I’ve been called an optimist so I’m usually pretty good at finding bright spots in painful situations. Recessions are painful situations and I like to avoid pain as a general rule, but sometimes some extra pain can be a good thing!

See, I’m doing the optimism thing right now.

Recessions may be painful, but are actually normal cycles in a healthy economy.

Not an Amputation – A Reconstructive Surgery

I’ve been having a lot of shoulder pain over the past few years. I know it’s a natural part of getting older, but it kept getting worse and worse. It hurt too much to pick up my kids and my shoulder was getting weaker. It was getting too uncomfortable to put my arm around my wife in the pew at church. It got so bad that I decided to actually go and see a doctor about it.

It turned out that I had some significant labrum tears that could be repaired with surgery. The doctor told me I didn’t need to have the surgery: if I could live with the pain I wouldn’t have to go through the operation. He also said that if I had the surgery I could be confident the pain would be gone and I’d be able to throw a ball again.

I decided to do it.

It was an outpatient surgery (modern medicine is an amazing common grace!) and I was done and home before supper. I had a nerve block to hide the initial pain, but in a few days that nerve block wore off and the pain in my shoulder was excruciating. It was probably 5 times worse than before the surgery. Every bump or little wrong movement sent shockwaves of agony through my body.

After a month, it was a little better. It still hurt, but not as bad as the first weeks after surgery. I couldn’t use my arm at all though. I had lost complete use of it.

After 2 months my shoulder hurt less than before the surgery. Gradually I was able to use my arm a little more.

After 3 months I could start exercising. I continued to recover until I could actually make a throwing motion without pain until I was good enough to resume my usual excellent frisbee throwing routine with my wife and kids. Eventually I’ll be even better than I was before surgery.

Sometimes I think people tend to fear a recession like they’d fear an amputation. Folks are afraid that a recession will come and then nothing will ever be the same. It’s similar to me thinking I was going to have my arm cut off to alleviate my pain – I’d only get loss and no recovery.

A recession is an economic downturn that causes pain, and there are losses; but there is recovery too.

Every Recession is the Same

We are experiencing a pullback in the stock market – which is not unheard of. A 20% drop from the highs in the S&P 500 happens about every 7 years.

When there’s a 20% drop that’s called a bear market and I have written more about those here.

Usually recessions are preceded by bear markets:

Since 1948, eight of 11 bear markets have been followed by recessions. In one case, the start of the recession came at roughly the same time as the market’s peak; the longest wait was 12 1/2 months.

https://www.kiplinger.com/slideshow/investing/t052-s001-8-facts-you-need-to-know-about-bear-markets/index.html#:~:text=Since%201948%2C%20eight%20of%2011,months%2C%20according%20to%20InvesTech%20Research.

I’ve also written about how recessions are officially tracked and declared by the NBER, so we can know what the similarities are between them.

Recessions are preceded by a period of growth. Both the Tech Wreck of 2001 and the Great Recession followed periods of exceptional economic expansion and growth. The 20’s were roaring before the Great Depression too! The recessions of the 70s and 80s were also preceded by some innovative technology or “boom”.

Recessions are correlated with high unemployment. Job loss is common in recessions when companies close down or downsize to reduce inefficiencies.

Wages are usually depressed in recessions, for the same reasons as unemployment.

Every recession has ended at some point. Followed by a period of expansion and growth.

Every Recession is Different

We are always tempted to think: Yeah. Recessions are normal. But this time it’s different. I CAN FEEL IT IN MY BONES. What if this recession doesn’t follow the pattern?

While the next recession will probably rhyme with all the recessions of the past, it won’t be identical.

Banks aren’t structured like they were in 2008 and companies aren’t using mark-to-market accounting any more so it’s unlikely that a recession will see such a huge shakeup and damage in the banking sector this next time. The housing market is totally different now than it was pre-2008. There isn’t an over-abundance of houses and the average home equity in the U.S. is at record highs.

Some recessions are fueled by political instability, war, over regulation, a major failure of an entire market sector, or something else. You’re right if you feel it in your bones. This next time it will be different, but in what ways? Maybe the next recession will be a lot softer than the last one.

How Recessions are Good

• Companies get more efficient

Recessions serve as a forcing mechanism for companies to learn to operate leaner and with more efficiency. This is good for long term profits and values, even though it hurts when it’s happening.

• Personal Priorities shift

Personal savings rates have been steadily declining since the helicopter-money phase of COVID times. A recession can force a priority shift among individuals away from unnecessary risk and consumption toward saving and planning which leads to a much stronger future for them as consumers.

• Waste is exposed

Citizens start to notice extreme government waste when they’re being squeezed and are a lot more likely to “vote with their wallet”. This can result in red-tape cutting in the elimination of heavy-handed regulations and in pro-commerce policies that help alleviate the recession and lead to prosperity.

• Opportunities Abound

Everything goes on sale in a recession. If you’ve been diligent and prepared for the next one it’s a great time to buy. Usually it’s a great time to purchase real estate, start new construction, pay for a remodel, buy a car, or invest in the stock market.

Learn From the Next One

If you’re not feeling prepared for the next recession and things are starting to get real and you’re scared, that’s okay. You can still take action. This next recession won’t be the last one. Take this opportunity to learn and prepare to take advantage of the next recession after it.

If you’re doing well and have saved but are looking for guidance on how to capitalize off of an upcoming recession or want to know if you’re well prepared I’d love to help you.

Recession is a scary word. It may not be as scary as “depression”, but it’s still scary. In fact, the main reason economic downturns are called recessions nowadays is because the word depression carries some unwelcome connotations and the main reason the word “depressions” were used was to replace words like Panic! and Crisis!. There is no formal definition for “depression” in economics, though the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) has the honor of being the official namer of recessions and recoveries. The NBER uses a whole lot of factors to identify what is a recession and doesn’t solely rely on GDP as a measurement.

I’ve written about how bear markets are normal and unfortunately the same is true for recessions and wide-spread economic contraction. Recessions bring stress, uncertainty, and fear while they also bring opportunity. There is a great need to combat the (very normal) emotional reaction to the volatility that happens during contracting markets, and that need is even more amplified if the goal of retirement is quickly approaching. With that in mind, here are some (hopefully) helpful thoughts and ideas to consider when retiring in a recession.

Look at History

As is often the case, a little understanding of history can put things into perspective and help to serve as a reminder that the wisdom of Solomon also applies to markets and economies. There is indeed nothing new under the sun as the Preacher explains in Ecclesiastes 1:9, so when worrying and planning for the future it’s helpful to remember that.

The original “great depression” happened all the way back in 1873, lasted 65 months, and was referred to as such until the next big one came in 1929. That original depression was arguably the harshest and it caused the stock exchange to close for 10 days. The Great Depression of 1929 lasted 43 months and was so bad that polite society decided to stop calling anything afterwards a depression, but many recessions still happened after that.

Using data back to 1857 the average length of a recession is around 17 months, but the post WWII era has a much shorter duration of recession; averaging around 11 months. The average time between recessions since WWII is about 5 years. The shortest recession in history is in recent memory: the Pandemic Recession, and it only lasted 2 or 3 months (with ripple effects still having an impact as of the date of this writing).

Recessions and even depressions are a normal part of economic cycles and if we don’t recover from the next one it will be the first time in the history of the United States that has happened. Using history as our guide we can expect that the next recession will be unpleasant, but that it will also probably be survivable and may even be a blessing.

Stay Invested in the Market

When investing in the market(s) whether stocks, bonds, or real estate, there is one unifying principal: don’t jump in and out. One of the best times to invest cash has been at market and economic bottoms, but it’s extremely hard (maybe impossible) to time that out perfectly. There are merits to pushing available cash into the market in rough patches like Warren Buffet does, but there are much greater risks in trying to time when to move out of investments and into cash. Josh Brown of “The Reformed Broker” put it this way last week:

Who wins? The person who does the least.

The person who does the most always loses. Despondently bullish on Tuesday, hopeful on Wednesday, bearish again by Friday, buying on green, selling on red, mood changing with every day’s narrative, chopping yourself up at every twist and turn – this is how you can take a bad situation and make it ten times worse. I don’t recommend this sort of behavior. I’ve never seen it work.

https://thereformedbroker.com/2022/04/29/its-less-complicated-than-you-think/

If retirement is incoming, the last thing you want to do is try to get cute with your investment strategy right when volatility is ripsawing through your portfolio. Staying invested, diversified, and patient is the best way to maximize your results through recessionary periods. If you feel like you must do something then put some more of your cash to work in the market, or use it on the next idea…

Reduce Expenses

This is a bit of a no-brainer, but worth mentioning. Spending less means keeping more money and keeping more money is very heavily correlated with having more money. A great use of extra cash it to pay down high interest debt while in a recessionary period. Not only will that stop the incessant compounding of interest that increases liabilities, it frees up monthly cashflow that was previously being sent to creditors. Paying off an 18% interest rate credit card can be similar to an 18% market return when it comes to a personal balance sheet.

Aside from paying down consumer debt, cutting back on luxuries while in a recession is a normal (sometimes absolutely necessary) method to deal with the uncertainty. Humans have a very hard time imagining what life will be like in the future, but by realistically looking at how much can be cut from monthly spending we can increase feelings of security. This is where cutting out the daily cappuccinos can actually come into play. In a crunch beans and rice sustain us just as well as steak and scallops. Dialing back cost of living expenses is a really easy lever to pull in case of a financial emergency. Some of us have experience using that lever already (remember being newly married and broke??).

Lifestyle creep is a real thing, and if left unchecked can run rampant and out of control. If you want to be able to retire in a recession having a handle on expenses is vital. If you can be content with waiting to live the high life for about a year (on average) through a recession then you can likely continue with your retirement plans.

Consider Part-Time Work

There is absolutely no shame in “un-retiring”. Those skills that funded the 401(k), IRAs, and brokerage accounts, the knowledge and expertise that put kids through college and kept food on the table, the determination and work-ethic that bought a house and started a business are ALL still there.

It’s not the end of the world to have to supplement income with part-time or even full-time temporary work. In fact, this is a large portion of many people’s legitimate retirement plans. It’s a good idea to not just retire and wait to die playing golf anyway, since we exist to love God and our neighbor and it’s hard to do that while selfishly living the last 30 years of life. So why not consider working again if anxious about retirement?

You may not even need to keep working, but if you’re scared about retiring in a recession just remember that you have the option of working again available to you. Especially right now when so many companies are looking for workers with skills that you probably have in spades.

Delay Big Spending Events

Often bear markets and recessions cause pre-retirees to keep working because they have grand plans for a family Hawaii trip or European vacation that is supposed to mark a grand finale to their working careers. There’s nothing wrong with that! However, a simple way to continue on with the retirement plan is to wait to make big spends out of invested assets while in a downturn.

Ideally, there would be plenty of cash available in anticipation of the big spend, so plans aren’t derailed. In fact, a recession can be a blessing if you were planning to buy a home, build an addition, buy a car, or travel soon. A big impact of recessions are drops in prices of all of those things as consumers focus on not losing their house and feeding their families. If you have the cash, it’s a benefit (to you) that the economy is resetting.

If you don’t have the cash and would have to tap into investments at a depressed value, then the best answer is to simply wait. Be patient. We know that every recession so far hasn’t been permanent (and if the next one is we’ll have bigger problems) so the best answer is to just wait for values to recover and get back on track with the plan.

Trust Christ

My pastor often tells me a story of a really, really rough time in his life. Death, job uncertainties, failures, and all of that stuff was going on and he was bearing his soul to his pastor at the time. After all of his exasperated venting and emotional unloading his pastor looked at him and said “You know what your problem is? You don’t trust Christ. You need to trust Christ”.

What an infuriating thing to hear in the midst of sorrow and pain and uncertainty! But it’s true.

Surely there are more compassionate ways to put it, and we always feel like our situation is more complicated or unjust and requires a more delicate and articulate answer. But it is that simple.

Put a real perspective on your worry and trust Christ.

25“Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? 26Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? 27And which of you by being anxious can add a single hour to his span of life?^g 28And why are you anxious about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin, 29yet I tell you, even Solomon in all his glory was not arrayed like one of these. 30But if God so clothes the grass of the field, which today is alive and tomorrow is thrown into the oven, will he not much more clothe you, O you of little faith? 31Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. 33But seek first the kingdom of God and his righteousness, and all these things will be added to you.

34“Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble.

https://biblehub.com/esv/matthew/6.htm

We’ve entered the 26th bear market since 1928. All three major market indices are significantly lower than their highs, but just recently the S&P 500 (a major bell-weather for the U.S. stock market as a whole) has plunged more than 20% from its recent all-time high.

Stock market drops this large aren’t uncommon and the average bear market usually drops around 30% from the recent high. There’s no way of knowing how long it will last or how low it will go. Many investors use history as a guide and that can be helpful.

It’s reassuring to know that every single bear market the S&P 500 has had so far has been followed by a bull market where stocks increased significantly and has more than made up for the losses. It’s reassuring to know that the average length of a bear market is a little more than a year, and if that’s the case we’re already half-way through the damage (though like I said, there’s no way to know how long this will last).

Since we are powerless to change the market with our worrying, it’s important to focus on ways to take advantage of this bear market. Here are 3 ways to make the most out of this stock market drop.

Put Excess Cash To Work

Inflation is currently at record highs. Cash sitting in the bank, in your 401(k), in your safe at home, and even in your wallet is losing value (purchasing power) at a blistering pace. Cash may be usually king, but right now putting cash to work is king.

The stock market has dropped over 20% from it’s highs. That means that if you held a diversified portfolio of equities and had $1,000,000.00 invested in the market it is likely worth somewhere around $800,000.00 right now. That drop of $200,000.00 may feel like a loss, but it’s not a loss in cash. It’s a loss in valuation. Much like if the value of your home were to drop, if you don’t sell it you don’t realize the loss.

If you were comfortable putting money to work (e.g. investing) while the stock market was increasing week after week and day after day for the past 2 years you should be more than happy to put money to work now when the value has dropped back to what it was about 18 months ago. Market drops present wonderful buying opportunities that we should take advantage of but are often hesitant to because when the market goes down, we tend to fear that it will keep going down.

If we wait for the market to come back up before investing, we are falling victim to the trap of trying to time the market, which cannot be done. Psychologically it’s really hard to get past this, because it seems like a good idea to wait until things feel good again, but there’s a problem with that.

Graig Stettner, CFA came up with a wonderful sketch that illustrates this:

The best option is to keep investing, no matter what happens. Knowing that we’re significantly off of the market highs is indicative of a great opportunity to invest, because of what we see usually happens after a market downturn. History does not always repeat exactly and past performance is not a guarantee of future results, but we can reasonably expect what is happening now to at least be similar to what has historically happened. Dimensional Funds released a helpful chart showing market returns 1, 3, and 5 years after market drops of 10%, 20%, and 30% respectively.

How should you consider putting your cash to work? Well, first think about making contributions to your retirement plans. You can max out Roth IRAs if you qualify right now with cash you’re sitting on. You could also consider increasing your contributions to your work retirement plan. Don’t forget about investing your HSA dollars as well if you are eligible for an HSA. Even if the custodian your company chooses for an HSA doesn’t allow for it, you are able to transfer some HSA funds into another investable HSA. If you’ve maxed out all of your tax-advantaged investment options with excess cash, you should also consider investing in a non-qualified account. These are sometimes called brokerage accounts, or mutual fund accounts by some finance people, but really they’re accounts that are going to be subject to capital gains taxes instead of special retirement account rules.

Do Roth Conversions Now

Roth conversions are the transfer of pre-tax retirement accounts (e.g. Traditional IRAs, 401(k)s, SIMPLE IRAs, or SEP IRAs) into a Roth IRA. These transactions don’t incur a tax penalty but the account owner must pay taxes on the money that is converted as ordinary income for that year. Whether or not doing this makes sense for you is determined by a whole bunch of quantifiable and also qualitative data, so it’s very important to work with a CFP® or tax strategist that understands the pros and cons very well so you don’t end up paying more in lifetime taxes than you otherwise may have.

If you’ve determined that Roth conversions are a good part of your lifetime tax strategy then market pullbacks are a great time to implement them. This is because you have the opportunity to convert shares at a depreciated value in your traditional retirement account. The result is more shares converted with less taxes owed than if markets were higher.

Consider doing Roth conversions while the market is in bear mode to maximize tax savings over your lifetime.

Harvest Tax Losses & Rebalance Your Portfolio

When markets retreat in value it can be a great time to take advantage of some paper losses. Selling losing positions and buying a different position can allow for some income tax-reducing short and long term gains to be realized in your account. It’s important to understand wash-sale rules when employing this strategy, but if used correctly it can be a great way to offset capital gains or just reduce your overall taxable income for the year. Tax loss harvesting is a big silver-lining when stock values drop significantly.

Rebalancing is also vitally important during a bear market. If you have a 60/40 portfolio that is 60% equities and 40% fixed-income (bonds, cash, etc.) and there is a large drop in stock prices, then your investment mix isn’t 60/40 anymore. It could be closer to 50/50 or 40/60. Rebalancing is the act of moving some of the portfolio allocation from the side that held up better to the side that has suffered bigger losses. This is very similar to “putting extra cash to work” from earlier, but employed without using actual cash. A good portfolio manager or financial advisor will make sure this is being done for you.

Do Not Fear

Ultimately, what to do during a bear market has to do with stewardship. It is important to make wise financial decisions at all stages of market cycles and personal finance stages. Seek first the kingdom of God and remember that true wisdom comes from knowing the Lord (Proverbs 9:10). Remembering that God is in control no matter what offers peace and comfort to us as we methodically make our way through uncertain times. Don’t let fear paralyze you into rash or unwise decisions, trust Christ and be wise.

In March and in May the Fed raised rates .25 and .50 bps respectively. After the June 14-15 meeting they are expected to raise rates another .50 bps in an effort to curb the historic inflation numbers we are seeing.

Inflation is hurting our economy and the people that make up our economy. The Fed exists to limit the damage done by inflation.

How Does the Fed Work?

The Federal Reserve has what’s commonly known as a “dual mandate” to keep inflation/prices reasonable and to keep unemployment from getting out of hand.

The Fed has many tools they can utilize to fulfill this mandate:

• Open Market Operations
• Discount Window and Discount Rate
• Reserve Requirements
• Interest on Reserve Balances
• Overnight Reverse Repurchase Agreement Facility
• Term Deposit Facility
• Central Bank Liquidity Swaps
• Foreign and International Monetary Authorities (FIMA) Repo Facility
• Standing Overnight Repurchase Agreement Facility
• Expired Policy Tools

What everyone is looking at right now is the Fed’s Open Market Operations process. This is the method they use to impact the rate we’re all talking about all of the time. There’s a 12 person committee called the Federal Open Market Committee (FOMC) that sets the targeted rate and then uses open market operations, discount rates, and reserve requirements to impact it.

What The FOMC Has Done So Far

In May, 2022 rates were raised by another 50 basis points for a targeted level of .75-1.00. It’s expected that in June they’ll move up another 50 basis points for a targeted level of 1.25 to 1.50.

2022

The idea is that this rate hike will help keep the economy from “overheating” with inflation rising quickly.

Will it work?

Historically it has, but so far the rate of inflation is far outpacing the fed’s response. Here’s what inflation vs. the fed funds rate has looked like lately:

Looks a little bit behind the curve doesn’t it? It’s even worse now that CPI rates came out at a staggering 8.6% for May 2022.

Contrast that image with what Fed Chair Paul Volcker did in the late 70’s and early 80’s to battle rising inflation:

Fed funds rates got up to 20% there in the early 80s to tamp down the extreme inflation that was taking place.

I don’t know why the Fed is being so dovish (I have my guesses) but this is a pretty concerning signal that we need to buckle up and be prepared for some less-than-ideal times as far as personal finance goes. Here are some action items you can start thinking about right now to be prepared:

• Pay off high interest debt
• Lock in long term low mortgage rates
• Pay off variable interest debt
• Put excess cash to use by investing it

Stocks are historically a great hedge against inflation and owning a home (with a low mortgage rate) is a great hedge also. Even better than that is being completely debt free and having the bulk of your money working for you in the form of investments, business, or real estate.

Don’t Panic

Above everything it’s important to not fear. Romans 8:28 says that “We know that all things work together for the good of those who love God: those who are called according to His purpose.” There have been worse times in history than this and they haven’t yet ushered in the apocalypse.

Remember that all we have belongs ultimately to the Lord and we are but stewards: “The earth and everything in it, the world and its inhabitants, belong to the LORD” Psalm 24:1.

We must remain steadfast and use the tools we have been given to make the best decisions we can without fear and without envy and greed.

Living off of savings is weirdly different from living off of wages.

It feels different and almost wrong for many folks. The numerous clients I have helped through retirement have all felt it to varying degrees. It’s a strange feeling to stop bringing home a paycheck and to start to deplete the nest egg that took 30 years to accumulate.

After all, disciplined saving over 30 years is no accident. It takes hard work and effort. It takes self-denying sacrifice and determination, and now that you’re approaching that often dreamed of time when you can stop working because you have to and start working only when you want to, you start to feel nervous and start asking questions like:

“What if I run out of money?”

“What if I lose all of my money in a new Great Recession?”

“Is the money I saved really going to be enough?”

“How can I be sure I’m making the right decision?”

Those are good questions and those uncertainties are the reason having a great retirement income plan as part of your overall financial plan is so important. But how do you know you have the right plan?

There are lots of options and even more salesmen out here.

There are lots of options to choose from and lots of financial professionals out there selling you their “best” product to answer your questions, but there is no one solution that fits everyone. Each individual may have their preference for how to protect and generate retirement income for folks and think their way is the best (I know I think my way is best!) but it’s more complicated than that.

An important and often overlooked factor in financial planning in general, but especially in retirement income planning is plan adherence. How likely is it that you will stick to the plan?

If you’re uncomfortable, unfamiliar, or untrusting of the stock market and are banking on 30 years of annualized returns greater than 6% how likely are you to stay invested when your $500,000 equity portfolio dips by $150,000 (30%) or when it doesn’t grow at all for a few consecutive years?

Alternatively, what if you’re a analytically minded investor who is comfortable taking risks and seeing the long-term history of the markets. How likely are you to stick with an income protection plan that locked in your portfolio to 3-7% “guaranteed” returns (as long as you stay invested for 5,7, or 10 years) when the stock market is ripping off double digit returns year after year?

Unfortunately these types of plans are sold to the wrong type of people all of the time, and it results in locking in losses, paying high surrender fees, and a festering hatred for all financial advisors everywhere.

Your preferences matter.

I have often told investors “Your risk tolerance doesn’t matter!” and I stick by that. Your tolerance won’t determine the returns of the stock market. Your tolerance to risk won’t change the contract on a variable annuity. But where it does matter is in whether or not you’ll stick to the plan.

In psychologist Dr. Moira Somers book Advice That Sticks she likens planners giving financial advice to doctors giving medical advice. The recommendations may be spot on and very likely to result in a positive outcome, but for some reason patients (clients) just don’t implement the plan.

When’s the last time you saw a doctor? How well did they get to know you before prescribing or diagnosing you? Without going in to too much commentary on today’s medical industry, I think it’s safe to say that most of us would prefer our doctors to take a lot of time to understand us (the best ones already do!) so they can prescribe a course of action that will not only make us well, but one that we’ll adhere to.

In finance it’s similar because as an experienced and educated financial planner I can easily see what needs to be done and how to increase the likelihood of success (how success is defined is a worthy of many more words than this) and then prescribe a course of action. But if I disregard my clients’ personal experience, values, and psychology then my recommendations are doomed to fail, because the client is bound to not adhere to the plan.

Your preferences don’t matter.

Well, I couldn’t let it completely go. Your preferences don’t matter in some other ways.

Expanding on the conundrum physicians face when treating patients, it’s clear that to some extent our preferences don’t matter. If I prefer to eat 1,000 grams of sugar every day it makes it really hard for my doctor to help me avoid type 2 diabetes. They may prescribe insulin to keep me from killing myself, but at that point they’re just doing damage control to the best of their ability.

Similarly in retirement income planning I may have a hard time coming up with solutions if a clients’ preference is to not take on any risk, not commit to any length of time, and get the top returns available in the market, and also retain maximum flexibility. That’s not the way it works.

Finance is math and math is a beautiful gift from God. There are rules in math that we can learn and follow. We can replicate results and forecast future results.

As a financial planner once I know your values, goals, dreams, desires, behaviors, and experience I’ll have a good idea of where we are going. That’s the hard part. The math is the easy part because it’s not fluffy, the math doesn’t change.

So what are your style preferences?

Using the RISA framework developed by Alex Murguia and Wade Pfau it’s a little bit helpful to dive into some different income style personality types that many people exhibit. Murguia breaks down the styles into a matrix that has a mash-up of these 4 styles: Safety First and Probability Based and Optionality Oriented and Commitment Oriented.

Probability-Oriented investors rely on history and statistics and usually invest in a way that is usually considered aggressive and seek higher returns.

Optionality-Oriented investors usually use income producing tools that retain ultimate flexibility and don’t lock them into anything.

Safety-First investors prioritize preservation of their assets above all else.

Commitment-Oriented investors place the highest premium on getting guarantees.

You may look at these options and see yourself fit into one of the four boxes shown below:

How To Implement

Knowing the style of income that you prefer can go a long way toward developing a plan that suits you best. Since the goal of retirement income planning isn’t usually to die with the maximum amount of money possible but is rather to maximize enjoyment of life, there are lots of other inputs to consider in income planning apart from how to grow the money the best.

I have undone a lot of other financial advisors work for clients because there was a communication breakdown between what the client needed/wanted and what the advisor ultimately recommended. It’s really important to have a sound income plan in retirement that you can adhere to. In order to do that, you need to understand it and be comfortable with it.

But that’s not all. The plan also has to work, and that’s where the math comes in.

The IRS says that if you’re not withholding enough taxes throughout the year you have to pay an underpayment penalty. This can even be true if at the end of the year you’re due a refund! Much of the time this isn’t a problem, especially for people who earn a majority of their income through wages working a W-2 job. Usually the withholding for federal taxes are enough and you can check that each time you get a paystub.

But if you are going to owe at least $1,000 in federal income taxes this year (after withholding and refundable credits) AND your withholding and credits cover less than 90% of your tax liability for the current year or 100% of your liability for the last year (whichever is less) then you’ve got to pay estimated taxes.

Estimated taxes are due each quarter but you can pay them weekly or monthly or however like, just as long as the IRS receives the quarterly estimate by the deadline for that quarter.

Who Needs To Pay Quarterly Estimates?

Anyone that isn’t going to satisfy the above criteria through regular withholding! This means self-employed people that take a draw or profits, partners in business that receive payouts, side-hustlers that pocket extra cash, farmers¹ (if less than 2/3 of their gross income comes from farming), house-flippers, and more.

People with non-qualified investment accounts should be wary too. Dividends and interest shouldn’t be a concern, but if there is any income realized from the investments then that could result in a surprise underpayment penalty and trigger estimated tax payments (this is yet another reason that realizing short-term capital gains in an investment account is a really bad idea). The same is true for anyone receiving rental income!

How To Pay Quarterly Estimates

It’s easiest and simplest, after estimating your taxes owed for the upcoming year, to pay electronically. Yo can do that on the IRS website here: https://www.irs.gov/payments. This eliminates some of the risk of the IRS depositing your tax check and not crediting you for it! Always keep good records. I’ve heard stories of the IRS depositing estimated tax checks and not crediting it to your account and then you have to track down which payment is the one they missed and it can be quite a hassle. It’s a good idea if you are sending a paper check through the mail to send identify each deposit with the quarter you’re paying.

EXAMPLE: You calculated that you need to pay estimated taxes of $1,000 a quarter. The first quarterly check is due in April so you send $1,001. The next quarter is due in June and you send $1,002. In September you send $1,003. In January you send $1,004.

Avoiding Estimated Taxes (and penalties!)

If you have income that is subject to withholding you can update the withholding to cover your total tax liability for the year. This is the simplest and easiest solution for avoiding paying estimated taxes AND avoiding any underpayment penalties that could arise. Using form W-4 you can update your withholdings through your employer or payroll processor to send enough federal tax payments to the IRS to satisfy the rules. Form W-4 is available on the IRS website: https://www.irs.gov/forms-pubs/about-form-w-4.

EXAMPLE: John works as a manager at a company making $100,000 a year gross wages. John also farms on the side and has net profits of $10,000 this year. Since his farming income is less than 2/3 of his gross income it could trigger quarterly taxes due as he earns that income. To avoid that possibility and avoid an underpayment penalty John updates his withholding at his manager job to withhold taxes that reflect a total income of $110,000 instead of $100,000.

Other ways to avoid estimated taxes are to increase your deductions, expenses, or refundable credits. You can defer income into retirement plan vehicles like IRAs, 401(k)s, and more. These are especially good retirement planning and tax planning strategies at the same time. A financial planner teamed up with an awesome tax preparer can be a dynamic duo for tax strategy and savings.

Find A Great Tax Pro

Estimating your taxes due for a year that hasn’t happened is equal parts art and science. It’s very important to work with an awesome and qualified CPA or tax professional that can help figure this out with you.

¹https://www.irs.gov/faqs/estimated-tax/farmers-fishermen/farmers-fishermen

What Are Capital Gains?

A capital gain is simply any increase in the value of a capital asset (cars, houses, stocks, bonds, mutual funds / exchange traded funds, farm ground, other investment real estate, art, etc.). You’ve probably noticed the increase in home values lately and if you own your home and it’s worth more now than you paid for it, then you have experienced a capital gain. The same goes for your investment portfolio (hopefully!). Over time the value of your account goes up and the increase in value is referred to as a capital gain.

EXAMPLE: John buys a lot he intends to build a house on for $30,000.00. John changes his mind after purchasing the lot and just holds on to it. Later, the lot is now worth $50,000.00. John owns a lot worth $20,000.00 more than he paid for it. John has experienced the appreciation of a capital asset and now has a capital gain of $20,000.00.

Capital losses work the same way, but in reverse. If a capital asset you purchased loses value, then you experience a capital loss.

Now, the confusing part. Taxes.

This is where things start to get interesting. Even though some lawmakers are introducing nightmarish capital gains (a.k.a. “wealth”) taxes on gains like John in the above example experienced, it does not yet work that way. Just because the value of an asset you own appreciates that doesn’t automatically mean you’re taxed on the gain. In fact, just holding on to an asset while it appreciates all the way until you die is usually a good way to make sure you don’t pay any taxes on it. The IRS generally doesn’t get involved until a capital gain (or loss) is realized. ¹ You realize a capital gain or loss when you sell a capital asset.

Once you sell it’s time to start deciding if you’ve got some deductible losses or reportable gains! FYI: personal use property losses (e.g. losses from the sale of your personal home or vehicle) are usually not deductible. However, capital gains realized from the sale of your vehicle and your home (there is an exemption for your house up to a limit though!) are reportable and taxed as income. Thanks IRS, that sounds about right.

Long-Term vs. Short-Term Gains

The first step to figuring out how your losses or gains will be taxed is to find out if they are classified as short-term or long-term. Count from the day after you got the asset through the last day that you owned it. If that equals one year or less then it’s a short-term holding period. If it’s more than one year then it’s a long-term gain. There it is!

EXAMPLE: John decides to sell his unimproved property for $50,000.00 for a $20,000.00 profit. He bought the property on January 1, 2021 and sold it on January 2, 2022. The $20,000 gain is classified as a long-term capital gain.

EXAMPLE: John sells the property on December 31st 2021 for the same $20,000.00 profit. The gain is classified as a short-term capital gain.

Realized Gains vs. Recognized Gains

This seems like splitting hairs but it can be very important to understand the difference between realized and recognized gains especially when you’re trading assets for other assets. Realized gains are the “profit”. A realized gain is the difference between the net sales price and the adjusted tax basis on the property. A recognized gain is the taxable part of the realized gain.

The difference could come in to play if you were to sell a piece of farm ground to someone else and they paid you in farm ground and cash. The cash would be considered “boot” since it’s a non-like property received in an exchange. Boot is taxed as a capital gain (Yes. Boot. Imagine a farmer agreeing to a trade and having to pull cash out of his boot to make up the difference in value. That’s how I remember it and how tons of 400 level tax professors teach it)

EXAMPLE: John has a friend, Dave, who has another lot that John would like to build on instead of the lot he bought. Dave offers to swap lots, but his property is valued at $40,000. John and Dave use a section 1031 exchange and Dave gives John $10,000 and his lot in exchange for John’s lot. John has a recognized gain of $10,000.00 of “boot”.

Often times, especially with investments like stocks, bonds, and funds recognized gains and realized gains are identical.

Taxation of Capital Gains

Net short-term gains (short-term gains minus short-term losses) for the year are taxed at your ordinary income tax rates. Those are generally much higher than the preferential tax-rates that long-term gains receive.

EXAMPLE: John has a $20,000.00 short-term gain from the sale of his unimproved property in 2021. He also had a short-term loss from the sale of some exchange traded funds he had in a non-qualified brokerage account of $10,000.00. John’s net short-term gains for 2021 were $10,000.00. Since John made over $300,000 from his job and files Married Filing Joint the $10,000.00 gain is taxed at 32% resulting in $3,200.00 of additional tax liability.

Net long-term gains are the total long-term capital gains minus and long-term capital losses less any unused carryover capital losses. Net capital gains are net long-term gains minus net short-term gains. Net capital losses (if your capital losses are more than your gains in the tax year) can be deducted up to $3000.00 a year if married filing joint. Net capital gains are taxed at a special tax rate table that is determined by your income.

EXAMPLE: John has a $20,000.00 long-term gain from the sale of his unimproved property in 2021. He also had a short-term loss from the sale of some exchange traded funds he had in a non-qualified brokerage account of $10,000.00. John’s net long-term gains for 2021 were $10,000.00. John’s tax liability for the $10,000 is $1,500. A $1,700 savings from the scenario where he realized a short-term gain on the property.

There are other variables that come in to play when capital gains and losses are concerned such as depreciation, adjusted basis, and more. It’s very important to work with a qualified tax professional when working on your taxes and to help you make a plan to minimize your overall tax bill over your lifetime.

1. _{https://www.irs.gov/taxtopics/tc409#:~:text=You%20have%20a%20capital%20loss,%2C%20aren’t%20tax%20deductible.}

You did it! You weren’t one of those people that waited until the last minute. You took your receipts and paystubs to your accountant months ago and now your taxes are safely nestled in the protective bosom of the IRS.

Classic.

Seriously, it can be a relief to get your taxes done because it can be stressful to try to remember everything that happened in the previous year and accurately report it. There are lots of documents to collect, lots of facts to remember, and a lot of questions to answer. I usually recommend having a professional prepare your taxes for you, preferably someone that takes the time to understand your situation and does more than just data entry and letting a software spit out numbers. This way you can be confident that you got every single credit and deduction you should have gotten and you know that your taxes were filed in the most logical way.

But what about after filing your taxes?

It’s tempting to wash your hands of taxes after your preparer sends everything off to the IRS and to wait another year. But there’s more to tax follow up than waiting on the refund or making sure to write that check the IRS expects. I want you to check 3 areas before you close your mind about taxes until your next quarterly payment is due. Don’t worry, you don’t need to be a CPA or EA to check these areas, but they’re important nonetheless and will help to ensure that you don’t have any amendments or bigger problems later.

Confirm Personal Data

This is such low hanging fruit, but is unfortunately easily overlooked. Pick up your filed return and check to make sure your name, address, and social security number are right. Do the same for your spouse and your kids (if they’re still dependents). Make sure if you have more kids than are allowed on Form 1040 that there’s a reference to “seeing the additional statement” and that all the dependents are listed there. Once you’ve confirmed all of this information you can pat yourself on the back. You’ve just confirmed the most important information on your return.

Give Your Income The Eye Test

The entirety of the bottom half of Form 1040 is the summary of your income, adjustments to income, and deductions from your income. Give it a look. Check that your wages look accurate. It should match the total of your W-2s. Interest and dividends are reported on 1099s from your investment custodians usually, so make sure they look accurate. Did you take any money out of IRAs? It is reported here as well. If you employed a Roth conversion strategy you’ll want to make sure it’s reported here correctly. There will be an amount showing in 4a if you did indeed convert. If there are capital gains reported on your return then it’s good to check Schedule D to see if they were all long-term. These gains can come from lots of places, but usually they are from a non-qualified brokerage/investment account that has been traded. Capital gains can be avoided if you don’t take money out of the account, so it’s important to know what your strategy is with them. All too often an investment manager will realize capital gains for a client at a poor time (not taking their entire tax situation into account) and cause the taxes to be much higher. It is often possible to achieve a 0% capital gains tax rate if done right. If there are any short-term capital gains on Schedule D then you need a good explanation for it. Those add to ordinary income and are almost always taxed at a higher rate than long-term capital gains.

Standard Deduction or Itemized?

You can find this on line 12a of your Form 1040. If you’re married filing joint in 2021 then the standard deduction was 25,100. If it’s a different amount you probably itemized. If it’s lower than 25,100 then you need to look at why you didn’t take the standard deduction. For some reason a lot of people spend a lot of time trying to itemize when the standard deduction is usually larger (especially now thanks to the Tax Cuts and Jobs Act of 2017). I have seen some returns where the filer has chosen to itemize for less than what the standard deduction would have been. That’s not a good plan. To verify your itemized deductions, check Schedule A. If you don’t have a schedule A it’s probably because you took the standard deduction.

Knowing whether you took the standard or itemized in the last year is helpful for looking forward to the next year. You can reevaluate your charitable giving strategies, medical spending projections, and more to see if you’ll be able to itemize in the upcoming year. If that’s the case you’ll need to plan on keeping good records and make sure you get receipts from all of the necessary deductible institutions you give money to (colleges, charities, churches, doctors, hospital, etc.). If you are pretty sure there’s no way you’ll be itemizing you can go about life with no changes!

But Wait, There’s More

There’s obviously a lot more that can be reviewed on your tax return than just these 3 areas. That’s why I do detailed tax reviews for my clients and make a plan for the upcoming year. A good financial planner knows taxes are a huge part of the value they can add, so why avoid them? Send a copy of your tax return to me for your review.

Proverbs 13:22: “A good man leaves an inheritance to his children’s children.” (NKJV)

Inheriting anything is such a blessing. I remember when my mother-in-law Debbie died suddenly how much of a blessing and a shock it was to my wife to inherit a little bit of money. Not much, mind you, but it was so much more than we were expecting. Knowing that someone loved you enough to save or set aside a little bit of something just for you is heartwarming. What an honor to receive such a gift!

I often work with people who are driven to a financial planner when they receive a gift from a deceased loved one. The grief is real, but there is almost always a fondness shared by the beneficiaries for the one who left them something behind. The question that naturally comes up after grief and gratitude is “How do I steward this gift wisely?” That’s what I’d like to answer today, specifically regarding Inherited IRAs.

IRAs are treated differently than many other gifts (I’ll write in more detail about capital gains and inheritance of “non-qualified” assets later). IRAs are tax-savings vehicles that incentivize people to save for retirement by promising a tax-break. You can have a brokerage account that is an IRA, a CD that is an IRA, an annuity that is an IRA, a money market account that is an IRA, a mutual fund account that is an IRA, and other forms of IRAs but the common denominator is that the IRS isn’t going to count contributions to that account (as long as they qualify) as income for the year you make them and you won’t be taxed on the growth/gains in that account until you take the money out (so long as you follow all the rules).

So what happens when you inherit an IRA?

Recently there have been some changes made to how inherited IRAs work and many words have been written and many questions have been asked (and still are being asked) of the IRS about how this is all going to work out after the SECURE act passed in 2019. Usually unless you are an Eligible Designated Beneficiary your only option is to take out the entirety of your beneficiary IRA by the end of the 10th year after the year of the prior owner’s death. This is what is known as the 10 year rule. You can take it all out evenly, all at once, or wait until the end of the 10th year to take it out, but it must be emptied by the end of that 10th year. There is a small caveat in this rule, if the decedent died after their Required Beginning Date (when they needed to take RMDs) you may be able to use the old “stretch” provision. That’s pretty simple really, but figuring out which method will work best for your situation takes a lot more analysis. That’s because distributions from an inherited IRA will count as ordinary income and could cause you to fall into a higher tax bracket. It’s very important to have a plan to maximize your inheritance and keep the IRS from getting more than its fair share.

If you are an Eligible Designated Beneficiary (Surviving Spouse, Disabled, Chronically Ill, less than 10 years younger than the decedent, a minor child, and some “see-through” trusts) then you may be eligible to stretch the distributions out over your lifetime according to a table. This is sometimes more favorable than the 10 year rule and needs to be investigated thoroughly if it’s a possibility.

This has been just a short intro into what to do with an inherited IRA and a flow chart would be incredibly valuable in this scenario. Hey. I’ve got one. Check this out! If you have more questions reach out to a qualified professional for your specific scenario.

Wouldn’t it be wonderful if instead working because you had to you could work because you want to? It’d be nice to wake up in the morning motivated to serve and join in your community, rather than wake up slightly agitated that you’re off for another day serving someone else’s goals and desires. I know almost everyone that works has felt this way and more and more people are aggressively putting into action a plan to realize financial independence. Even though the old adage “Do something you love and you’ll never work a day in your life” is attractive, it really seems unattainable to many of us. It’s not as simple as just quitting the job you hate and starting to do some stuff you like. We’ve all got competing desires and have to do our best to make rational decisions in order to fulfill our responsibilities and passions. So how do we work towards financial independence?

Setting Expectations

Most of us don’t have the expectation of driving luxury cars or living in mansions. Though that’d certainly be nice I guess. When I once told my daughter I considered our family to be rich (because we have never gone hungry and have refrigeration, indoor plumbing, healthy friends and family, etc.) she looked at me with confusion and said “If we’re so rich then where is our butler? Where is our mansion?” I had to laugh! At some level I still think that way too. Everyone has different definitions of success and those definitions manifest themselves differently in everyone’s lives. Some folks will never be happy with what they have and always need just a little more and others are perfectly content working the job they have as long as they can with relatively little disposable income.

I’m writing this to the person who believes in working hard, giving generously, and providing for their family. This is for the person who still dreams of pursuing their passions with the aforementioned goals. We all have to make tradeoffs to get what we want. Sometimes we regret those tradeoffs, but usually we’re still pursuing what we love. Take George Bailey in It’s A Wonderful Life for an example (I often do). He gave up his personal dreams of glory and exchanged them for responsibility and duty, but in the end he would have been a fool to go back and change anything if he could have. He was still pursuing priorities he valued (family, friends, integrity, community, etc.) and was all the richer for it.

I was in rock bands in high school and immediately after. I ignored college scholarships in order to chase my dream of playing music professionally with my friends. I also wanted to have a wife and family someday. When the band started to fizzle and the grind got me down I pursued the passion of having a family. I wanted to provide for my wife and family so I had to pursue work. I was passionate about my family farm and tried to make a go of making that my job, but ultimately failed at that. I tried several other jobs and the best way to pay our massive debt load was to take promotions in retail. I hated those retail jobs, but I loved my family, so I did it and by God’s grace He led me to a career in financial planning that provides for my family. As a side-bonus I actually love my job now.

My wife is a photographer and consummate free-spirit. She was the barista of the year for Biggby Coffee and she loves talking to people. If you know her you know she is extremely quick to get into deep conversations and is an open-book. She loves meeting people and talking to people. She is also passionate about homeschooling our kids and taking care of our home. She has made tradeoffs too!

We have to balance what is important to us. There is another old adage that goes something like “we can have anything we want, but we can’t have everything we want”. This means we have to prioritize. So when I talk about “financial independence” it can mean various things to different people. The definition I’m going to go with is all about getting to the point where you have the freedom to stop working at a job you don’t like so you can pursue projects you are more passionate about; all while fulfilling your duty to your family and neighbor.

After setting your expectations for what financial independence looks like there are only 2 factors that play into when/if you can be financially independent.

Managing Expenses

I have often told clients that I can tell them precisely when they can retire if they can tell me exactly how much money they’ll spend and when they’ll die. We can definitely control one of those variables, but it’s not going to be exact so when I talk about managing expenses, it’s actually just a secret code for budgeting. The people I know that are closest to financial independence or have actually already achieved it have this one trait in common. They control expenses. They usually do this by having a written budget and sticking to it. It’s a hard habit to start, but once you do you’ll be thankful for it.

The more detail you have about your current expenses, the more comfortable you are with how much you can spend in different categories in life, the more competent you are with disciplining yourself results in improved efficiency and will increase your confidence in your ability to become financially independent. The more accurately you can project your future expenses, the easier it is to back-in to how much money you need to have before you leave the job that you dislike. The most common and important expenses to get under control are: debt, healthcare, daily living (food, rent, etc.), and taxes.

If fear is the mind-killer then debt is the independence-killer.

Any debt you have (especially debt wrapped up in depreciating assets like a car, boat, or ATV and unsecured debt) is in direct competition with your independence. The less you owe others the more freedom you have. There’s a reason Proverbs 22:7 says “The borrower is slave to the lender.” Becoming completely debt free is a great idea before being financially independent but at the very least it should be a priority to remove all “bad” debt (e.g. vehicle loans, credit cards, student loans, personal loans, medical bills, and back taxes).

Mind your health, mind your wealth.

Healthcare is likely to be your largest expense in seeking financial independence. This is usually because many folks have health benefits through their primary job. If you leave the job you’ll have access to COBRA for a period of time, but it’s usually cost-prohibitive. Seek out alternative health plans through healthcare.gov, different sharing ministries like MediShare or CHM, or contact a local health insurance agent to look at private options. Do this before you leave your job. I’ve talked to many people who think financial independence is a fantasy because of how expensive healthcare can be, but they’re often surprised that it can actually be affordable with just a little leg work. Whatever you do, you must have an idea of what your healthcare costs are going to be before making a huge life change.

Hope clouds observation.

Daily living expenses are the easiest to predict and track. You’re already spending money on these categories. Maybe you’re spending too much, maybe you’re not spending enough, I don’t know and I don’t care. I don’t want to judge you on this. We all value things differently. Some folks love eating at restaurants. Some people love driving a new car. Some people love traveling. The important part about your daily living expenses is that you track them so you can predict what they will be in the future. This is a data analysis, not what you “hope” you’ll be able to live on. If you have a higher standard of living, you’ll need more income to support independence than if you have a lower one. It’s all about those tradeoffs, but you have to track them. I recommend a budgeting software like YNAB (youneedabudget). It’s easy to budget and track and be on the same page with your spouse with that one particularly, but use whatever works for you.

The taxes must flow.

Taxes are a sneaky one. Income taxes are based on, you guessed it, income. Managing your income is in the next section but it’s important to have an idea of your current tax situation when planning for your phase of financial independence. Location of your taxable and non taxable assets for when you start living off of your investments and alternative income streams is extremely important. You don’t want to have a great plan for financial independence ruined because you forgot to include taxes! Reducing your amount of taxes paid while preparing for financial independence is a huge benefit and usually requires some professional help. There are lots of ways to do this, find a great CPA or tax preparer to team up with a CFP® Professional who specializes in tax strategy (hey! that’s me!)

The basic premise is this: the greater reduction in expenses you can make now – the more you can save. You want to make sure you’ve got all your ducks in a row before you say “I DECLARE FINANCIAL INDEPENDENCE”.

Managing Income

The more income you have the better – but it all is relative to your expenses. How much income do you need is the first question and that should be answered by doing a comprehensive audit of your expenses. What comes next is actually making the leap to independence and then managing your income from there.

Diversify your income streams

Having multiple income streams funding your independence reduces risk and therefore increases confidence in your plan working. Some common streams of income for people of traditional retirement age (59.5 and up) are social security, pensions, and retirement accounts (e.g. 401(k), IRA, Roth IRA). Some other common income streams are part-time jobs, self-employment, taxable investment accounts, and real estate. Plan out where you can realistically expect income from when you’ve shut off your primary job and calculate how much and for how long you can realistically expect that income to last (hey! I can help with that!).

The mind commands the body and it obeys. The mind orders itself and meets resistance. Location of assets matters.

The location of your assets plays an important role in this as well – it will help to manage the tax expense associated with realizing income from these accounts. Increasing your primary income and cultivating savings habits will help to ensure you’ll have adequate income for when you leave your primary job. It takes some planning to have the right type of account funded for living financially independent lives. Many folks overlook the value of using a non-tax qualified account (such as an individual or joint brokerage account) when saving money for financial independence. The tax deferral benefit of retirement accounts like Roth IRAs, 401(k), and 403(b)s are great, but are of little benefit when there’s a fat tax penalty on any withdraws you make at age 49 and that’s when you’re going to be needing to use them. In this regard an ounce of prevention is worth a pound of cure, so make sure you’ve planned your income sources well for tax purposes. Look for professional help (hey! me again!)

Do it.

You have my permission to take a chance. “It is impossible to live in the past, difficult to live in the present and a waste to live in the future”. The great thing about jumping into financial independence is that you probably have enough skills, experience, and talent to find another job if you need to. Don’t let fear of failure stomp on your pursuit of your passions. Remember, fear is the mind killer.

_{Random quotes in this article are poorly quoted from Frank Herbert’s Dune, which I highly recommend reading for enjoyment.}