Why?

Multi-Level companies ask the important question that isn't always looked at from a job perspective or from a daily perspective.  I had someone ask me in passing what is the end point.  What is the goal and why are you doing what you are doing?  Not asking why I was a nurse but why I traveled and was spending time away from the family.  

I didn't feel like chatting.  I said so I can retire in 5 years.  So I can work less and spend time with the family.  I either compress the work down by working more hours, get a raise, or I live in a way that I don't desire.  This is why I do locums in big hospitals.  I get a large number of hours and call.  I have worked with these companies before and they know how I work.  I get paid pretty well.  This way I earn more than is spent... most of the time.  

Surrogacy and family building have been a focus of ours.  This has increased the debt load and thus I'm working away from home for a period of time to cover those bills so that credit card interest doesn't really cost what apps like Credit Karma would say it'll take to pay off debt.  

I'm also working on Taxes as I spent the money that came in and little things added up.  I don't recommend getting in as deep as I did.  It's a difficult hole to claw out of.  Every interaction and purchase needs to have a why.  To what end is this thing going to be of benefit.  What will this do in the coming days, weeks, months, or years.  So, I'm asking myself, as things come up, "why"?  

It turns out a year ago I would have sat down and bought a new laptop "for school" when my excel version didn't have what I needed and the computer was somewhat slow.  Today, I bought office but not the recurring monthly billing and not a new computer to go with it.  I dind't save 2000$ but at least I didn't spend it.  

My goal is to be working 1-2 days a week by the time Elizabeth is 5 years old and living about the standard of living we are currently living.  It's a challenge... especially when that is 3.5 years away. That means developing our spending in the right ways.  That means developing our business in the right ways.  That means finding my why for each thing I do.  

People wonder about the going back to school piece.  I happen to question myself a lot at the moment as I'm doing my most disliked statistics and algebraic equations course.  I love business and simple math.  I don't like big math.  I think I should be able to use a spreadsheet and be able to do basic math skills that most calculators can do.  Beyond those things.... there are applications and computers to help compute what might be needed.  I know someday I'll tell Elizabeth she just has to do it to advance to the information she needs to learn... so I'll tell myself the same.  But, school is costly right?  In this case I have the GI Bill and it wasn't transferrable.  It was to the time of use it or lose it.  This will allow a free education and allow extra minimal income toward bills.  It's a time loss though.  Sometimes, I wonder how I can fit it in.  I study and keep thinking I'll learn something that I can use in the future.  

Why is definitely a hard question when I have to answer why I'm away from my family. Why I'm working 60+ hour weeks.  Why is because we enjoyed life for years and now it's time to be ready for Elizabeth to have her time.  I want to be there for her school events, her trips, and her development.  We want another child in our family so that is part of why I'll continue this pace until all is done and paid for.  Then it's time to settle into life and have things set on auto for a while.  Work with a little family balance.  Tip the scales to the side of enjoyment. Bikes, hikes, and family time.  

So, Why are you thinking locum work?  Why are you afraid to travel?  Why are you doing what you are?  It's definitely worth finding your Why and what is the end point of it?

50% of CRNAs Are Going to Retire Over The Next 10 Years! The Hierarchy of Retirement Needs

Jeremy L. Stanley, CFP®, AIF® | March 23, 2018 (reposted with permission)  

Even though money is fungible, we often categorize our money into different buckets, be it by types of spending or time frame. We also tend to mentally prioritize our income and assets, focusing first on covering our current income needs, then to our existing assets, and lastly to our savings for future needs.

This may help explain why bucketing strategies have long been popular.

The Bucketing Strategy

In this strategy, a retiree household assigns one-third of its savings to equities, one-third of its savings to fixed-income investments, and another third of its savings to cash. Each of these “buckets” has a different function.

While everyone’s buckets will be different because every person’s risk tolerance and needs are different, the bucket approach generally features a bucket for cash and income, a bucket for assets or conservative investments, and a bucket for future income and growth investments.

Why the Bucket Strategy Can Help

Bucket strategies like this may help because they coincide with how our minds like to place our assets into different categorize. Most often, we tend to bucket our wealth into three buckets: current income, current assets, and future income. 

This can be helpful because, even if your money is fungible, you’re still likely to react differently if you feel your wealth decreasing in one of the buckets. For example, if you start to feel your wealth is shrinking, the first and most obvious step may be to cut back on current expenses. Or, one may feel dissatisfied with their wealth if they don’t have a reasonable amount of assets on hand, regardless of the size of their income.

Whether we realize it or not, this bucketing approach implicitly prioritizes current income followed by current assets and, lastly, future income. Generally speaking, people struggle to feel satisfied with longer-term buckets if the more immediate ones aren’t satisfied.

For anyone who took Psychology 101 in class, this may remind you of Maslow’s hierarchy of needs. Maslow believed people have a motivational hierarchy of needs that must be satisfied in a particular order, starting with physiological and safety needs followed lastly by self-fulfillment needs. 

In a way, the retiree has a similar hierarchy of retirement needs that he or she strives to fulfill in a specific sequence.

Fulfilling the Hierarchy of Retirement Needs

It may be helpful for retirees and pre-retirees to consider how they can tackle each level in this hierarchy. If we look at the figure above, we see that the first need to address is current income. 

It’s difficult to feel confident in your future retirement if you aren’t satisfied with your current income, which includes your spending cash flow, your paycheck, and any passive income. This means that before you can focus on your future retirement income, you need to have a handle on your current income and spending. 

Next, once people believe they have a handle on their current income, many want to feel satisfied with their assets, from their savings account to money market accounts. For many people, this may include their emergency reserve to cover any unexpected expenses they can’t comfortably cover with their paycheck.

It seems that only once people have a handle on their current and short-term expenses can they start to focus on and feel confident in their future income and retirement lifestyle.

What Does This Mean For You?

While everyone’s needs and level of comfort vary, this hierarchy of retirement needs may be a helpful guide as you think about your future retirement. 

When looking at these buckets, which concerns you the most? What is the first step towards greater confidence in your future? At CRNA Financial Planning®, we specialize in helping CRNAs plan for and navigate their retirement. Whichever bucket or hierarchy level is currently concerning you, we encourage you to contact us to see how we may be able to help. Call our office at 855.304.3748 or email inquiry@crnafinancialplanning.com. Or, schedule a free 15-minute introductory phone call now.

About Jeremy Stanley

Jeremy Stanley is the founder of CRNA Financial Planning® as well as CRNA Tax Associates®. He has been providing advice and guidance for Certified Registered Nurse Anesthetists (CRNA) for over two decades. As a CERTIFIED FINANCIAL PLANNER™, Jeremy has met rigorous certification and professional standards set by the CFP®Board. He is committed to adhering to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients. 

Jeremy is also the author of The Wealthy CRNA and A CRNA’s Life After Anesthesia. The Wealthy CRNA features insights into becoming a financially successful CRNA and how to start planning for your financial future, and has been prior approved for up to 4 Class A CE credits by the AANA. A CRNA’s Life After Anesthesia serves as your financial roadmap for a smooth emergence into retirement. It reviews recent changes in the CRNA industry along with the new rules of retirement and the final steps of legacy planning. This book has been prior approved by the AANA for up to 2 Class A CE credits. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

What about earnings?

What about earnings and potential earnings?  So, many offered the advice of... 

Selling off all assets in order to pay off debt and then re-buy assets.  

Selling the houses in a stagnant market that doesn't really go up or down would basically mean selling at a loss and then trying to re-buy them later as they are money making assets vs stocks or retirement which doesn't really make $$$.  Now, if you said take a leverage your IRA for a reduced interest rate that might make sense but I don't have enough in those IRAs to make it worth doing.  

The homes are a life insurance policy that my family would be ok if they had to go and return to a home and I died.  They would have money coming in for life that would ultimately cover the bills.  So, to sell them would give no piece of mind.  The life insurance would more than pay the bills and what's owed and they would be ok.  

The goal in going through all of this is to think about earnings as a 1099 and where the $$ go.  I may not have $200K in student loans but $100K in credit cards is pretty bad but not Rock Bottom as someone mentioned.  I say that because I have never been at the point that I can not pay the bills.  

There are some slow months that came in at about $10K for the month and having 2-3 of those months and not actively paying down the debt is what caused me the point of freaking out a little.  As a locum though, I know that if I'm willing to travel and work hard with a plan... I can wipe out most of this debt over the coming 6 months.  So, that is what I'm writing about.  I'm tired of not wondering if I can pay my bills... I'm just tired of having the bill altogether.  

I figured out the payment of the bills comes to just under 7K/month with the house-payment, rental payments and income not included as those are a long term play.  That doesn't include paying extra or paying much in taxes.  Sounds like a ton to those not sitting in the position that I can work hard and pay down over 100K in just about 6 months and be much more healthy from a balance sheet perspective.  

I have a monthly running total of debts and will be updating all of this over the coming week.  That said, I have paid in 9K to my Sep IRA this month, 10K in tax payments and 10K toward credit card debt.  That is substantial for being 2 weeks into the month.  As I continue down this path to financial independence... I don't expect it to be easy.  I don't expect to be blowing 10K here and there but making a concerted and real effort to be more responsible.  

With that said.  We are holding off on baby number 2.  This process will have to start over in 6 months as it is a 2 year process each time we do it.  We started the process and made a valliant effort with our surrogate without the agency fees etcetra. However, that attempt failed twice.  Had we been successful the $50K would have been well worth it.  Unfortunately, we did not have success and that means we have to stop, regroup, re-fund that savings.  We are not rushing into this and we are not trying to our detriment.  We knew that this was possible but we also discussed that had we failed we would have to take the time before starting over.  

I took the truck to car max and offered to sell it back but they took blue book value and slashed 20% off of that value and then offered that for the truck which would have put us at zero for the truck.  Then when I went back to wanting a truck I would have been paying carmax more for a truck in 6 months than I would have saved in truck payments and that they had offered for a smaller less equipped truck and so it was a better option to keep the truck and just continue the plan to pay it off after the credit cards.  

The house in Virginia.  We like the home and need a place to be.  We have friends in the area and it is central with good community and school for Elizabeth in the coming years.  It's not perfect and hindsight being 20/20.... I'd have done that differently but there isn't a way to sell the house and just go down the street.  We could rent it in a year or two and be just fine or at least break even but the family is happy there and I can hopefully get credentialing done and start locums in the future ... in that area.  Had the credentialing not been delayed for 5 months by ... I don't know exactly whom, I wouldn't have to be traveling away from family so much.  

So, maybe this helps with some insight into the thinking.  Honestly, this is so all can see the flexibility and ability to pay down significantly utilizing locums to do so. This also will show how in the future that debt pay down can then be used to advance my rentals and our savings to a more comfortable place and the same locum job used to bust my butt working.... can become an opportunity to slow down and be with the family as we grow the family.  

Have an amazing weekend and enjoy the journey!  I know we are :)