When I first stumbled onto the FIRE movement, I was lucky enough to discover MMM first, allowing me to really understand what the movement was about, and how to accomplish FIRE.  When I discovered the FIRE movement, I couldn’t read enough of the blogs, showing how different individuals from all walks of life, all across our country, had completed their FIRE journey.  However, the more I read, the more I questioned the validity of some of these claims, discovering some FIRE blogs to be exaggerated at best and fraudulent at worst.

Two blogs stick out to me in particular, although they won’t be named here, I will describe my experience.  The first blog claimed that a massive sum of debt had been paid off in an extremely short period of time, with a very limited income.  Although this article received national attention on a nationally recognized media site, it was obviously exaggerated, the math just did not add up.  There was no possible way that that amount of debt had been eliminated in such a short period of time, so I dug deeper and discovered that the massive sum of debt that had been “eliminated” was actually credit card debt, and they had included both the principal, and interest far into the future.  Basically, they included tens of thousands of dollars of interest they would have paid over decades on the debt but presented the article as if the amount of debt eliminated was principal only. Unfortunately, I have seen this particular issue more than once.

The second FIRE blog I discovered to be essentially fraudulent was one where a lady again claimed to pay off a huge amount of debt in a short amount of time, on a limited income.  Again, the numbers simply did not add up, and again this article was written on a nationally recognized platform.  As I read through the article, I saw the usual explanations for reducing debt such as cutting out subscriptions, vacations, and the usual suspects so to speak, when eliminating debt.  However, the very last explanation was what got my attention: the individual had used a large sum of money that had been in savings for some time, which turned out account for the vast majority of the “debt” they had eliminated.  They had not eliminated debt by working hard, or finding some new method of debt reduction, they simply moved money from one bank account to another.  

Another type of manipulation of the “success” of these FIRE bloggers is when they charge YOU for access to their “secret” pathway to FIRE.  It usually looks something like this: “For the low price of $99.99 per year, you can have access to my ten simple steps to accomplish FIRE on a budget,” or something like that type of advertisement.  What really bothers me and jeopardizes the FIRE movement is the fact that the majority of these blogs make money off of your subscriptions, while selling you a load of crap. When you really dig deep into these blogs, you find that the success of one blogger is due primarily to taking advantage of thousands or tens of thousands of people who are desperate for a way out of debt, and these people take from those who truly need to save every penny they can.  To add insult to injury, once these people discover they have been shafted, they lose interest in the FIRE movement, from being demoralized due to failure to obtain FIRE.   If they have such an amazing life, and have already achieved FIRE, why wouldn’t they share their ideas with you for free like MMM?? I do not think you should have to pay me a single penny, and that is why this blog will always be free to you, no subscription required.  My goal is truly your success, your financial independence, and for you to live a fulfilling, rewarding life, since time is our most precious asset.  It is an embarrassment to the FIRE community that some bloggers only claim to fame is generating website traffic for no real significant reason.

My advice to you while trying to sort through the mountain of knock off bloggers riding on the coattail of MMM is this: follow the money.  Follow the money both in the bloggers claim to fame, and how they make their money from their blog.  As with most things in life, if it seems too good to be true, it usually is and there is usually a catch.  Don’t be discouraged by fraudulent bloggers, simply ignore them.  Really research into the bloggers claims, and make sure they didn’t actually pay off that 50k of debt on a 50k a year salary, with a 45k inheritance from their rich uncle, then charging you $99.99 a year for the privilege of knowing this information.  Bloggers who have truly achieved FIRE will not be concerned with making money from you, but rather helping you achieve FIRE.  FIRE bloggers dependent on income from you, may not have your best interest as their primary concern.  Bloggers who truly care about the FIRE movement, and who it supports will be happy with the third-party income created by the blog and your individual success. FIRE bloggers who are more concerned with their bottom line than yours, are the single largest threat to the validity of the FIRE movement because their motivation is their own individual financial independence, not yours.  So save your $99.99, and put it towards paying off your debt, instead of making somebody else rich, and read my blog for $0.00.

On 11/22/2020 at 2:39 AM, we welcomed my third child and second son into the world in Ketchikan, Alaska.  Little Wally came about 1 week early, after shopping for Christmas presents for our other two children. Thankfully everything went well, and we were able to be discharged home 36 hours after the birth.  However, the costs associated with the labor, delivery, transportation, food, and housing for the delivery of our child is just another POS and example of why it no longer makes sense to try to get ahead in the United States

Living in rural Alaska means leaving our little town of Wrangell and heading to a larger town such as Ketchikan, Juneau, Sitka, or even Seattle.  Due to the excellent care we received with our first two children and the close proximity (100 miles,) we continue to choose Ketchikan for labor and delivery.  Local physicians require all expectant mothers to go off island at least 2 weeks before their due date as the facility isn’t equipped or prepared for labor and delivery, due to this reason, my wife packed up and left with her mother and our 18 month old, while I stayed behind in Wrangell with our 3 year old daughter.

The first expense incurred was the travel to Ketchikan from Wrangell on Alaska Airlines, coming in at 300.00 for my wife and her mother, as any child under the age of 2 flies free as a “lap infant.”  The second, and most costly part of the trip was the Air B&B that we rented coming in at 1600.00 for a 2-bedroom 2-bathroom apartment less than a mile from the hospital.  This was the cheapest option for a long term stay in Ketchikan.  The next expense was $1,000.00 for a ferry trip for our vehicle from Wrangell to Ketchikan.  Due to the high cost of taxis in Ketchikan as well as the high cost of renting a vehicle in Ketchikan, it was more cost effective to ferry our own car than to try to rent or use a taxi for the 2-3 weeks we were expected to be in Ketchikan.  Additionally, we were able to stock up on items that are much cheaper in Ketchikan and have them return to Wrangell in the car saving us money in the long run.  Next, we have flights for my daughter and myself down to Ketchikan at the expense of 450.00 for the two of us. Since she is 3, she requires her own ticket.  Finally, we have our return flights back to Wrangell which cost $850.00 for my wife, mother in law, our 3 kids and myself.  Now that we had 2 kids under the age of 2, we actually only purchased 4 tickets, with two “lap infants.”  Finally, we have the actual medical bills associated with the birth.  Although I haven’t seen them yet, we have the “Blue Cross Blue Shield Federal Basic Program” meaning the labor and delivery will only cost us $175.00 out of pocket, plus another $30.00 for the follow up pediatrician visit the day after discharge from the hospital; however this doesn’t include the 5386.16 I pay BCBS annually in premiums for the plan.  This sure beats the $6,000.00+ we paid out of pocket for our first child through the same insurance company, but that’s a topic for another post. So here is what our out of pocket expenses look like for the birth of our child:

1. Airfare: $1,600.00
2. Lodging: 1,600.00
3. Ferry/Ground transportation: $1,000.00
4. Hospital costs: $5386.16+175.00+30=$5,591.16

Total: $9,791.16 

 (food costs were intentionally excluded as we would still have eaten in Wrangell)

Now, for the comparison of what this trip would have cost us had we been on Alaska State Medicaid broken down by expense.

1. Airfare: Alaska Medicaid covers all travel for the patient and one escort to the nearest community which provides the necessary services, in this case, Ketchikan.  So, the initial airfare on Alaska Airlines for my mother in law, wife, and 18-month-old would have been totally covered by Medicaid.  However, I would still have had to cover my daughter and myself for airfare, meaning we would have had a net expense of $450.00 for airfare to Ketchikan.  The same applies for the return trip, which would have cut our return trip in half, for an additional $425.00 bringing total airfare costs to $875.00 out of pocket.
2. Lodging: Medicaid covers all lodging for patients and escorts in Medicaid approved hotels, which in the case of Ketchikan, just happens to be the same hotel we stayed at for the birth of our first two children.  So, in the case of lodging if we were on Medicaid, we would have a net expense of $0.00 on lodging.
3. Ferry/ground transportation:  Medicaid offers travel vouchers or taxi vouchers for all appointments and to/from your hotel meaning we would again have a net expense of $0.00 for our ground transportation as it would be covered with vouchers.
4. Hospital costs: Since Alaska State Medicaid covers all medically necessary expenses, our net expense for hospital/insurance costs would again be, you guessed it, $0.00!!!!

This brings our grand total for out of pocket expenses for the exact same procedure, at the exact same hospital with the exact same staff to a total of $875.00 through Medicaid , which is really only the airfare for my daughter and I to travel to and from Wrangell.  This is compared to the nearly $10,000.00 we actually spent out of pocket to have our child.  But wait there is more!!!!  Since my wife and I file our federal taxes jointly and are in the 24% tax bracket, we had to pay a 24% penalty on those dollars not included in premiums and medical bills since we have healthcare FSAs.  Simply put, we paid a 24% penalty on the 4,200.00 we spent on lodging and transportation that otherwise would have been covered by Medicaid, meaning we had to make over 5k to pay for these expenses.

Simplified: Expenses with Medicaid: $875.00.  Expenses without Medicaid: nearly ten thousand dollars!

What is written above is an actual real-life case study in why it no longer makes sense to work and try to get ahead in the United States.  This one procedure cost us nearly 10k out of pocket, and actually more than that due to taxation of our income used to cover travel and lodging.  I have no problem paying my “fair share” of medical expenses for my family and myself.  My issue is my federal and state tax dollars are used to pay for Medicaid for others, while excluding my family from the exact same program I pay for, simply because I work and pay taxes. It makes absolutely no sense that any individual would be forced to pay for a program for others, which they are then excluded from because they pay for the program.  Hell, even with Social Security we are at least told we will get access to funds in the future in exchange for the taxes we pay today. With Medicaid, you are guaranteed you will never benefit from the program you pay for, unless you get your MAGI under the threshold to qualify for Medicaid through the expansion program.  Exclusion from Medicaid is one of the biggest POS’s you will ever face, second only to taxation.  Unfortunately, this is just life in our quasi socialistic society today and will only get worse thanks to the “progressive left” in our society.  Liberals need to understand that somebody has to pay for all of their social programs, and the simple fact that somebody at my income level is beginning to do the math and discover it doesn’t make finical sense to work full time, it should be a huge wakeup call to our society: if it doesn’t make financial sense for someone making nearly 6 figures to work full time, then it definitely doesn’t make sense for anybody making less than 6 figures to continue to work in the traditional fashion.

How FIRE can be a cure for the mental health crisis in the United States

The first step on the FIRE pathway, is to admit you have a problem.  When I realized that I had a problem, and that problem amounted to over a half a million dollars of debt, plus interest, it was depressing.  It was depressing in so many ways. I can remember thinking that amount of debt was something that I would potentially never overcome, and if I did, it would take years to decades to complete.  When you realize how much of a burden debt truly is, you either ignore it which causes debt to continue to spiral out of control and make things worse, or you address it.  Either way, it is extremely depressing.  For those who choose to ignore it, many simply mask the depression with things like antidepressants, alcohol, shopping, trips, or multiple other things that defers attention from the debt they have while continuing to compound the problem.  For those like me who choose to address the issue head on, the feeling of hopelessness, knowing it will take years or decades to solve your problem, is overwhelming and depressing.  Exploring the link between debt and depression, is one major catalyst for writing this blog, as I think the link between the two is substantial and needs further research.  Hopefully, this blog can shine a light on a very dark subject and assist in acquiring the research and education necessary to help reduce the epidemic of depression in the United States.  

According to the National Institute of Health, Major Depression is “one of the most common disorders in the United States.” https://www.nimh.nih.gov/health/statistics/major-depression.shtml  Even more important, is the fact these numbers are based on individuals diagnosed with the disorder, and do not take into account the many people who go undiagnosed, meaning Major Depression could likely be the most common disorder in the country. Nearly ten percent of the United States population age 12 and older are currently taking antidepressants.  Furthermore, nearly ¼ of all women in their 40s and 50s are taking antidepressants, while there has been a 400% increase in antidepressant use since the early 1990s.  The most common reason for suicide in the United States is depression. The 6 major causes of depression listed by the CDC on their website include genetics, trauma, major life changes, medical problems, medications and substance abuse, but there is no mention of debt. https://www.cdc.gov/tobacco/campaign/tips/diseases/depression-anxiety.html These are just a few of the statistics available on antidepressant use and depression, available from websites such as the CDC and Harvard Health Publishing.  Unfortunately, there is very little evidence-based research on the link between debt and depression, but I don’t think it is a coincidence that the average household debt has risen along with rates of depression and antidepressant use.  In fact, when the research is completed, I hypothesize that debt will be shown to be the number one factor in clinical depression in the United States, thus debt reduction and elimination (FIRE) will be the number one treatment to treat clinical depression, not antidepressants and psychotherapy.  This is why the FIRE pathway, specifically the Financial Independence part of that equation, is so important and can be a lifesaving, or at least a life improvement treatment tool in the fight against depression.

Unfortunately, the United States sucks at studying the link between debt and depression.  In fact, the entire world does.  As part of my education, I spent years in college learning how to read, interpret, and determine if a journal article was statistically valid.  After spending weeks looking for a good evidence-based journal article on the link between debt and depression I could only find one article that was relevant, statistically significant, with good methodology.  The only article that was significant is a 2015 article out of the UK called “Does debt affect health? Cross country evidence on the debt-health nexus.”   https://www.sciencedirect.com/science/article/abs/pii/S0277953615000854 This article “investigated the relationship between aggregate household debt and aggregate health outcomes across 17 European countries over the period 1995-2012.  After collecting and analyzing the data the article found: “Our results also suggest that both short- and medium-term unsecured debt could improve the life expectancy and contribute to a reduction in premature mortality.  These results can be explained by the fact that greater access to short- and medium-term debt allows households to respond quickly to unexpected financial shocks, and consequently enjoy better health. However, long term unsecured debt and mortgage debt appear to exert a negative effect on health outcomes since this leaves households vulnerable to future income shocks and puts health at risk.  Policy initiatives that bring together healthcare professionals, debt advisers, and debt collection agencies to support financially distressed households may mitigate some of these aforementioned effects.(Clayton et all, 2015)”  So basically, the authors of this study researched half of the countries in Europe from a period of nearly 20 years, and found that long term debt, AKA your mortgage, has a statistically significant negative effect on your health.  They also theorize that collaboration between healthcare workers, and “debt advisors” can reduce some of the negative health effects of debt for these individuals.  In this example, “debt advisors” could easily be interpreted to be all members of the FIRE movement, and all of those who support what it stands for as we understand how financial independence can reduce depression.

In conclusion, through my decade of experience working in healthcare, I am certain debt has a negative effect on your health the only question is to what extent does it affect you. My number one goal listed for this blog was to “Increase the quality of life for all working- class Americans, thus reducing the epidemic of depression.”  Working as a single therapist in a rural Alaska, I have no chance of causing any significant change in how depression and debt are studied, and how depression is treated as a result of those findings.  However, one of my dreams, and my number one goal, for this blog is to gain enough attention at a national level to initiate the research necessary to first prove the correlation between debt and depression, and then treat depression through debt reduction strategies and FIRE, instead of offering a band-aid through pharmaceutical management of depression.  Although the CDC and NIMH don’t even mention debt as a possible cause of depression, I think that debt is the number one cause of depression in the United States, it just hasn’t been identified yet.  Unfortunately, there has been very little actual evidence-based research completed on the link between the two, and nearly no studies completed in the United States. I believe that instead of treating depression with medication and traditional counseling, treatment with debt reduction/elimination strategies such as the FIRE methodology will be the most beneficial treatment strategy to combat the epidemic of depression in our country.  Obviously, there are many other causes of depression besides debt, or even in addition to debt, but the link between debt and depression is obvious.  Circumstances vary, but I know that reducing debt in my household has significantly improved my mental health, and that of my wife, as we know in just a few short years our debt will be totally eliminated, and we will be financially free to enjoy our life, instead of worrying about our next paycheck to cover our mortgage payment when we are in our sixties or seventies.  We can see the “light at the end of the tunnel” so to speak, and we know we will reach it in our late thirties, instead of late sixties.  You only have one life to live, enjoy it and don’t let debt cause depression.  Treat your depression with a dose FIRE.

Why we withdrew funds from our 401ks to pay down our mortgage

Most financial advisors consider it voodoo to even contemplate early withdrawal of your funds from retirement for any reason, but these same individuals most likely wouldn’t have a clue what the FIRE acronym stands for, and they defiantly don’t understand your individual situation.  They will scare you with things like the dreaded “10% early withdrawal penalty,” higher federal taxes, POTENTIAL lost income from the 401k, and many other things to try to scare you away from considering early withdraw, however, I am going to explain to you exactly why that is BS and why you should consider withdrawing funds now to pay off your debt, specifically mortgage debt.  2018 offered my wife and I a unique opportunity to withdraw retirement funds due to a transition to a new employer, and we took advantage of the opportunity.  We withdrew $75,000.00 from our retirement funds, and paid down a third of our mortgage debt.  Below I will outline the reasons why we did this, and why you should consider doing the same to achieve true financial independence, since as long as you have a mortgage you aren’t truly financially independent.

1. First, 2018 was the first year of the Trump tax cuts, which lowered our highest taxable bracket from 28% to 24%, meaning we automatically saved 4% in this federal POS automatically, compared to if we had done the same thing the year before.  Love him or hate him, this change coupled with the doubling of the standard deduction meant we paid significantly less in federal tax dollars to withdraw the funds in 2018.
2. The dreaded 10% early withdraw penalty:  This POS is designed to dissuade people like us from taking early withdraws, by creating another discriminatory POS aimed at young people.  How this isn’t discriminatory due to age is the topic for another conversation about how POS’s disproportionately effect young people.  The irony of this POS is the fact that by trying to encourage long term savings, the government steals an extra ten percent of your income, in the name of encouraging you to save money.  Ironic isn’t it??  However, thanks to number 1 above, this penalty really isn’t 10%, its 6%.  I know it cannot be both, but either way you look at it, you are getting a 4% discount now compared to just a few years ago.
3. Taxes and “lost income” from your investments.  By withdrawing your 401k balance now, you are taking a guarantee compared to a hypothetical guess.  To me, a guarantee is always better than a guess.  As the saying goes “a bird in the hand is better than two in the bush.”  Remember, every brokerage has some disclaimer stating something to the effect of past performance doesn’t indicate future returns, and it is quite likely you could be left with a mortgage you cannot afford, while your investments plummet, just like many people experienced in 2008.  You are also guaranteeing current tax rates.  My tax rate for this withdrawal was 24%.  What if in 30 years when I withdraw from my retirement the tax rate is 50%?  Under those circumstances, I think taking the money now would be very beneficial vs waiting until retirement. As we have discussed before, my expectation is in order to pay for the many POS’s and constantly evolving socialized programs such as Medicare for all, Universal Basic Income, free college, and student loan forgiveness for all, tax rates will only continue to climb.  One of the few major strongholds of wealth left in this nation is found in 401k and other retirement accounts, meaning the government will find a way to steal more money from these accounts to pay for more POS’s.  As time progresses, I expect that the taxable rates on these accounts will continue to expand.  When your broker tells you that you will most likely have a lower tax bracket in retirement, they are basing their GUESS on current tax rates, expecting them to be the same 30 years from now when you reach the traditional retirement age.  I will guarantee that these tax rates will change over the next 30 years, and they will not be in your favor.  Taking the guarantee now does reduce your possible future income, but this is a hypothetical number, compared to a guaranteed number.
4. Mortgage interest savings.  When we did this, we owed around $200,000.00 on our mortgage.   A traditional 30-year loan at 4% interest on this balance, would result in a total of 143,739.01 in interest on the life of the loan.  However, by applying a 1 time $75,000.00 payment to the mortgage, you would reduce the cumulative interest to $40,401.02, for a grand total savings of over $100,000.00 in interest.  This is a GUARANTEED savings of $100,000.00, compared to a hypothetical loss of some unknown amount due to the effect of compound interest and future taxation.  This also cuts your mortgage in half from 30 years to 15 years, reducing the chances of losing your home to the bank for any number of unforeseen circumstances, by 50%.  
5. Financial independence.  By doing this now, you guarantee true financial independence in half the time of your traditional mortgage.  You guarantee a savings of over $100,000.00 over the life of your loan, but you also need to look at “societal norms” and how they need to change in the FIRE community. You don’t need millions of dollars in “retirement.”  In fact, as soon as you achieve a true worth of 0.00 by paying off your home, you have effectively reached FIRE. This is because now you only have to worry about groceries, since you no longer have to worry about housing and healthcare costs, since you now know how to qualify for Medicaid under the expansion program.  
6. Maximal 401k and IRA contributions.  Currently, my wife and I only contribute 5% to our 401k accounts, and do not participate in any IRAs.  The reason is we get a 5% match from our company for the 5% contribution, and we use the remainder of our income to pay off our debt ASAP.  As soon as we pay off our debt, we will be able to then max out our accounts, resulting in saving nearly $52,000.00 in IRA and 401K accounts, compared to putting away a fraction of that now.  Should we have continued with a traditional 30-year mortgage, this would have not only guaranteed losing the about $100,000.00 to interest, but we would not have been able to maximize our retirement contributions saving over $50,000.00 annually in retirement accounts alone, as our income would not have been sufficient to do both.  By doing this when you are younger, you guarantee that you will pay off your home soon enough to maximize your retirement contributions and make up the difference for the few years you only saved the bare minimum.
7. Peace of mind.  To me, this is the best thing about the FIRE lifestyle.  After all, we’re all here to find a better way to live life, and pay our bills along the way.  The peace of mind that comes with knowing in your 20s or early 30s that for the rest of your lifetime you will no longer have to worry about a mortgage or rent payment is priceless.  Since you don’t have to worry about losing your home to the bank anymore, it makes weathering changes in the market and in your retirement accounts much more manageable, and less stressful.  Because who cares what the market does when all of your monthly expenses can be covered by working part time or with a side gig since you have your housing and healthcare covered?

In conclusion, I think guarantees in the FIRE life are the best option over hypothetical rates of return.  Guarantees allow you to achieve FIRE, and maintain FIRE, regardless of market conditions or unforeseen issues such as COVID-19, and there are few guarantees in the financial world.  By taking money from your retirement accounts now to pay down debt, especially mortgage debt, you allow yourself to achieve FIRE with the peace of mind that you will have a roof over your head for the remainder of your lifetime, while eliminating one of the biggest monthly expenditures of the typical American family.  Additionally, you will be able to save more money in the long run, since you will be able to max out your retirement accounts, while having the peace of mind that should your retirement accounts tumble, your house isn’t in jeopardy.  Remember, you only have one life to live, so do what you can now to reduce your debt and enjoy your limited time with those you love the most.

Many, actually most FIRE bloggers I have followed preach the Bible of Side Gigs.  In fact, I cannot think of a FIRE blog that doesn’t at least recommend side gigs, with most pushing the idea, but following my FIRE pathway, side gigs are just something that actually will limit your ability to reach your FIRE destination.  Remember on my pathway, reduction of work is key to qualify for government programs, reduce your overall tax burden, but most importantly give you hours in your day to spend with the ones you love.  So let me explain the multiple reasons why you shouldn’t have a side gig, with one exclusion.

First and foremost, when I see FIRE bloggers push side gigs, or some who even explain their side gigs, they conveniently neglect to talk about the tax burden that should be incurred with side gigs.  My gut feeling is because many of these side gigs are actually “under the table” type of jobs.  Remember, one of the first things I ever talked about was how to do this process LEGALLY, and intentionally underreporting income is not only unethical, it is illegal and we want to complete our FIRE journey legally.  The last thing you want is an IRS audit into how you managed to pay off that massive amount of debt on your extremely limited income, a day I see coming for some fraudulent FIRE bloggers based on their claims published by nationally recognized news agencies. Good luck explaining to the IRS how you paid down more debt in a year than possible according to your tax returns.  As discussed in “Beware the Fraudulent Blogger,” the math doesn’t add up for some of these bloggers meaning either they aren’t telling the entire truth, or are hiding income obtained from side gigs both of which risk discrediting the FIRE movement.  

If you do a side gig legally and ethically, you will incur a tax bill, as your income in most cases should be subject to your federal income tax, FICA tax, and state income taxes.  This is a lesson I learned the hard way, which is why I will never have a side gig again.  When I first moved to Alaska, I decided to go into commercial crabbing as a side gig.  It seemed fun, rewarding, and people made tens of thousands of dollars in a few short weeks.  Not knowing the business side of the endeavor, I bought my boat, permit and all equipment necessary to fish, but I underestimated the true cost of completing the side gig until I sat down with my CPA at the end of the season.  I discovered that my side gig was subject to my 28% federal income tax bracket, FICA taxes, and a 3 percent fisheries tax, meaning I was paying a 46% cumulative tax on all of my fishing earnings.  Since I had taken depreciation, when I stopped fishing I then had to recapture those dollars, a process that took me 2 years to complete and cost me thousands of dollars in CPA fees and recaptured depreciation.  Remember time is your most valuable asset, and giving up time away from family isn’t worth nearly 50% of the income you could potentially make from your side gig.

Liability is another huge factor to consider when working a side gig, especially in today’s sue happy culture.  Working in healthcare and growing up on a farm, I worry about liability more than most people.  Let’s say you have a side gig flipping old cars.  Should you fix the car up and sell it to somebody who then crashes it a week later, you could be held liable for damages.  Even if you aren’t held liable, you could spend thousands if not tens of thousands of dollars fighting it in court, so to me, most side gigs aren’t worth the risk especially when all other POS’s are considered.  Stick with your primary occupation, in which your employer already carries the insurance for you, or make sure you acquire some form of insurance to cover you should anything go wrong with a side gig.  

Due to the progressive nature of taxes, the more successful your side gigs, the more it will cost you in federal tax dollars.  Your side gig could easily kick you into a higher tax bracket, while excluding you from programs such as the COVID19 relief checks, student loan interest deductions, Medicaid, and hundreds of other POS’S.  Since our goal here is to legally reduce taxable income while enjoying life, you should focus on increasing your happiness by doing the things you love with those you love in your free time, not working harder. With one exception, side gigs should be something that only exist after you have obtained financial independence, after leaving the traditional workforce, as a way to enjoy life doing something you enjoy.

The only side gig I will ever support before obtaining financial independence, and highly recommend is flipping your primary residence every 2 years.  Currently, you can buy a home, and flip it, and keep up to a half a million dollars of profits tax free!  This has been the best side gig I have ever seen on my pathway to financial independence.  Here is how it works.  You can buy a home and as long as you use it as your primary residence, you can sell it and keep all profits up to 250,000.00 for an individual and 500,000.00 for a married couple.  These figures are calculated after expenses meaning if a married couple buys a home for 250,000.00 and spends another 250,000.00 in remodeling and repair costs, they could then sell the home for 1,000,000.00 and keep every penny from the sale tax free!  This system is also prorated, so if you live in the home for 1 year, you can keep half of the limits, free of tax.  Since you need a place to sleep at night, and you don’t want to waste your money on rent, this particular side gig offers you a 2 for 1 deal.  This system is the only opportunity I know of where every American homeowner has the potential to make tens or hundreds of thousands of dollars tax free, while working a side gig that’s literally in their living room.  

In conclusion, remember that time is your most valuable asset.  You only have so much time on this Earth, and you need to spend it doing things you love with those people who you love.  You will never regret spending more time with family and friends.  One of the biggest complaints I’ve heard from nursing home residents over my past decade in the field is how they wish they had spent more time with family and less time working.  If you do a side gig correctly, its likely that you should be paying federal and state income tax as well as FICA tax. It isn’t worth your time to work hard then lose half of your earnings to the government so they can squander it, spend time with your family instead.   If you’re determined to have  a side gig, explore flipping your primary residence every two years as a way to both give you shelter, and make tax free dollars for your hard work.  If you choose another side gig, make sure to consider liability insurance to protect yourself and your assets.  Thanks to POS’s like our progressive tax structure, most side gigs aren’t financially worth your time, and you don’t want to draw the attention of the IRS for failing to report a side gig appropriately.  Remember the key to my strategy is to reduce taxable income to just under the thresholds for Medicaid qualification, and having a side gig will inherently increase your income, risking exclusion from the program.

How an emergency fund causes you to play the Russian Roulette Mortgage game an additional 5 years, while costing you nearly three times your emergency fund savings.

First, your debt is an emergency.  If you have any debt at all, especially mortgage debt, it should be viewed as an emergent situation that needs to be resolved ASAP.  Remember, the premise behind this FIRE blog is to reduce your debt to 0.00, as quickly as humanly possible so you can enjoy your life and qualify for Medicaid.  Most financial advisers, bloggers, and news agencies will preach the need for an emergency fund, but I do not think they are outdated.  Just like those who preached the necessity of college to achieve success without fully understanding the situation, I feel these analysts preach the need for a savings fund that is more detrimental than helpful on the pathway to FIRE.

Most advisors claim you need at least 3-6 months of cash on hand to cover expenses, in case of a job loss, disability or other unforeseen circumstances that would lead to your inability to pay your bills, but my belief is you need exactly 0.00 in your emergency fund, and here are the two reasons why.

First, as we have seen with the COVID-19 bailout of 2020, and the Emergency Economic Stabilization Act of 2008, should there be any significant unforeseen economic disaster, the government will bail you out.  This is an extremely dangerous road to travel, but its one that has been repeated multiple times over the last decade when financial hardship struck.  My theory is our government knows that so many people are overextended, they have no choice other than to try to bail out the masses in any financial crisis, or risk total collapse of our economy. Due to the way most employees are paid, should you lose your job, you will still have a couple of weeks before your last paycheck hits your account, giving you ample time to find other employment during normal times.

Second and most important, the long-term cost of an emergency fund to your FIRE pathway is enormous.  For example, based on a popular emergency fund calculator, I should have 20k in my emergency account for unforeseen expenses (I included my previous mortgage payment of $1200.00 monthly, to be more consistent with average mortgage costs, compared to our current butterfly loan payment).  Here is where the problem arises, the cost of holding onto that money instead of paying down mortgage debt, results in the emergency fund holder losing nearly 3 times the value of the emergency fund. This then requires them to pay longer on the mortgage, thus playing Russian roulette mortgage game far longer than necessary.  Here is how it works:  A one-time mortgage payment of 20k (the recommended amount of the emergency fund) on a 30-year, $300,000.00 mortgage at 4% yields a savings of $53,142.24 in interest, and over 5 years of payments on the mortgage.  So here is the million-dollar question or in this case $53,000.00 question: Does it make sense to save 20k now at 0% interest and hold onto it for 30 years in case of an emergency, or does it make more sense to take that 20k, and reduce your total debt by over $53,000.00, while reducing the need for the fund by 5 years?  To me your debt is an emergency, on the FIRE pathway, it makes more sense to reduce your debt, and save the extra 53k of interest and 5 years of payments.  Either way, it is a gamble. On one hand you are gambling that you may have an adverse event that needs your 20k reserve where you can pay your bills but will still have bills when the money runs out, on the other hand you can guarantee you reduce the amount of time an adverse event could bankrupt you, while saving $53,000.00 at the same time.  For me, the answer is clear: eliminate your “emergency fund “by reducing the number of years you may need the account. The longer you live, the higher the chances a medical complication could cause you to be unable to work and pay your bills.  By shaving 5 years off of your mortgage, you effectively reduce these odds, during the most likely years of your life to even need the emergency fund.

In conclusion, as far as an emergency fund goes you have two choices: save your emergency fund yielding nearly no return for the possibility of a rainy day which will most likely occur near the end of your mortgage, or put that same emergency fund towards your mortgage now, and save yourself years of payments and interest.  Personally, I choose to save time and money. By shaving years off your mortgage, you help reduce the risk that the bank can steal your home from your family, leaving only the government to worry about.

Why I chose the FIRE life, why you need money early in life not in retirement, and how to change this trend. 

My daughter was born on August 15, 2017 in Ketchikan Alaska and changed my life forever.  Never had I had so much love and joy in my life as the day we got to meet her.  Now that I have two children with the third on the way, I have never been happier and want to spend more time with them each day. Children are an amazing and life changing gift.  When we took my daughter home from the hospital, and I had to return to work, I realized just how important the FIRE lifestyle was to me.

Due to things like POS’s and mortgage payments, I had to return to work just 2 weeks after my daughter was born.  Luckily, we had saved enough that my wife could take an entire 3 months off to spend with our daughter, but when I returned to work, I became somewhat depressed being away from my new little bundle of joy.  I knew I had to work to pay the bills, but I missed holding my daughter and spending every minute I could with her, even holding her while she slept.  Now as she sits beside me at age of 2 and a half, I look back at how fast time has passed, and how little time I get to spend with my daughter due to POS’s.  On an average workday, I get to spend 3 hours with my son, and 4 hours with my daughter, which is depressing.  That amounts to 12.5% of my day with my son and 17% of my day with my daughter.  Even then, I don’t get to devote that full time to my children as I also have to fix supper, mow the yard, do laundry, and the many other IADL’s that are necessary to live in todays society.  If it weren’t for my wife, I would have even less time as we split the household responsibilities.  So, I only get to devote about 5% of my day to actually playing with my children and spending time with my wife, and that is a depressing figure.  It means that 95% of my life on a daily basis is currently spent doing something other than what I would prefer to do. Does that sound like the American Dream, or more like an American Nightmare?

Unfortunately, this is only going to get worse.  As time progresses, my children will go to school where they will be assigned seemingly endless hours of homework to occupy the few waking hours I get to spend with them after work and school.  They will have homework assignments and projects such as science fair projects which will occupy many weekends, for projects they won’t remember in 6 months’ time. As they continue to age, more and more activities external to our immediate family, such as little league, dance classes, and spending time with friends will result in even less time available to spend as a family. And before we know it, we will be watching them graduate and leaving our home to start lives of their own. 

I genuinely believe that the way our society views lifestyle progression backwards. Currently, society teaches us to go to college, get a degree, get married, buy a home, have children, and then put what spare change we have left in a 401K for retirement in 40 years. Society teaches us that we need at least a million dollars in retirement and then even some nationally recognized news agencies report that a million dollars may not be enough. This train of thought is totally illogical and in complete contradiction to what modern families need. 

Repeat after me: “I do not need a million dollars or really any significant savings in retirement.” In fact, as you see in the LTC Medicaid chapter, having a significant nest egg over $2,000.00 is actually detrimental to your financial stability and heirs.  The first reason is, no matter how much someone has saved in individual retirement, most retirees will receive social security benefits, guaranteeing a monthly income. On top of this, for the first time in their lifetime, retirees will no longer be forced to pay for private health insurance but rather will have their health insurance covered by Medicare. Additionally, even if they took out a 30-year mortgage at the age of 35, their home would still be entirely paid for by the time they traditionally retired at 65. Since their children will be raised and moved out of the house, leading lives of their own, they will no longer have any financial responsibility for the care of their children.  Simply put, you don’t need a large nest egg in retirement because you won’t have any expenses. 

Instead, I think society should look something like the following: all working class Americans who contribute to society should be enrolled in the Medicaid program. This would allow them the freedom and flexibility to work and contribute to society while eliminating the possibility of bankruptcy due to medical bills.  This would need to be funded by a tax similar to Medicare tax, but this wouldn’t be a POS, since you get to benefit from the program now. Government benefits for daycare should also be extended to all working-class American families to both increase their take home pay and provide their children a safe place to play and learn while their parents contribute to society. The 28% rule as it pertains to mortgages, should be changed from 28% of gross monthly income to 28% of net monthly income. The 28% rule is a “rule” used by mortgage lenders nationwide to gauge your ability to buy a home and how much of a monthly mortgage payment you can “afford” based on your income.  As you have seen in my past articles, net income compared to gross income can be well less than half of your gross income thanks to POS’s. Let’s say for simplicity sake your gross monthly income is $1000.00.  According to the current 28% rule, you could in theory “afford” a monthly mortgage payment of $280.00.  However, as you have learned here due to the multitude of POS’s presented to the average American worker, their actual take home or net monthly pay is nearly 50%.  $280.00 represents 56% of the actual net monthly take home pay of $500.00. This means should the 28% rule be applied to net income, American home buyers would be much more likely to avoid foreclosure, pay their mortgage bill on time, eliminate their mortgage debt sooner, and save more money since mortgage debt is your second largest annual expenditure after taxes.  Having the 28% rule based on net income would better protect the home buyer, as the 28% figure would be based on the worst case and more likely scenario of a 56% loss of gross income, thanks to POS’s.  Regardless of your actual take home pay, I can guarantee you that when you account for all POS’s, the 28% rule using net income is more realistic than the 28% rule as its currently written, based on your gross income. 

In conclusion, you only have one life to live, so quit spending 95% of it doing something you don’t love, away from those you do love.  I believe the above figure is the part of the reason we have such an epidemic of depression in this country, but that necessitates its own article.  You don’t need a million dollars in retirement, you need a million dollars in your 30s, when you are working full time to build your home and family.  Although this may seem like a fairy tale, it could easily be achieved if changes were made to allow all working families access to free healthcare and child care benefits, as these are the two largest expenditures of the modern family, after taxes. Additionally, if only one word in the 28% rule was changed from “gross” to “net,” homebuyers would be protected from foreclosure, and better able to save money, allowing them to exit the rat race and spend more time with the people they love.  Remember, you only have one life here, don’t waste 95% of it doing something you don’t love.

One of the few concepts of the FIRE community that I disagree with is the idea that as long as your investments return enough to cover your expenses, you have achieved FIRE.  This is commonly referred to as the 4% “rule,” or in sometimes portrayed as having 25 times your annual expenses in savings which hypothetically generate enough revenue to finance all of your annual expenses throughout “retirement.”  I have multiple issues with this theory, which is why I personally believe that true FIRE is never obtained until your actual worth, not net worth, is exactly $0.00. 

The first issue at hand is the 4% “rule.”  First, the 4% rule isn’t a rule at all, in fact, it is a theory.  History has shown us that based upon historical data, you should be able to return an average of 4%, which will provide enough money to cover all of your daily expenses, but there is no guarantee of that return. What happens when you have a decade or more of losses, and your next egg shrinks to 50% of its original value? What happens when your entire FIRE plan is built upon this foundation of the 4% “rule,” and the rule is broken? Look at the bottom of most any brokerage agreement you sign; every one of them has something like the following: “past investment performance does not indicate future investment performance.”  Basically, meaning that even though your broker will sell you the idea that your investments will ALWAYS go up, this isn’t guaranteed, and is just a theory. This is something we will dive into a little deeper in a future article, but will suffice for the purpose of this article.

Second, we need to address the idea that you have achieved FIRE with any LEVERAGED asset.   COVID-19 has taught us the importance of this particular issue, although it goes widely unrecognized.  Many FIRE bloggers claimed FIRE by owning rental and investment properties, or businesses, which were leveraged.  They theorized that since the rent collected from the rental properties or business income was paying the lien on the property, plus generating extra income, they had obtained FIRE.  However, COVID-19, and liberal politicians came and destroyed this idea.  Suddenly, businesses all over our country were forced to shut down, and many renters were unable to pay their rent, while businesses were unable to operate and generate income.  Stocks such as Ford Motor Company which had historically paid a good dividend for a decade, most recently yielding nearly 10%, suddenly discontinued their dividend.  What if you had planned your financial independence based primarily or completely on the Ford stock you owned producing enough dividends to cover your annual expenses including your mortgage, or your business would generate enough revenue to cover your mortgage? My point is you aren’t truly financially independent until you are at “Absolute Zero.”  Due to the magnitude of the situation, many local governments have stepped in and banned or delayed evictions.  Meanwhile, the individuals who mortgaged these properties and businesses still had payments to make to the bank, but no longer had any income to make the payments, forcing them into either foreclosure or deferment.  As I write this, we still do not know the long-term effect of the COVID-19 pandemic on our economy.  My only hope is we learn from the disaster that you are never truly financially independent if you own any mortgaged asset, even if you have other investments that could cover the mortgage, because they may drop in value as well, just like in 2008.  

Along this same line of thought, you haven’t truly reached FIRE if you still have a mortgage on your home.  As we discussed before, your home is only truly worth $1,000.00, as that is the national average monthly rental payment.  Since you will always need a roof over your head for as long as you live, your home doesn’t truly have any real “equity” because if you do sell it, you will take some or all of those proceeds to pay for the next roof over your head.  I understand your home does have a true value of much more than $1,000.00, but you will never actually have these dollars available in your checking account.  In order to obtain true financial independence, you need to eliminate your mortgage payment, because as long as your home is leveraged, should any adverse event happen in your life that causes you to miss payments over those 30 years, the bank will take your home.  Eliminating your mortgage ensures that for the remainder of your lifetime, you only have to worry about the government stealing your home instead of the government and the bank.  

In conclusion, many FIRE bloggers will tell you that you obtain FIRE the second your investment revenues are enough to cover your expenses plus fulfill the 4% rule and using leverage in things such as rentals is a smart FIRE path, and the quickest way to achieve financial independence.  In my opinion, this is a very dangerous FIRE pathway as you stand to lose everything should any of a number of adverse events occur in your life.  The danger is that for any reason ranging from a pandemic such as COVID19, to the financial crisis of 2008, it is likely that at some point in a 30 year mortgage your leveraged investments will not be able to cover the monthly mortgage payments, resulting in loss of the asset back to the lien holder. Should you combine leveraged investments, and a personal mortgage on your home, theorizing these leveraged investments will cover their payment and your home mortgage payment, then you are burning the candle at both ends, and playing with a FIRE that will most likely burn you.  True FIRE is only obtained when your primary home is owned free and clear, and your investments aren’t leveraged.  This way, should your investments go to $0.00, you still own your home and can still pay your electric and grocery bills by bagging groceries at your local produce store, part time.  However if your investments go to $0.00 and you cannot cover your bills when you have absolutely zero debt, then we all have bigger issues as our economy has most likely collapsed.  Owning your home outright not only helps you to qualify for Medicaid for your family under the expansion program, eliminate the possibility to go bankrupt due to medical bills, and increase your quality of life, it also helps you obtain true financial independence by guaranteeing a roof over your head for the remainder of your life, and the life of your children. Don’t focus on your net worth as this dismisses your leveraged assets by canceling them out with hypothetical income, instead shoot for an actual worth of $0.00, because only then will you be truly debt free.

The Death of Personal Responsibility and Accountability

When I was five years old, I started working on our family farm opening gates and locking/unlocking the hubs on the truck to engage the 4×4 system.  From an incredibly young age, I was taught that hard work would always lead to prosperity, and if it didn’t, you simply needed to work harder.  After all, this train of thought had led to the success of my family for the last three generations before I was born.  I believe that this was true for our parents and grandparents, however, this theory no longer applies to our generation due to POS’s.  POS’s have always existed in society, but in the last decade, both the amount, and the value of POS’s has increased to the point it has killed the hard work will always lead to prosperity in the United States.  The ethical considerations in this particular FIRE pathway are an internal battle I have dealt with personally since discovering the pathway 2 years ago and caused me to delay publishing my blog until now.  If it wasn’t for the many lives I see turned upside down and the family struggle with the system in the last few months of many patients lives, I wouldn’t publish this blog.  However, after seeing the campaign slogans such as Medicare for all, Universal Basic Income, and the recent 2 trillion dollar COVID-19 bailout, the time has come to publish, as the ethical considerations of not publishing, now outweigh those of publishing this blog.

The ethical dilemma in this situation is: Is it ethical to intentionally reduce your income to take advantage of programs such as Medicaid, while keeping more money in your pocket since your tax burden is also reduced?  Ten years ago, the answer was no, but currently, and into the future, the answer is yes.  The reason is simple, our government in the process of creating and expanding multiple social programs, while excluding the very working class that supports the programs, in turn forcing them into a life of essentially indentured servitude.  Regardless of race or gender, an entire generation of people from California to Maine was promised success if we only worked hard enough and attended college.  What they forgot to mention to us is the hundreds of thousands of dollars of student loan debt at 7% interest, and the lost revenue from attending college to receive our PHD in humanities. Those who couldn’t finish college, were still saddled with student loan debt at 7% interest, only they didn’t have a higher income to pay back the debt, leading to a vicious cycle where the compounding interest doubled or even tripled their initial principal balance in the matter of a few years.  We were required to study history, calculus, trigonometry, geometry, algebra 1, algebra 2, three years of Spanish, 4 years of English, art, and music class in order to “prepare us for life,” while the same educators eliminated classes such as home economics, shop, and basic finance.  I graduated both high school and college without understanding compound interest, which cost me dearly over my lifetime.  Could our educators really be that ignorant, or could it be that the system was intentionally designed to keep us in the dark about true life skills like investing, bill paying, saving, and the power of compound interest?  After all, Albert Einstein described compound interest in this fashion: “Compound interest is the eighth wonder of the world.  He who understands it earns it; he who doesn’t, pays it.”  I remember being required to learn a lot about Mr. Einstein, but for some reason something he described as “the eighth wonder of the world” wasn’t important enough to our educational system to warrant any discussion.

The death of personal responsibility and accountability in the last decade has only created more POS’s and these will continue to expand.  People across our country are beginning to realize the odds of success are significantly stacked against them and giving up.  After all, if the POS’s outweigh the benefits of working for somebody with my gross income, it only makes sense the same applies for everyone with an income below that of your average therapist with a master’s degree and two children.  Ideas like Universal Basic Income, Medicare for all, and a 600 weekly unemployment bonus for sitting at home making more than you were while working, simply poured gasoline on this FIRE, and will result in more Americans than ever before transitioning away from hard work to government support.  So really the question written another way is: Is it ethical for those who work and pay for all of these POS’s be punished by those same POS’s for the duration of their life while giving up time with their family and friends to finance the POS’s?  To me, the answer is absolutely not.  

In conclusion, the death of personal responsibility by a significant proportion of our population when combined with the progression of socialized government programs over the last decade has forced the working class into an unwinnable position.  No longer does a lifetime of hard work guarantee success, it only guarantees exclusion from Medicaid, exclusion from LTC Medicaid, and higher tax brackets for your entire lifetime and even when you die thanks to estate taxes.  Remember, your most valuable asset in the world is time and it is priceless.  Instead of spending your lifetime fighting against the ever progressing and accumulating POS’s, focus on reducing your workload, paying off debt ASAP, enjoying time with family and friends, and living a happier more fulfilling life.  After all, you only get one life here on Earth.  Eventually, you will receive a phone call that your mother, father, brother, sister, or other loved one has passed on from this world and you will instantly wish you had more of the most valuable asset that we all share regardless of income, time.

Although it may come as a surprise to you as I am very conservative, I support responsibly implemented universal healthcare in the United States, and truly believe it is our only option to keep our system from collapsing under its own weight. The fact I am conservative, and support universal healthcare, should give even more credibility to the idea.  As I discussed in the Medicaid expansion article, you cannot afford to miss out on Medicaid, meaning I support the movement, but within reason.  So let’s discuss exactly why I support “socialized” medicine and how we can afford it. 

I should start out by saying I did not and would not support “socialized” healthcare if it wasn’t for the effects of the “Affordable Healthcare Act,” even though its far from affordable.  Obamacare essentially transformed the entire reimbursement system for healthcare services in the United States, making it financially impossible to avoid a completely socialized healthcare system eventually.  Whether you realize it or not, we already have socialized medicine in the United States, and have since at least when I entered the medical field in 2009.  We have programs such as Medicare, Medicaid, the Veterans Administration, Tricare, Indian Health Services, and your local health department.  All of these are either mostly or completely funded by our federal government, via taxation.  Currently Medicare covers 44 million citizens, Medicaid 75 million, Veterans Administration 10 million, 9.5 million through Tricare, and 2.5 million citizens covered under Indian Health services.  All together, these socialized health insurance platforms cover 141 million Americans, representing a whopping 43% of the entire population of the United States!  Since these programs are either completely or almost completely funded by the government, nearly ½ of the general population receive essentially free healthcare, funded by the taxpayer.

Although recipients of our already existing socialized healthcare systems represent just under 50% of the general population, the recipients of these programs make up the majority of payment for healthcare services delivered annually.  The reason for this is simple: Medicare covers those who are 65 or older or disabled, and those over 65 years of age will always require more healthcare services than the young and healthy. This is only going to get even more costly as baby boomers age, and require more healthcare services.  In fact, CMS or the Centers for Medicare and Medicaid Services, which we will discuss further, reports that “Per person personal health care spending for the 65 and older population was $19,098 in 2014, over 5 times higher than spending per child ($3,749) and almost 3 times the spending per working-age person ($7,153).”  Also important, in 2018, total expenditures for both Medicare and Medicaid accounted for 1.35 trillion dollars.  Keep in mind that these are only 2 of the many socialized healthcare platforms and remember the United States only brings in about 3-3.5 trillion dollars in annual revenues, to pay for this 1.35 trillion-dollar annual expenditure. 

Another factor that really needs discussion on this topic is lost productivity on a national level.  This comes in two forms.  The first, is the fact that many Americans have already quit working, or reduced working in order to qualify for Medicaid.  Although it may not have been the intention of the Affordable Care Act, the ACA actually poured gasoline on this raging wildfire by significantly increasing the thresholds for qualification.  This effectively punished many lower to middle class Americans, by doing exactly what was discussed in the previous chapter: forcing them to pay higher private health insurance premiums, while excluding them from Medicaid.  Private insurance became more expensive, and Medicaid became even more enticing for those familiar with the program.  In my decade of experience, and especially since Medicaid expansion, I have lost count of how many patients have entered the clinic and told me they were quitting their job to qualify for Medicaid, or had reentered the work force, then were dropped from Medicaid coverage, forcing them to quit working, in order to qualify for Medicaid.  The second part of the lost productivity argument is the fact that it limits Americans from doing the jobs they really want to do as they are forced to take a job with healthcare benefits, over pursuing their dreams, thus effectively killing the American dream, again.  For instance, I have a great friend back home in Virginia who owns and operates his own farm.  He is one of the hardest workers you will ever meet in your lifetime.  For years, his wife worked as a teacher, primarily for insurance benefits.  After doing some significant financial and family analysis, they determined that continuing to work for the sole purpose of healthcare coverage wasn’t worth it, so she quit her job and is now working full time on the farm.  As a result, they are gambling that their crowdfunded health insurance will sustain them should they ever have any major medical issues.  They have effectively been punished by another POS, excluding them from Medicaid, while they work 12 hour days, 6 days a week so you and I can have food on our table.  This is just one example of millions across our country that are costing productivity.  The irony here is that lost productivity, would generate more tax dollars, which could in turn be used to fund the universal healthcare program.  

So now that we have identified the problem, let’s discuss the solution.  The solution to our healthcare crisis is responsibly implemented universal healthcare, with the key words being “responsibly implemented.”  Reasonably implemented would look something like the following.  

1. Every legal citizenof the United States is automatically placed on the Medicaid system.  Since the system already exists, there will be absolutely zero cost in creating the program, only expanding the workforce to handle the extra enrollees.  But remember, nearly half of the country is already on the program or a similar one, so at worst, doubling the Medicaid workforce would be appropriate to facilitate the transition to Medicaid for all.  
2. Every working age citizen pays into the program.  This would be facilitated by some form of tax, similar to Medicare tax.  Those who aren’t working but are able bodied would pay via some form of community service a few hours a week.  Those extra man hours would increase our productivity even more within the country. Although this will be an additional POS, at least you will benefit from it now, unlike that 15% FICA tax.
3. Expanded fraud and abuse inquiry boards.  Currently, there are programs in Medicare and Medicaid that look into fraud and abuse, but they are severely understaffed and catch only the most blatant and obvious abuses.  Abuse comes in many forms, from practitioners billing for services that were not provided, to patients running into the E.R. for a band aid or the sniffles.  Find an E.R. nurse and ask them about the abuses they see on a daily basis, this should give you an indication of how many hundreds of thousands if not millions of cases annually are served and paid for with tax dollars, where the services were not necessary. Since Emergency Departments are required by the FEDERAL government to treat patients, they have to spend their time and resources treating these patients regardless if the services are warranted.  Since physicians are FEDERALLY mandated to provide care to everyone who enters the emergency room, this abuse waste not only dollars, but precious time of our doctors, nurses, and support staff who could be treating other critically ill patients.  Those caught abusing the system would be warned, then expelled from the program should the abuses continue. They can continue to receive necessary medical services, but with a bill.  Private insurance already implements this, and you the patient get a bill if they deem the services not “medically necessary.”  Since hospitals know they have a certain percentage of patients they treat but will never receive payment from, they increase the prices on those who can pay to subsidize their operations.
4. Copays for all.  Multiple studies have shown that even minor copays dissuade patients from entering the E.R. for unnecessary treatment.  Isn’t it amazing when you have to pay for something yourself with your own money how you begin to question is it absolutely necessary?  This system already works within the private sector, and I would argue too well, as high copays in the private sector dissuade those who actually work and need healthcare from receiving the needed care.  Copays should be capped at no more than 50 dollars to ensure everybody has an opportunity to receive care. Those who cannot afford even the 50 dollar copay can work off their debt, again through community service, or volunteering at the healthcare facility where they received treatment. 
5. Elimination of private health insurance companies.  You heard that right, from the far right conservative.  Saving lives shouldn’t be a Fortune 500 company.  Healthcare should be a right of all American citizens, but that’s another blog post for the future. Call me soft, but I don’t think anyone should ever make millions or even billions of dollars, at the literal expense of others.  Greed within the healthcare insurance system so some CEO can have a larger yacht, needs to be a thing of the past.  However, based on their experience, these private sector individuals should be considered to be transitioned into the Medicaid program, but solely to assist with transition to what is essentially a not for profit healthcare system.  I personally believe that not for profit healthcare systems should be the only systems going forward.
6. Exclusions for those who habitually are noncompliant with care.  There is a term in healthcare called AMA.  AMA stands for “Against Medical Advice” and is usually used to describe a patient who leaves before care is completed, or disregards medical advice altogether.  Both private insurance, and Medicare already have programs in place where the patient will usually receive the entire bill for services, should they leave against the doctors advice before treatment is completed, simply because of personal responsibility.  It isn’t the responsibility of the government or even the private health insurer to babysit you.  Those who leave AMA get a bill, just like on the Medicare and private programs already in place, and those who continue could eventually be denied care, or deprioritized from care.  We should also explore programs that really dig into the illegal drugs in this country.  It makes no sense to continue to pay for the care of someone who wants to harm their body while simultaneously paying law enforcement to address the drug crisis.  We are burning the candle at both ends.  “My body my choice” means just that.  Should you make the choice, that is fine but the government will no longer continue to pay for your poor choices, you will quite literally. I know this is a topic that will require much debate and ethical considerations, but remember the idea here is reasonably implemented universal healthcare, not simply universal healthcare.

In conclusion, reasonably implemented universal healthcare is really our only choice at this point in time. The longer we delay the transition, the more people who will suffer, be ruined financially with medical bills, and avoid treatment because they cannot afford it with their current private insurance.  With the implementation of the ACA and the Medicaid expansion program, we have long surpassed the point of no return.  Former President Obama promised to “fundamentally transform” the United States, and he was very successful when it comes to healthcare.  Nearly half of our population is already on some form of socialized healthcare within the United States today, and the only people getting left behind are those very people who are funding the programs by working and paying taxes.  Increased productivity, and decreased fraud and abuse as well as a minor tax will pay for a significant proportion, if not all, of this program, although I have no idea exactly how much.  By expanding Medicaid for all Americans, we will eliminate the second largest Penalty of Success the average working class American will ever face, which is healthcare costs.  Unfortunately, until we implement this program, those working class citizens will continue to feel the squeeze from both the ever increasing tax burden to pay for our already existing socialized healthcare, exclusion from those same programs they already fund for others, and ever increasing private health insurance costs.