Plan for Forever, Live for Now
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I have been thinking a lot today about this concept. A more commonly used phrase might be ‘hope for the best, expect the worst.’ This is an age-old principle on how to live life while still planning for the unexpected. When pursuing financial independence, many obstacles will stand in your way. Learning how to navigate around these obstacles, or power through them, is great! However, that is not the whole picture. Learning how to change your perspective is equally as important. Here we will talk about the best ways to plan for financial independence while still being able to live in the moment. Let’s plan for forever, live for now.
What is financial independence?
We talk a lot about the pursuit of financial independence (FI) here at The Motivated M.D. Recently we published an article called What is Financial Independence. If you are new to this idea, I suggest you stop reading here and head over to that article for further clarification.
Financial independence has garnered quite a following over the past decade. In a world that demands ‘more’ from you with each passing year, the idea of an escape has become more appealing. Having enough of a nest egg to tell your job to ‘shove it’ is a dream to many. Even more than this idea of ‘F you money’ is the concept of working because you want to, not because you have to. This is key.
The ability to control your work-life balance without the concern for income has alleviated stress and burnout in many who achieve it. This swell of individuals working, blogging, and living the lifestyle needed to achieve this is impressive. What many of these individuals know (quite well) is that the ability to reach financial independence takes dedication.
It’s a marathon, not a sprint
Financial independence is a marathon, not a sprint. Individuals who are seeking to finish reading this article and reach financial independence in the next few years are sorely mistaken. The ability to achieve FI requires living below your means, saving a substantial portion of your income, building an emergency fund, cultivating multiple streams of revenue, etc. This is no easy feat. Despite all of this, a lot hedges on a strong market, a steady income, your personal and professional health, and the ability to ‘stay the course. So, the first step to planning long term is creating a lifestyle that will place you on a path to success, slowly but surely; one that you and your family can thrive in.
I have previously written a few articles that can help you on your journey. One of these articles is called Emergency Fund: Your First Financial Goal. This is great for those looking for the first step to take on their journey toward financial independence. Another great article is called How to Write a Financial Plan. These posts will help you create a roadmap to your financial dreams!
Insure against disaster
For readers who are in the healthcare field…they know what I am about to ramble on. Sometimes being in the medical profession can make you jaded. We see tragedies walk through our doors each and every day. From bumps and falls to catastrophic injury and death. These are unfortunate parts of life. When thinking long-term, it helps to remember that you are not invincible.
To my young readers out there, it may seem like you are invincible… I too have suffered from a hard head. However, I am now in my mid-thirties with a wife and a child. The reality of my mortality weighs on me. Who will be here to take care of things in my absence? How could I protect my loved ones long-term? We don’t talk about this enough because it can prove difficult.
You need term life insurance
To cut to the chase, insure against these disasters. It is important to purchase term life insurance while you are working and building your nest egg…and while you are healthy! My hope is that each and everyone one of you reading this will live a long and prosperous life. In that scenario, you will hopefully reach financial independence and no longer need life insurance. It is not exactly a necessity if you have built substantial wealth, maintain a large emergency fund, and factor medical expenses into your budget.
You also need disability insurance
Another important aspect of thinking long-term is disability. Life insurance covers loved ones in the case of your untimely demise. However, there are other scenarios you must consider. These include not just mortality…but morbidity as well. Injuries and illness may not be life-threatening, but they sure can prevent you from working your day job. In these scenarios you need to insure against your inability to continue to generate income (both on the short term and the long term).
From a long-term perspective, long term disability insurance (especially if you are not financially independent) is vital. If you have suffered an injury that prevents you from working, then you need to have an insurance policy. An insurance policy that will continue to provide you a reasonable income reflective of your current salary. How do you do this? You need an ‘own occupation’ long term disability insurance policy. End of story.
Short term disability policy or emergency fund?
Another topic that is slightly more complicated is the idea of short-term disability. There are certain scenarios where you may be unable to operate in your professional role for a period. In regard to short-term disability, this is normally 3 months or less. This can be a surgery, rehabilitation, or even pregnancy in the eyes of some employers.
If you need a short-term disability policy, expanding your emergency fund is a consideration. I can see both sides to it. On one hand, you don’t have to continue to funnel funds into your emergency fund if you have a short-term disability policy. On the other, if you have a reasonably sized emergency fund (preferably 3 months living expenses, 6 months is even better) then you have a built-in short-term disability fund already. Being unemployed, or losing your income, is an emergency. In my opinion these funds would be appropriate to utilize if you think you will only be unable to generate income for a few months…no more.
Saving for retirement
Here is a no-brainer. You have to save for retirement. Everyone wants to spend their money. This feeling is shared by all. Most understand the feeling of money ‘burning a hole in their pocket’ all too frequently. We live in a consumerism culture (at least in the United States). Advertisements are shoved in your face constantly telling you to buy, buy, buy! Many deviate from prioritizing an appropriate amount of retirement savings for this exact reason. However, there is an easier way… automate it! Just completely remove yourself from the equation.
I have previously written a post titled Common-sense Principle for Building Wealth. Here I discuss many simple principles to create a lifestyle that contributes to success. One of the principles in this article tells you to ‘work smarter, not harder.’ Here I elaborate by discussing the process of automating your finances. This concept is also called ‘pay yourself first.’ Whatever you choose to call it, the idea remains the same. For things that are critical to your success and wealth long term, remove yourself from the equation. This really should include your debt repayment, your retirement savings, and saving for the sake of saving.
Your career should bring you joy
The last thing I wish to discuss in regard to long-term planning is career longevity. Being a physician, there are aspects of my job that I love and aspects that are quite difficult to digest. There is one thing that remains constant. I see my job as a privilege each and every day. Don’t get me wrong, I have worked incredibly hard to get to where I am. It still doesn’t change my perspective that what I do is a privilege. There are times that I get frustrated and have to remind myself of the good I am providing. I would argue that most have similar interactions with their careers. This is natural.
What is important, is that you are in a career that is sustainable for your physical, mental, and emotional longevity. The financial longevity will come. I assure you it will be exponentially more difficult to reach financial independence if you are unhappy in your career… damn near impossible actually. So please, heed my words when I say: make sure you work diligently to cultivate a career that is sustainable. Make sure you surround yourself with colleagues you enjoy. Make sure you find a purpose in the work you do, no matter how big or small. Maybe that is saving a life. Maybe that is putting food on the table. Both equally important…both equally motivating.
Live for now
I know how cheesy this sounds, but I say it nonetheless. Live in the moment. Bask in this beautiful time you are given. There is a lot that I want to say here, but maybe a story will say more.
Physician of the year
I recently attended an awards ceremony for the medicine department where I work. One of my colleagues was receiving an award for physician of the year. It is quite an achievement if you think about it. There are hundreds of physicians working in our program. Each of these physicians is working tirelessly to provide life-changing work day-in and day-out. All of them deserving of an award if you ask me. However, today it was someone I care for, which meant a little bit more to me.
Before the recipient was announced, a brief story was read by a care team member. This was the care team that nominated my friend for the award. I am paraphrasing here, but as I recall it the nomination submission read something like this:
“Our care team would like to nominate Dr. P for his exceptional work both in the ICU and on the transplant service. We all know the ‘rough around the edges’ nature Dr. P can show. To the untrained eye it can often seem like he maintains a healthy dose of separation from his patients. This could not be further from the truth. Despite the tough outer shell that Dr. P tries to maintain, he is incredibly kind spirited and caring. One particular day stands out to our care team.
There was a patient who transferred to our ICU from a rural hospital. She was critically ill following multiple injuries sustained from a motor vehicle collision. Because of multiple injuries to her heart and lungs she was placed on ECMO (this is essentially bypass). Dr. P spent endless hours at the bedside managing the patient; tending to the family as well. He would never hesitate to answer the difficult questions the family threw at him. He answered with honesty and transparency, even if it wasn’t what that family wanted to hear. As the days passed, she made no real recovery. Her overall trajectory was poor.
Unfortunately, she suffered a massive stroke. This was devastating for everyone involved. This patient was in the prime of her life, recently married, with children too young to understand. As the days marched onward it became clear that she would not survive this hospitalization. Multiple difficult discussions were had with the family. Always with Dr. P, always with patience and honesty.
Ultimately the family decided to transition her to comfort care, with the expectation she would pass. She had previously requested that she be an organ donor, and her family honored her last wish.
The day finally came that she was scheduled to be palliated in the OR for organ donation. The family was understandably distraught. The organ harvest was slated to occur late in the evening with all surgical teams standing by once the pt. was pronounced.
As she was rolling to the operating room, Dr. P, unbeknownst to anyone, had returned to be with family during this particularly trying time. Even though it is not standard, Dr. P arranged for the pt.’s husband to be allowed into the operating room. Her husband didn’t want her to be alone when she passed. Dr. P and her husband stood diligently at the bedside, her hand in his, until the moment her heart stopped beating. They took a moment of silence to honor her…and wept, together.
I wept too. It was a beautiful story. Despite it not having the ending we want; it was a beautiful ending nonetheless. An ending that teaches us a lot about humanity, love, and living in the moment.
Let us lighten the mood
Now that was a heavy story. It is not meant to be a tear-jerker, but I get it if you choke up. I did just by rewriting it. This story teaches me about the importance of being present.
It is very hard (in my opinion) to just ‘be present’ every day. Between the daily grind, the attention starved child, the needy dogs, the home maintenance, it is easy to get caught up in the routine of it all.
Fight back.
Take a moment each day to just be thankful that you are alive here on planet Earth.
Money isn’t everything
We spend a lot of time talking about financial independence, as I mentioned earlier. It is important. I emphasize this because I think financial independence can create a life where you are able to take more time for yourself. To take more time to enjoy the ‘day-to-day.’ Unfortunately, our professional arch is built to not make this attainable until our golden years. Some individuals are fortunate enough to achieve financial independence much earlier. To them I say fantastic…I’m trying to join your ranks! However, for the majority of us, we will be running this marathon for the foreseeable future. That is OK!
But don’t forget that while you are doing all of these incredible things to prepare for a future full of financial success and freedom; that future is not promised to anyone. Not even you.
However, you should plan for forever. And with a dedicated plan, a good career, some smart money management, and a little bit of luck, you will get there. But remember, each day is a step on that journey. While you are on that path, make sure you take the time to appreciate where you are and how far you have come.
You see those roses over there? It’s ok, go over and smell ‘em. As always…
Stay motivated!
The Motivated M.D.
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