The Wise Cracks Blog by Dan Otter



Fascinated by FI (Financial Independence); Worried about Healthcare

Having spent years abiding by the mantra of “save as much as possible in low-cost, diversified investments,” I hadn’t given tons of thought to the end game: retirement. This is ironic because as a teacher I subscribe to the backwards planning methodology where you begin with the end in mind. Maybe it’s a little bit like thinking about mortality. Retirement seems so final.

Over the past year, however, my attitude toward retirement has evolved thanks to tapping into the growing Financial Independence (FI) movement. These generally thirty- to forty- somethings have totally turned retirement on its head. They don’t save for years and hope for retirement at age 60. They “retire” at half that age. And they don’t use the term “retire.” It’s as antiquated as motorcar. Financial Independence to the FI crowd means choosing to work or not to work, and if the choice is to work, choosing the type of work.

Mr. Money Mustache

One of the pioneers of the movement goes by the name Mr. Money Mustache. He retired at age 30 with the not-extravagant-sum of $750,000 because he and his wife were starting a family. They got to this sum by saving close to 50 percent of their incomes and living wisely (low spending, short commute, rental property, and focus on happiness). His site is a wealth of information. I recommend starting with A Brief History of the ‘Stash: How we Saved from Zero to Retirement in Nine Years

Mad Fientist

Finding Mr. Money Mustache was like a gateway drug because it led me to the Mad Fientist (technically “FI”entist). He’s not angry or crazy. He and his wife are just young, financially set, and spend a good portion of the year living in Scotland (one of my absolute favorite places) and globe-trotting. His site provides a road map to financial independence through research and spreadsheets. And that’s the thing that is so great about these folks. They couldn’t be more generous with their help and support. They have literally given us the road map to financial independence.

The Millionaire Educator

One of the most innovative savers I have ever come across. He and his teacher wife routinely saved nearly their entire paychecks (sometimes more than $100,000 per year). He and his wife retired from teaching last year and now split their time betweent the United States and Mexico. He's also one of our favorite podcast guests (episodes #18 and #42). He also has a wealth of informative posts on this site

Our Next Life

An FI site I find myself spending more and more time at is called Our Next Life. It’s run by a couple currently engaged in high-pay, high-stress jobs. The site documents their countdown to retirement at the end of 2017 at the ripe old ages of 41 and 38. They have moved to a mountain town (Durango, CO?), are remaining anonymous, but are blogging about fascinating topics: What is work? When Friends or Family Don’t Support Your Early Retirement Dreams, and Staring Into the Early Retirement Healthcare Abyss.

Worried about Healthcare

This last topic — healthcare — has me most concerned. Donald Trump and Paul Ryan have tried, so far unsuccessfully, to throw access to healthcare into disarray. Each plan they roll out seems increasingly more awful. The Affordable Care Act (ACA) is certainly not perfect but it ended fear about access to healthcare for those with pre-existing medical conditions. It also capped out-of-pocket healthcare expenses, and it made it easier for those wanting to make the leap from working for someone to working for oneself. Here’s an idea: make the ACA (a.k.a. Obamacare) better. Allow people aged 55 and older to buy into Medicare. An infusion of younger participants will strengthen Medicare. And, oh yeah, allow Medicare to negotiate drug prices. Do you know that Congress bars them from doing this? I give Trump credit for at least bringing this up.

Donald’s Barack Healthcare Act

Many know of the awkwardly named Ruth’s Chris Steak House. Do you know how it got its name? In 1977, Ruth Fertel, a divorced mother of two mortgaged her home to buy the Chris Steak House, a small restaurant in New Orleans. After a fire destroyed the original restaurant, she reopend at a new location with a new name: Ruth’s Chris Steak House. How does Donald’s Barack Healthcare Act sound?

If It's Not Scottish It's Crap

Sorry to infuse politics and healthcare into a story about Financial Independence. But I wonder: Can you truly be financially independent in a country where access to healthcare is seemingly always at risk? Let’s face it, your choices today are:

  1. Work for an employer until you can join Medicare at age 65
  2. Save so much money that you can pay $500,000 for cancer treatment
  3. Hope that something like Obamacare remains in place
  4. Marry someone from Scotland (that’s what the Mad Fientist did)

I told my wife we should: divorce, each marry someone from Scotland, move to Scotland, get divorced, remarry, and stay in Scotland.

My worry is that my wife might really like being married to a Scot. She certainly likes the TV show Outlander. I have to believe a prime reason is Jamie Fraser (played by Sam Heughan). Heck, I would marry Jamie. Wouldn’t you?