DDDD- Dialing down, deleveraging, diversifying...

[Rummy]

Congratulations, glad the family is well.
Back in 1951 I was a month premature too.
When cleaning up the homestead for the estate sale, I found my hospital bill.
31 days hospital room charge @ $1.00/day
3 days in intensive care @ $9.00/day
And $2.36 pharmacy charges (I joke it was for the bandaid to cover my circumcision)

Times sure have changed.

 

[Katiek]

Congrats on all the good news!

 

[MBAustin]

Thanks for the update and congratulations on all fronts!

 

[wandering]

Congratulations, glad the family is well.
Back in 1951 I was a month premature too.
When cleaning up the homestead for the estate sale, I found my hospital bill.
31 days hospital room charge @ $1.00/day
3 days in intensive care @ $9.00/day
And $2.36 pharmacy charges (I joke it was for the bandaid to cover my circumcision)

Times sure have changed.

That is wild! I am sorry I am just now seeing this post. I can't believe how different the pricing is these days haha

 

[Doc0]

Here is a different way of looking at a JOB... consider it diversity in your life and your families life. Diversity is a means to reduce risk, improve performance and self worth as well as net worth. Do not under estimate it's value. Your arguments against having one (a job) are just arguments. Jobs also often lead to other opportunities, possibilities, training and networking especially for someone who considers himself a entrepreneur. A little bluntly put, but it's worth taking a crack at the denial.

I went to medical school back when student loans were 18% and required immediate management or you'd be looking at half a million debt compounded. Tuition cost was doubling every year. I had saved 4 years of tuition working as an engineer but my plan was soon overwhelmed by these problems, so I went into the Navy trading my future service as an active duty Doc for no debt. I didn't really want to go in the Navy, but in the end it worked out much better than I could have ever imagined for all of the reasons listed above, and I'm glad I went and was able to serve. Once I got out, not being in debt made all the difference in being able to pick and choose how my future unfolded, aka diversity.

Best

 

[wandering]

Your arguments against having one (a job) are just arguments....it's worth taking a crack at the denial.

This is really helpful feedback! I think there is something here... there's a resistance, an unwillingness to compromise, etc.

I have some people give me feedback that this is a strength of mine, and is part of what makes me entrepreneurial, but sometimes I'm blatantly staring at that "Flip side of the coin" (weakness) where I'm thinking... nah, I'm just stubborn.

I appreciate that you see *something* here, and this morning it helped humble me, instruct me, and open me to new diversity and experiences (like what you are ultimately encouraging me to do).

I really, really appreciate it.

 

[Doc0]

From what I've read of your story you stepped up big and deserve kudo's, and it's excellent you've been able to be there for your wife and kid, and build a money machine, but I see big risk.

You have basically built a money machine based on leverage and it behaves like an engine with multiple cylinders all happily firing away, what happens if a cylinder blows up? Imagine you rent to a couple chemistry majors who decide to extract some hash oil from some stems. This is done by soaking the stems in something like butane, and then slowly letting the butane evaporate. The chem majors understand chemistry but not fire safety because they are only 20 and cocky as hell after all they are going to be doctors, so your house explodes... does your insurance cover that? Unlikely without hot and cold running lawsuits. What happens to your cash flow? Another example, you're a land lord in Houston last week the money machine was working fine, this week.. (I live in FL and am very familiar with hurricane recovery) Not to freak you out, those are worst case to your finances about the same chance as winning the lotto, but at some point someone does win the lotto. A job is like insurance.

It's just how my perverse little mind works.

Best

 

[wandering]

From what I've read of your story you stepped up big and deserve kudo's, and it's excellent you've been able to be there for your wife and kid, and build a money machine, but I see big risk.

Thank you very much

You have basically built a money machine based on leverage and it behaves like an engine with multiple cylinders all happily firing away, what happens if a cylinder blows up?

I removed the specific examples (they were well-imagined examples though) just for brevity.

In short, most of the catastrophic issues are simple to mitigate (to a degree) if you cover yourself well with insurance.

But this doesn't take away from your point in the least (RE: a leveraged machine that can collapse with a heavy wind). I still feel the stress of this at times, and the more rumors of a bear market I hear... the more nervous I get. So your point is still very well received here.

I'm not sure if I already posted this update, but in June I sold around 1/4 of the portfolio to deleverage. I am now sitting at about 73% debt to asset ratio overall. Solvency of ~8% Cash, ~3% notes receivable, and long term assets right around ~89%.

I feel much less leveraged but it's humbling to see I'm still at 73% debt to asset ratio...

 

[Doc0]

Keep in touch on the forum you have an interesting story, like to know how it works out

Best