I have many money questions right now
November 28, 2016
I’m not trying to be pessimistic. I never have to TRY to be pessimistic, I was born expecting the glass to be empty and missing if I turned my back on it. This explains why I’m prepared for most wound care up to a broken bone.
Naturally that means I’m concerned about the state of the nation but also leaves me at a bit of a crossroads with our money.
I’ve got the usual conflicting goals of needing to secure stable income and preserving capital versus needing to use our capital to invest aggressively to grow our wealth while time is still on our side.
This is further complicated further by my family. No matter how much I resent the situation they’ve created, I can’t find it in myself to pretend I won’t care if and when Dad gets sick and needs better care than he can get from Medicare. I know Medicaid care. Mom had it and it was point blank terrible. She was miserable for far longer than she needed to be because they weren’t that interested in finding a diagnosis nor were they interested in treating her. They really just wanted to get her out of the office at each visit and didn’t ask even the most basic questions about how she was coping. She didn’t help matters by putting on a brave front trying to pretend she was fine but someone who is fine doesn’t have blackouts, six accidents in as many months because their vision blurred out or greyed out, or forget where they’ve lived for the past 15 years.
Needless to say, I expect Medicaid to be not much better for Dad.
Ponderable 1: This year I started moving a lot of cash into our investment accounts. I was also hoarding cash because I’ve been looking for another rental property. But with all the I don’t knowness in the world today, I’m not sure that committing us to a third mortgage sits comfortably. How much of a mortgage debt:cash ratio am I comfortable having? Not counting our brokerage account which I consider a long term investment, we’re at about 2.3:1 mortgage:cash right now. If I take on a third mortgage it would feel like a fairly large imbalance. Maybe the more important questions are whether the income that it will generate long term is worth taking on the debt, and whether we could bear up to a year of expenses (repairs, vacancy) without income in case of a job loss.
Ponderable 2: apocalyptic planning – as I’ve said before, I’ve friends who grew up in internment camps. This has and can happen again. With that in mind as a possible worst case scenario, it’s hard not to want to plan for losing everything including freedom despite it being such an major set of unknowns.
Ponderable 3: I have no idea how much I need to save in case of a serious illness and any long term care Dad might require. Maybe $250k? Should that just be considered a cost we deduct from our cash and non-retirement accounts? Probably yes.
Ponderable 4: How aggressively must I invest, and spread out risk, to achieve income replacement in ten years, given the other likely demands on our money? How comfortable can I get with that? And how likely is it that this Presidency will result in one or both of us losing our jobs? I think mine is more at risk but PiC’s industry isn’t invulnerable and our fields are small enough that a sharp contraction would leave a whole lot of us out in the cold.
Ponderable 5: Can we afford to add to our family any time soon? Going by JB’s costs, if we were to add naturally (if we could, and wanted to), childcare would add about $20k to our annual expenses, before food and anything else. If we were to adopt, those costs would be so variable it’s probably not worth guesstimating right now. Either way, probably no. And, dare I? It terrifies me even more now to imagine how we’d protect THIS child, if things go Deep South, and that’s with a two to one adult-child ratio. I had protective worries when I was pregnant before but they were run of the mill compared to now. I’m watching this irrepressible child and thinking back to the Diary of Anne Frank and shudder to think how impossible it would be to hide zir if it came down to that.
I have more questions but these are top of mind as I try to make sense of the hate and ugliness. A Jewish friend has had her car vandalized twice now since the election with swastikas and “Hitler” among other vile things scrawled across it. DT hasn’t even been sworn in yet and the repercussions of his hate rhetoric are affecting real people deeply.