Well, I am starting to see some signals that things might be trending back to the way things were. Slowly turning on the faucet, as they call it. It might take 6 months or even a year to get there, but things are certainly moving in that direction.
My state is set to slowly phase-in services starting May 4th. Healthcare is at the top of this list. Treading lightly will be key to our success.
By the same token, I am wondering what parts of our infrastructure have been permanently changed. Are one-way shopping aisles here to stay? Will masking be the new norm as we enter hospitals? Are haircuts a thing of the past? Hopefully, free lunch at my hospital is put into a new policy and procedure.
After a few weeks of adjustment, the Max Out of Pocket crew quickly adapted to the new normal. We have come to enjoy the slower pace of life. We did re-up our meat supply a bit this week after hearing from the Tyson Foods chairman that there may be supply disruptions. Mrs. Max OOP went to the University of Arkansas which isn’t too far from Tyson’s headquarters. She keeps an eye on what they say. We didn’t go crazy or anything, just 5 lbs of beef and a large packet of chicken. You never know. We have been pretty good at spacing out our trip to the store.
With that, welcome to the 9th edition of Max’s Back Pocket.
Max’s Back Pocket
Over the last several years, I have absorbed a ton of great content from a lot of talented people in and around the internet. Several of those ideas even got implemented into my personal finance strategy. Some of these writers are professionals, but a lot of them are just amateurs throwing their weight around in a random niche. I like to think I am pretty good at healthcare and personal finance, but there are plenty of people out there much smarter than me.
Up until now, most of these ideas just landed in my back pocket. There they would sit for my own benefit whenever I needed them. They were rarely shared or exchanged with anyone in my personal network. These days, that is no longer the case. Max will start scouring the entire internet for these ideas in a weekly effort to not only spread but recognize the wealth of knowledge that is out there. This weekly check-in will also give me an excuse to catch up on what’s going on around here more often. What are we calling this idiomatic experiment?
Max’s Back Pocket.
If you like personal finance stories with real numbers in them as much as I do, the folks over at Fire On The Plains shared their story in January. They started back in 2009 with nearly $130,000 in student debt. By January 2020, they were on their way to being completely debt-free with only $29,000 left on their mortgage. They also put up some serious salaries, blowing out the 250k mark by the end of 2019. Apparently, there is also a 1959 film called Fires on the Plain.
Mrs. Max Out of Pocket and I sold our house down south when we moved to New England a few years back and have been renting ever since. We have zero debt except for the 25-30 day “float” we hold on our credit card interest-free every month. I have paid this balance in full every month for as long as I can remember. We incur absolutely no interest expense on it. I would venture to say I have never paid a dime to the credit card industry in interest. Here is a look at how our “float” looks as of today.
I suppose our financial pick up on this is pretty immaterial since the interest rate on my cash allocation is so low. I guess in the long term, say maybe 1-lifetime unit, it adds up. It also helps us manage our cash flow and extends our emergency fund by about 20k. Note the $20,000 credit limit; a pretty solid emergency fund should we ever need it.
Careful though, you don’t want to “ride the float“. There is a simple test to know if you have fallen into that trap. The folks over at You Need A Budget do a great job explaining this. Are you riding the credit card float?
Still not sure if this applies to you? Here’s the test to determine if you are trapped in the float: If you can’t pay the credit card in full right now AND meet your current obligations, you’ve got debt. You’ve probably been riding the float.Are you riding the credit card float?
Here at Max Out of Pocket, we took a break from personal finance this week and checked on our options for telehealth. I basically broke everything down to video/audio visits, phone visits, and email/patient portal visits. I even disclosed the billing codes. Next week I am going to take a closer look at the billing and how it might impact our out-of-pocket cost calculation. Just another example of where healthcare intersects personal finance.
Healthcare can be hard to keep up with. The mind behind the Paradigm Shift of Healthcare is certainly making it easier. I like how they try to keep the politics and policy debates out of their content. In episode 37, they touch on responding to negative payment trends. In this episode, they bring on Dr. Tom Davis. He discusses telehealth, healthcare bailouts, and strategy for operating a small physician practice in the current environment.
Dr. Davis warns that although telehealth removes some of the friction from receiving care, it is not a substitute for an actual visit with your doctor and may further fragment the healthcare market. He also compares the 2008 bank bailout to the current situation in the healthcare market and references a “partnership” between health systems and the government. I personally think that’s a stretch, but I suppose I can at least see his thought process.
He warns that the landscape has changed and small clinicians are not only competing against health systems but also the government. Finally, he says payment trends are shifting incentives for performing procedures and thus moving dollars from primary care to specialty services who commonly perform procedures.
Mrs. Max OOP has been teaching her high school kids from home. It’s not easy, but she has been making it work. Apparently, that is nothing compared to homeschooling your own kids. Joe from Retire by 40 says homeschooling is hell! He is using this spring as a trial run since they have plans to take a trip around the world. This trip would theoretically force them into a home-schooling situation.
I suppose it is time for me to finish my coffee and enjoy the rest of my Saturday. The Max out of Pocket crew doesn’t have a ton planned for this weekend, but I am sure we will figure something out. We got some turkey eggs from a colleague at work, so I suppose that is next on the agenda. I have never had turkey eggs!
How was your week?