The biggest part of being financially successful (and perhaps the biggest personal motivation) was the opportunity to let my partner work my share of the night shift. The second best part was the opportunity to let my partner work on sharing my share in a few years. I’m currently only on day trips in the hospital, and almost all WCI jobs are done at bankers’ time. It freed my evenings and allowed me to live a “normal” life. This was out of reach of this emergency physician for the first 15 years of my career. I spend a lot of nights now with my family and volunteers, but I have quite a few winter evenings in ice hockey. I play for two men’s league teams and coach my son’s team.
There are several similarities between ice hockey and personal finance. For example, having a top-class goalkeeper is like having a very secure bond in your portfolio. It allows you to take risks in the rest of the game (portfolio) you could not afford to take otherwise. I’m a big fan of taking your risk on the equity side, but since I have a big “goalkeeper” in the form of very safe bond investments, such as TSP G funds, you don’t have to worry about illiquid investments, big volatility, or even serious risks of permanent losses.
You can draw another analogy with protective equipment. Ice hockey is essentially played while wearing body armor. I’ve been playing ice hockey for over 40 years and sometimes I had to replace some of that armor. In fact, I only have one protective gear that I have left since my high school days. They look almost like soccer-style pads and my teammates sometimes struggle with me with this antique gear.
These pads protect not only my shoulders, but my scapula, collarbone, humerus, and almost my thorax. This style of pad was really popular a few years ago in the early 1990s. So whipping them out of the bag and there are many questions about them. A recent trend is to wear small, revealing shoulder pads or shoulder pads at all in men’s league matches that you don’t particularly check out, so that players are lighter, faster and less restrained. However, I have continued to wear mine because of inertia and desire for “full” protection. This is the same reason I wear a full face mask.
That decision was recently paid off with spades. There were two serious clashes a month before I wrote this work. The first one included a pack directly between the other players and me. We both skated directly towards the pack and each other. I don’t remember which of us first reached the pack, but soon afterwards there was a massive, loud and shocking clash. The ice rink was silent. With the gear, we were probably over 225 pounds and both were skating at about 15 miles, so this was comparable to running on a brick wall at 30 mph. We both lay on the ice. The wind knocked me out and my rib cage hurts front and back, so it took me a long time to get up. I sat down with my hands on the team’s bench, only to get the referee skated and penalized. “Whatever it is,” I skated across the ice towards the penalty box, and sat there and held my breath. At that point I noticed that the other players were still on the ice. He eventually recovered and returned to the game, but it hurt a few weeks afterwards.
By the time I recovered from it, I got an edge at the end of the breakaway (no, I didn’t score), and smacked the side onto the board behind the goal. Once again, these large beef shoulder pads protected my shoulders and ribs. At that time, I didn’t even have to leave the ice.
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Now, for analogy. Protective equipment is similar to financial planning insurance. You don’t think you need it. You rarely do it. But when you need it, you really need it and do nothing else. You can’t say “I skate better” (self-insurance) or “it’s a non-check league” (it’s unlikely to happen) or “nobody else is wearing it” (it’s naked.” Having good gear is like having first-class disability insurance.
Interestingly, on the same day as that second collision, I discussed disability insurance with two colleagues with ED. My first co-worker had a husband who had cancer and was unable to work. He applied for SSDI as there was no disability insurance provided by the individual or employer. It took me a year to qualify, but even after qualifying, SSDI only retroactively paid for seven months that year. My colleagues thanked her for telling her to save money after recently realising the balance of the 401(k), but while waiting for the SSDI to pass, they had to be quite immersed in savings other than the 401(k).
My second colleague returned to dance to ED after six months. He had been in a terrible car accident, resulting in intracranial bleeding on a somewhat complicated course. In his case, there was a short-term disability policy offered by his employer. He was also surprised that his disability benefits had decreased as he qualifies for his automotive policy benefits. The accident wasn’t his fault, but the drunk driver who hit him had only the minimum insurance and assets the state needed. This kind of reduction is very common in group failure policies, but it is rarely present in high quality individual policies.
In both of these cases, disability insurance helped to ease the blow. However, in both cases, insurance was a soft, revealing variety of shoulder pads. A solid individual disability insurance would have paid much earlier in the first case.
People are always disabled. Documentation is no exception. I recently saw an interesting chart in the Guardian brochure. One of the partnerships could have been voided at some point in their careers. Here is the chart:
This chart is designed to show that one of them could be invalidated, but I think the chart on the left (two people) can be easily applied to marriages and other domestic partnerships. Essentially, there is a 17%-26% chance that either you or your spouse/partner will have a disability. That’s not a small number. If I go skiing is one of the four chances that I’m injured, I won’t ski at all. But that’s not an option when it comes to experiencing life. This huge risk cannot be avoided, so you need to plan to deal with it.
Here are four reasonably good plans I know to address the risk of a disability:
- I guarantee that
- I pray that your high-income spouse will be your disability insurance and that you will not be both disabled
- If you become disabled, you have very wealthy parents who will take care of you financially and pray that they will actually do it
- Be financially independent
For most early to mid-documents, option #1 is the best document. If you don’t have disability insurance yet or are worried, if you have a “scanning shoulder pad” type of disability insurance, you should meet with one of the recommended agents for an educational and overwhelming discussion of options.
I am actually impressed that few doctors buy disability insurance every year. With over 30,000 documents graduating from school each year, I expect at least half of them will need disability insurance, but my best estimate is that only about a third of those who need it actually buy it. Don’t be part of a 2/3 you think you’ll never catch the edge or slide onto the board at high speed.
What do you think? Why are so many documents moving forward without disability insurance? What is your solution to this risk?
