I just turned 45 this month. Statistically, I have more years behind me than ahead of me. This means I expect a pass from younger readers (and sympathetic understanding from my peers) to indulge any overly sentimental writing impulses.
My dad has been on my mind a great deal recently. Specifically, due to the illness of someone close to me, I’ve been reappraising all the different stages of my relationship with my father over the years. I’ve come to realize that, using the lens of personal finance, my dad is in fact a volatile appreciating asset. Allow me to explain.
Coastal California is paradise for everything but your wallet. You can hit the waves and hike the mountains in the same day. World cuisines collide in novel deliciousness (LA's Kogi Taco Truck craze started when a Filipino-American chef who grew up devouring local Mexican food married into a Korean family). 13 years ago this month I had to dig my car out of snow to make it to my first date with my wife. We spent yesterday’s first date anniversary in shorts and sandals on the beach ten minutes from our home. It’s no surprise that folks want to live here.
Unfortunately, housing is costly, commutes can be soul-sucking, and many jobs offer lower salaries than other regions of the U.S. because employers feel the privilege of living here is a big part of your remuneration.
Given these realities, what unfair advantages can assist you in achieving Financial Independence (FI) in a High Cost Of Living (HCOL) area?
As a newly minted physician, you are presumably on an upward trajectory in career earnings. Any injury that limits your ability to achieve financial security needs to be covered by disability insurance. Some risk mitigation involves practicing common sense: no one will feel badly for a surgeon whose knife juggling hobby maims his dominant hand. But everyone will get a knot in their stomach if you develop lymphoma your first year working as an attending.
Disability insurance is intended to protect physicians from those forces beyond their control that threaten their income. I recently sat down with a newbie in my group, a motivated youngster with a kid on the way who needed a concise, "Tell me what to get and what to avoid, I don't have time to figure it out on my own."
Back in the 80s of my youth, I owned one black tie and it was razor thin. Frankie was constantly insisting I relax, and Time magazine was the major determinant of what a given week's father-son chat would be about.
As I write this, I've spent two of the last three weeks alternating shifts at the bedside of a family member in the ICU who suffered complications following a high-risk surgery. It's been brutal for everyone, most of all the spouse of the patient. This couple met in their teens, and just celebrated 51 years of marriage. The patient narrowly averted death twice, and has a long road to recovery ahead. The spouse spends from 9 to 11 hours a day at her husband's bedside.
A funny thing happens when you commence your education in pursuit of financial independence. Without realizing it, you begin to view other areas of life through the lens of finance. The insights into non-financial life might pleasantly surprise you.
Don’t Underestimate Life’s Value With A Disability
I wrote an essay in college exploring the ethics of using novel DNA screening technology to determine if a fetus had Down Syndrome. As an exercise, I tried to write it from a utilitarian perspective - how does one evaluate what does the most good for the greatest number of people? Was this a revival of the discredited eugenics movement, a failure to recognize the inherent value of human life and the effects such lives have on others, or a viable option for parents with a right to know?
My mom and perhaps the one other regular reader of this blog may have noticed I haven’t posted in a few weeks. December was a brutal month - my wife and I spent much of it either out of state in the ICU at the bedside of a critically ill family member or back at home indirectly supporting that family member from afar. I will be forever grateful to my colleagues who swapped shifts last minute to let me be present for my family. Following are a few reflections of this time.
Just as arbitrage deals with using inefficiencies in pricing to extract additional value in a financial transaction, ego arbitrage uses inefficiencies in the status of certain tasks or behaviors to create additional value (or savings) in your career and in your life.
It’s not at Vanguard. I was not an accredited investor at the time of purchase. And it’s beaten the S&P in value added every single year since I went all in. Trouble is, it’s closed to new investors. A recent thread on the WCI forum got me thinking about my single most important investment.