor; i.e. the ownership of adequate assets that their earnings covers one's expenses. Buried under that simple definition are alot of "if's". One is independent IF;

1) Assets are larger than one's current and future expenses

2) Expenses do not grow in excess of assets and/or income derived from them

3) Timeline to one's own demise is equal or shorter than planned

4) One does or doesn't need or desire that assets remain at the date of one's death. 

Couples need to take "last to die" into account. Some expenses are fixed, others are variable, many tend to increase, at least at the rate of inflation if not more. The ideal wealth management strategy is to own enough assets of a sort that generate passive income, that those assets grow in value in excess of one's living expenses and the rate of inflation, so that one isn't tasked with accurately estimating the timeline to death. There's always philanthropy as a means of dispensing with excess assets when they are no longer needed. 

One needs to turn assets into cash flow when no longer laboring to earn wages. The dominant paradigm is to "invest" in a broad spectrum of asset classes, aim for the highest possible value, then turn assets into cash towards the end of life. A different approach could be to acquire assets that generate cash, hopefully growing amounts of cash such that one doesn't need to divest of assets in order to cover expenses. Personally, I like this idea far better than simply piling up assets. I would prefer to own assets that generate a growing stream of income. That's just me. I can choose to take passive earnings as cash to pay expenses, re-invest in additional assets, give away to causes that are meaningful to me, support my heirs while I am still alive, spend a little "mad-money" now and again. I'm past the point in life where I need to accumulate more stuff; in fact I need to steadily off-load the excess stuff I already own that doesn't enhance my life now and into the future. 

I have a wife and one son. For my wife and I, "last to die" is meaningful. Almost certainly, she will outlast me. We have accumulated enough assets to sustain us if we behave reasonably. She is substantially protected by a permanent life insurance policy I purchased many years ago which will substantially recharge her assets on the date of my death. She has a similar policy, albeit somewhat smaller, that could do the same for me if my life extends past the end of hers. We don't have the goal to turn our son into a trust-fund baby. Still, at a point further into his life, I'd like to relieve him of the worry about adequate retirement assets. That'll be the subject of our estate plan, provided residual assets remain after we're both gone. There are others we could also include in that plan. We both have siblings who have had less financial success than us. We have nieces and nephews, grand-nieces and nephews, eventually may have grandchildren. There are institutions to which we owe some of our success in life. 

I may re-enter the workforce, provided I can find an acceptable means to do so. If not, we have entered the consumption phase of our adult lives and must make our retirement assets work for us. This puts more emphasis on the nature of those assets; I fundamentally don't like selling assets to pay expenses. That'll be the subject of my attention in retirement investing going forward. I guess I should pay some particular attention to how distributions from our retirement accounts are taxed to understand the difference between dividends/interest and sales of shares/capital gains.

Here we are,  already at mid-year, a short 9 days from the official start of summer. I have been "awake" for 8 months, anchored mostly at home in pandemic associated isolation. Since being vaccinated in April, I am increasingly getting out in public and I've been engaged along several fronts in preparing to re-enter the public square. I have been paying more specific attention to retirement assets, due to my need to occupy my time, my lower overall income and a re-emergence of my interest in investing as a topic of interest now that I'm not working at a day job. So, I'm considering the possibility of returning to self-management of my IRAs. Why would I do this, having split our assets in half and employed two professional money management firms about 2 years ago?  

Several features of professional management don't sit very well with me. First is reliance of funds and funds of funds for diversification. I know this runs against the common wisdom, but even no-load low fee funds bleed off fees, and include low performers within their investment portfolios. I personally think that one can make choices amongst equities based on principal, which can better serve the individual investor's needs, even if the total return may be different (i.e. less) than indexed funds. 

Second, advisor fees. both of my advisors take approximately 1% of assets under management. That's with or without much work. 1% of assets under management is somewhere between 3 and 10% of total return/year. That's not peanuts. Over a few decades, the difference adds up to very substantial differences in overall portfolio performance. 

Third; the asset allocation models, even "aggressive" approaches, includes fixed income classes such as bond index funds, whose performance is currently pretty poor. I think there are alternatives that can provide non-correlated performance to the SP500 or total market index fund returns. In today's environment, holding assets in bonds is about like having a savings account. If inflation increases, interest rates rise and bond prices drop. Bond prices are unlikely to rise much further, as bond interest rates are near zero, so there's barely any upside at all to holding bonds. They are a "hedge against inflation" but don't do much to enhance portfolio performance. 

Fourth, I'm not a fan of harvesting dividends and selectively reinvesting them; perhaps it makes more sense in a fund-based investing scheme, since the investor can't adjust individual holdings weighting, but it tends to obscure the overall performance of pieces of one's asset allocation. When I own individual equities, dividend reinvestment is a decent fraction of an individual holding's performance, and it isn't obscured by purchases made from another holding's dividend payout. I much prefer DRIP investing, which allows me to clearly see total performance of a given holding. An increasing share count is very meaningful when one wants to build a portfolio that can produce enough cash to support distributions in retirement, and DRIP is a really good way to grow a position. Every distribution results in a larger position (number of shares) irrespective of what price is doing. 

 Building cash within a portfolio assists with rebalancing strategies which may or may not be on a quarterly basis, reducing the amount of buying or selling of equities to carry out the rebalancing. Building cash is also helpful if one is living off of distributions. Once one has a portfolio large enough to safely cover living expenses out of total return with some margin of error, precisely matching or beating the market is no longer so important, but it certainly is useful to attempt to continue growing the asset base, i.e. earning more than one is withdrawing. 

 I have some compunction about kicking the advisors to the curb; however I think there must be a compensation scheme that is more performance-based than AUM. Perhaps I should research that topic a bit before taking any major moves away from professional management. After all, I wouldn't expect any of the managers to switch to self-serve surgical care, and I am paid for my work, even if complications occur. I do my best and a portion of the outcome is out of my hands. Likewise the money managers...

I'll be revisiting this topic periodically as the months go along. If I'm successful in defining and executing on my plans for an encore career, the incentive to self-manage retirement assets could easily reverse itself again. 

What a difference a few years makes!

 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..!

Decending into the winter of 2019

The weather has turned. the light is short, the mornings cold, it's wet more than it's dry. I harvested the last of the tomatoes, ripe and green. A season has turned. A member of the family died the other day, my wife's father, a patriarch,  after 87 long years on this earth. He left modest material wealth, but had an out-sized impact on his family, among my wife of 20+ years. A transition into or out of this life is a time to reflect on temporal versus eternal values.  We are stewards in our time on earth; stewards of our relationships to others, of the material assets we acquire and cultivate, stewards of the efforts we make in shaping the world around us. When it's time to go, we don't even take the clothes on our back, rather leaving it all behind for others to carry on, to pick through, to discard. Much of the material items we collect are meaningless to the next person. A fraction become keepsakes to spouses, children and close friends. A bunch of what we have is completely replaceable, similar if not identical to something collected in the next house down the lane, and the next and the next. They are the tools and accessories of our lives, nothing more.

Financial assets can be closer to eternal, if memorialized carefully.  Wills and estates, trusts and directives can influence the world after our passing. In this case, a modest financial estate remains to K's mother to carry her forward. The investment asset allocation is diverse, with both income and growth, equities, bond funds and cash equivalents. It produces far less income than it could, looks more like an entity designed to be passed on to the next generation that used to sustain the generation that collected it. I have raised my concern about de-risking it into investments that have less reactivity to market conditions and produce more real and present cash flow. It will or will not happen, based on steps taken or not taken between the beneficiary and her children. I have said my piece.

The assets held by me and my wife are now 90% professionally managed. It was necessary, although painful to relinquish control, but now I spend more time working on other projects and less time obsessing over whether I have made mistakes in my thinking and strategy. I worried far more about what I did not know than what I knew. I am paying a good piece for the peace of mind, but the reasons for taking that step were sound.

The 72-t provision in the tax code allows one to take retirement distributions without penalty on a sustainable basis over 5 years or until after 591/2, which ever comes later. We're committed until 63 1/2. We'll receive 60k per year. it is dedicated to paying all insurance premiums, paying interest and principal on a secured line of credit, and then paying off consumer debt. At the same time, I now am employed and will be receiving pension benefits, a HSA account and the option to defer compensation if the cash flow allows. In other words, I'm back in the world of the qualified plan. That's a comforting place to be after 2 years where the tide was going out, rather than coming in.

Things are looking up on the employment front. I have been offered a very attractive 1 week/month opportunity to re-enter acute burn surgery in a "turnaround operation" in another state. I have accepted. There will be air-commuting. I just received an official offer to teach at the graduate level starting in July of next year, with the actual curriculum starting in January 2021. I have indicated interest in pursuing that position as well. I will have to drop something, as trying to do it all will have me over-subscribed, but this is akin to improving the quality of a portfolio by ranking holdings according to credit and debt ratings. I am trading lower quality activities for higher quality ones.  Quality and pay are not the same. I may accept lower pay for better work. Predictability, health benefits, retirement benefits and doing what I love the best are the markers of higher quality work. Pay is important, but secondary to those values.

I am onto a new value-generation plan with our real estate assets;  2 lots, 1 home, an unofficial accessory dwelling unit, an unofficial cottage, a yurt;  the new concept is constructing a compact residence on our second lot, moving in and then refitting the main house into 3 units; basement ADU, main floor dwelling and upstairs flat, extending over new garage.  I am guessing that would add another $500,000 in costs to the house, bringing the debt carriage slightly over a million dollars, but in return there would be 4 income producing units in addition to the main house;  cottage, ADU,  upstairs flat and second house on second lot. one could produce nearly 5k of cash flow per month without much trouble.  Carefully curated (single adults, older, stable income, quiet, etc), it could be an idyllic means to enter retirement with only modest carrying costs. We currently carry $2500 of $4000 in mortgage.  I would hope we'd carry no more absolute cost and a smaller fraction of the total, therefore adding value as renters pay down the debt. 5-10 years of that and we'd enter true retirement in a much more stable state. That's a fine vision, in my opinion, and we have the help we need to do that work; great architect in near retirement, great builder in near retirement, perfect property, house with good bones. What's not to like?

The Roth IRA is chugging along;  all dividend-growth, nothing performing at less than 10% per year and 3-4% DRIP, so the basis is expanding even as the valuations are increasing. I'd like to get back to maximizing the Roth IRA contributions as well as deferred comp, but we probably need more cash flow to do it. At this point I'm not willing to dial back my maker-lab business, which sucks cash at 6-8k/month. it's a huge drag on our spendable cash. It either has to convert to partial self support within another 6-8 months, or I'll begin to squeeze the burn rate.  As long as my health holds up, I'll be able to work at the current pace for another 5-8 years easily. that will take our son out of high school, part or completely through college and that'll be a time to consolidate assets and down-size our obligations considerably.

I'm liking the outlook, even if the economy goes south. We're in good shape to survive a down-draft at this point in time.

So, how's it feel?

3 months into the new strategy;

all I have left in my own management is my Roth IRA, with about $170k in equities. So, I check things far less often. I get periodic account statements from both of my money managers; about what you would expect. Not particularly informative data on the portfolios, have to drill down to see if anything of interest is happening. Most people want that; minimal interaction. I'm an odd duck; I really like the alternative focus of dividend growth, dividend and distribution payments, growth in free cash flow in the portfolio. That's far more comforting to me than watching valuations. On the other hand, I worry less with someone else calling the shots.

Our lives have changed dramatically;

now, I work on the road 13-18 days/month. I'm a glamper; drive the motorhome to the worksite, plug in and set up housekeeping next to the hospital. I get paid to be there, to work over and above the baseline number of hours that come with the contract. I get paid federal mileage rate to get to and from the assignments; about double what it costs in fuel. I get paid a daily housing stipend (average hotel rate in the community), sweetening the locums pot by about 10%. I spend a lot of time on my laptop, corresponding, catching up on reading, waiting for the ER to call. I deal with some loneliness, but more often I like the solitude. My dog, my wife, even my boy, perhaps, are happier to see me after I've been gone a while. And, I make better use of my time at home, knowing I'll be pulling out again soon.

Working 0.8FTE doing rural acute care surgery brings in about 2/3 what I earned as a full time (overtime, actually) burn surgeon. What's sweet is that my time at home is unencumbered by a call schedule. On locums, I'm on call, always. There's no ambiguity about my purpose. Also no commute to the hospital, because I'm there in the parking lot, or very close by in the neighborhood. Full water tank, 20 amps of 110AC power and I'm good for 10 days. At "home" in the RV, there's the radio, CD player, the computer, my ukulele/songboosks, the e-bike, walking. I don't turn the television on.

Our financial situation has turned around dramatically as well. After 6 months of no income and then 8 months of 0.25-ish work for pay, I'm up to 0.8 fte and rising. The pay rate isn't what I could earn as a burn surgeon, but no matter. We're covering expenses and making progress against debt accrued in the transition.

What did that transition entail?  in anticipation of my semi-elective/semi-compulsory retirement, we sold the trophy home, bought the rural enclave with it's lodge-style, venerable old and creaky house.
We remodeled the ground floor for the inlaws;  40k expense for 18k/year of household support; pretty nice return on investment in addition to the very important social benefits to them and us of having them under our watch in their dotage. Even in the 9 months that they've been with us, we can see the steady march towards full time assisted living. We put up the yurt for the maker lab (12k+miscellaneous appointments). We put up the tiny-house Cottage for my design studio partner (60k)

The scar treatment business cost 82k in lasers, $3500 in monthly expenses;  I think we're about half way to break even, maybe a bit further. I'm certainly not bringing anything home, but the clientele is growing by hook and crook. Lets say it nets me -2k/month. 

The maker lab is costing $7k/month, mostly salaries, and some supplies, equipment and IP costs. That's the big sucking sound at the moment, but I can see steady progress towards viable products.

With 10.5k business expenses each month and another 7k in bare necessity household expenses, there's my financial life. I have about 200 days/month worth of scheduled work in locums, should net out about 300k and with huge business tax write-offs, essentially no taxes. I'm about to sign on to a 0.6FTE direct contract that will raise my pay, add benefits and 10% contribution to a pension plan; a major step towards financial stability for us, albeit a bit of a long commute to central Washington for 10 days each month.

We have 60k coming out of IRAs to cover insurance premiums and payment on our secured line of credit, also paying down high interest debt.

Then there's the Untattoo Parlor, the most unexpected gift bestowed upon me by my late friend and protoge, GV MD.  I have much to be grateful for to GV, who was a friend to me from the day I met him as an intern, over nearly 20 years of friendship.  He was such a positive person, enthused about life and it's opportunities. He was the most encouraging of all my colleagues as I washed out of my high-pressure career. He invited me to join him in a joint venture, co-locating practices and was to also house the maker space and be one of the design studio customers for his hand-joint-replacement practice-to-be. When he abruptly died last year, he left behind a growing side-business in laser tattoo removal. I put my finger in the dike for his business partner/life partner as a stand-in medical director, and 16 months later, we are 30% owners in the business, also taking home salary(kathleen) and medical director stipend (Nathan) as well as collecting some surgical fees for earlobe repairs that come through that business.  We count 2k+ monthly against a 16k investment; a huge return on investment, in addition to satisfying part time work for Kathleen. This has made a vast difference in the tenor of our relationship at home, where money stress was causing great tension in the house.

The combo of 1.5k/mo household support from the in-laws, 5k/month in household support from the IRAs and another 1-2k/month from K's hours lasing tattoos pretty much pays household expenses now. My earnings cover business expenses, health insurance and some other miscellaneous costs. God has been good to us, giving us both the opportunities and the health and energy to be able to hold it together through some rough waters these last 2 years.

What do I look forward to?  As the laser scar treatment business grows, I'd like to travel a bit less to work. I like locums, don't imagine quitting any time soon, but collecting more work closer to home is a great advantage and I'm working on that. I look forward to seeing the laser tattoo removal business grow, and to co-locating the two laser businesses. It will make a great deal of sense from a labor and expense standpoint. We have every indication that our partner is a solid business partner and we have mutual dependencies that make the combo of these businesses a great fit.  I look forward to more activity with my university connections, designing widgets and working to get them into the health care environment. I look forward to more time to do medical missions work in Africa, Haiti, where-ever the opportunities take me.  I look forward to watching my son grow and thrive, to renewing the depth and breadth of the relationship with my wife as we get past the many distractions that this huge transition has put in front of us.

While it seems that I've drifted a bit from the primary subject of this blog, in fac, everything we are doing is directly indirectly about securing our financial future, just not solely in the context of salting away more cash in the IRA/ qualified plan realm. We'll get back to that task, but right now we're building value in our wholely and jointly owned businesses. More on all that to come...