Stress Test Your Money

Every article I have written recently starts with one or more reasons why I haven’t been blogging much. We had a planned long vacation of two weeks. There are always a few days before the break for packing and putting our ducks in a row. Then there’s the catch-up time when we get back. It seems to be a good 24 days overall in total.

That’s if everything goes according to plan. Our tenants have had a lot of problems. It wasn’t an easy fix like a new appliance. It was pulling out internal piping and a fight with the condo board, another unit that was impacted, and a few other things. Then this whole thing needed to be repeated again with this same unit (piping affecting yet another unit). It got really complex with eight different parties involved.

During all this, we also had this happen:

He had some health problems when we left, but he still had a quality of life. He got a stroke while we were away, and it was time for him to cross the rainbow bridge.

The kids and I got back a few days before my birthday. My wife had some work on the west coast and came later. The government switched her flight back, and instead of coming in at 11 AM for my birthday, she returned at 7 PM. How do you honestly answer people when they ask, “How was your birthday?” and it wasn’t good?

I’ve started to feel better, though. The last few nights, I’ve watched the new HBO documentary George Carlin’s American Dream. It was hard to come away from that without thinking that he was the greatest comedian of all time. He had jokes in the 1980s and 1990s that are still relevant today. However, I have always loved George Carlin. I had been quoting him on this blog since 2007. When he died, I wrote a small tribute – one of the few times that I decided that I wasn’t going to write about money.

Some of you are thinking, “Cool life update, bro. *Click away*” That would be a mistake.

During all this, we never thought about money.

Vet hospital, how many thousands do you need? Plumbers and contractors, how many thousands for you? Disneyland, Universal Studios, Legoland, San Diego Zoo, how many thousands were you?

It all added up to a big number – more than five figures. We’ll have a couple of months of expenses like that because some went on credit cards and those bills come later.

I would have been crazy about such expenses seven or ten years ago. They would have been a disaster. However, my mental state was the exact opposite.

There are three big reasons why:

1. Our net worth is much higher

   It’s about 3.5x higher. Our house is almost paid off. (We could pay it off if we wanted to, but with such a low mortgage rate, there is no reason to.)

2. We have much better cash flow

   My dog boarding business is doing better than blogging was back then. The combination of the two and some other freelance work gives us an extra $50,000 to work with. My wife’s income has also increased substantially. The military does a good job at keeping up with inflation and going from “Year 16” pay to “Year 24” pay is a big move in the military charts.

3. We have much better liquidity

   When my dog business started to take off, I contributed more to our joint account. My wife started stashing cash aside for pre-retirement. That nest egg also serves as a short-term emergency fund for when stuff like this comes up.

   We also sold a rental property. We have invested most of the profits but kept $20,000 in cash. The plumber’s expenses come from this account, so we won’t notice it. For a couple of months, we’ll let the rents build this back up to $20,000.

Instead of being worried about this financial calamity, I looked at it as a successful stress test. We got punched in the face (financially), and we were able to laugh and say, “That’s all you got?” That gives me confidence that we’ll be able to handle much of whatever comes at us.

Of course, stress testing our money wasn’t plan A. In this case, we’ll take wins wherever we can get them.