(I wrote a version of the following for some of my friends and family this Thanksgiving and I thought some of you might be interested in it as well. I hope everyone has a lot to be thankful for this year! -- F4l) __________________ TMF Money Advisor
Can anyone be genuinely thankful for personal finance? I am.
A couple of years ago I was at the top of my game professionally. I had finally hit the big leagues (for me) in salary and stock options. Not being extravagant by nature, we had the luxury of having pretty much everything we wanted: living where we wanted, going where we wanted, doing what we wanted. In nearly every way that mattered to us, we had it made.
I did have a nuisance pain that was inconvenient and decided to have some outpatient surgery to correct it. Surgery was on Thursday, then I'd be back in the office on Monday--I'd be back before my voicemail could fill up.
But I didn't recover as quickly as expected. I was irritated I missed a couple extra days of work. Then one night I woke up screaming in pain. By the time I arrived at the emergency room, I felt like I was dying. Turns out I was having one of those very rare complications anyone can get from surgery and it was, in fact, nearly killing me.
I spent 4+ days in critical care and another couple in the non-critical ward. Much of the time I was drifting in and out of a morphine-induced near-coma. Even loaded up on morphine I knew I was in trouble the first time I opened my eyes and saw friends and family around my bed who had flown in that day. I had watched enough TV to know that same day travel meant they thought there was a pretty good chance I would die. Happily, I didn't.
So what does this have to do with being thankful for personal finance? Well, those 6+ days in the hospital--just the hospital --ended up costing more than $32,000. And we continued to get bills from doctors and tests from the hospital stay for literally another year, with the final tally up over $35,000. (How's your medical insurance?) My recovery was slow and painful, and I wasn't consistently working for 6 months. (How's your disability insurance?) During most of the first year after surgery, I had daily medication, weekly tests, and numerous complications requiring appointments with equally numerous specialists. (How's that medical insurance holding up?)
Now, I've heard the inspiring stories of near-death experiences being grounding and life-affirming events for people. Unfortunately, I was not that evolved. It terrified me. I now had hard proof that life was unsafe: random stuff could jump up out of nowhere and try to kill you. On top of all the physical problems, I was now paralyzed by fear as well. So off I went to therapy to combat the fear. (Still with me on the medical insurance or are you spending cash now?) And needless to say, I was worse than worthless at home.
An extraordinary burden fell on DP throughout my recovery. DP was with me 24x7 in the hospital. Luckily we had friends who cared for the house and the animals while we were at the hospital. (If you don't have friends or family, you're going to be paying money for these services--how are your cash reserves?) All of DP's existing vacation time from work was used up while I was in the hospital, but once I went home I needed DP with me so DP took another 2 weeks off work without pay. (Are your cash reserves hanging in there?)
Trying to work, care for me, and keep the house running was grinding DP down to a nub. Friends helped and we threw money at whatever we could to make it easier: meals, housecleaning, and laundry. (How are those reserves holding up?) Even so, after two months we decided DP would quit working until we could figure out which end was up with me. (Is your lifestyle lagging your finances so you have some wiggle room?)
My employer was very understanding and accommodating during my recovery. Luckily, I had outstanding people working for me who kept the group running in my absence, and I came back to all the responsibilities I had when I left. In fact, the day after I returned to work, there was a reorganization and my group doubled--my manager had been waiting three months for me to return before making the change.
Unfortunately, my body had 30 hours/week of stamina and my job had 70 hours/week of responsibility. With a lot of help from a lot of people, we made it work. DP continued not to work because I was still worthless around the house: I gave whatever I had to work and came home and collapsed. After several months, it became clear that my body wasn't getting what it needed to recover fully and my work responsibilities weren't getting what they needed to thrive. So we had to look at options.
Early retirement had always been a priority for us and we were allocating our money appropriately. (Are you consistently and proactively investing in the things that are most important to you?) But we had no intention of retiring until our 40s: why would we stop working at the top of our game? In fact, we weren't paying much attention at all to the performance of our retirement investments. (Are you regularly monitoring your investments and tracking their actual performance against your expected performance?)
At first, we couldn't tell if we had enough money invested to retire because we had never run the numbers or done the research. (Do you know what your magic numbers are for your most important financial goals?) Once we ran the numbers, we were happy to find out we could retire. So we walked away from the salary and the stock options, admittedly with numerous people questioning our sanity, and retired early.
Now, I didn't have a will/trust in place when I had my surgery: I had always assumed that everything of value had a beneficiary statement and I was too young for anything serious to happen. Once I got back on my feet, we went directly to a good estate lawyer. Found out a few interesting things. While everything of value did, in fact, have designated beneficiaries, not all of them had been updated appropriately when I submitted changes many years earlier. If I had died, DP would've had some nasty financial surprises. (When was the last time you double-checked your beneficiary statements?) And other investments were held in such a way as to leave DP with seriously adverse tax consequences. (Are you getting the consultation/advice of professionals when you're making major financial decisions?)
Admittedly, what happened to me was extraordinary: I never imagined I would have a life-threatening medical problem in my 30s. And my dentist probably never imagined he would have a stroke at 32. And when she was 35, our friend certainly never imagined that a neighbor would fall asleep in bed with a lit cigarette and burn both their houses down. And all those folks who had offices in the World Trade Center probably never imagined that 9/11/01 would be any different from hundreds or thousands of other workdays.
My point is that stuff happens. Hopefully it will never happen to you, but it can and it might. If it does, you will have a lot of worries and concerns. Do the things you can do now so you don't add financial worries on top of everything else. We were dumb lucky--I hope you're smarter than we were and rely on more than dumb luck for yourself. Set up your finances so that you can handle an emergency. Make sure you are adequately and appropriately insured. Meet with a good lawyer to ensure that your estate is set up the way you want it to be. That way, if stuff ever happens to you, at the very least you and the people you love can be thankful for personal finance, too.
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(I wrote a version of the following for some of my friends and family this Thanksgiving and I thought some of you might be interested in it as well. I hope everyone has a lot to be thankful for this year! -- F4l)
TMF Money Advisor