Rest in Peace, E.T.F. A Love Letter from a Dead Man and a Net Worth Update

Today’s post is the fourth installment from the anesthesiologist in his first year of practice with a plan to reach financial independence within a decade.

He’s got a goal of $3.3 Million, or enough to have an allowance of $100,000 a year with a very safe 3% withdrawal rate.

He’s seen hardship in his personal life lately, which prompted him to pen this piece. Read on for his love letter and an update on his progress towards financial independence.

Rest in Peace, E.T.F.

 

Did I get your attention?

Good.

Breaking news! You are going to die. Sorry to be the bearer of this morbid information. Sadder still, the fact you’re the one reading this article probably means you are the financial nerd in your family. What happens when your other half has to take over control of the household finances suddenly? I know that you might think discussing low expense ratios and the 4% rule is quite exciting, your partner likely does not.

Young E.T.F. had a brilliant idea during residency to take his wife on a romantic date and discuss the merits of index funds. Let us just say, right thought, poor execution. I have made rapid improvements in my approach since this sad episode.

Mrs. E.T.F. is brilliant, but personal finance is not her first-choice leisure activity. She is an active participant in our financial planning, but I handle day to day details. We try very hard to walk this life together, and that extends to personal finance. Therefore, if I get hit by the proverbial bus, I want her to be able to move forward financially without a hitch.

Contract DiagnosticsThis topic has taken on particular relevance after the recent deaths of people around me at young ages. I have had a first-hand view of the lives of the loved ones left behind, and the sights are not pretty. Simple questions such as the location of bank accounts’, and the cost of monthly bills were met with blank stares. Leaving my wife in a similar position is one of my greatest fears.

That sickening feeling I had in my gut trying to help a friend prompted the writing of this article. I want to be able to leave simple instructions that can be easily interpreted by Mrs. ETF. I decided the instructions must fit on an index card.

 

 Love Letter From a Dead Man

 

If you are reading this, I miss you and love you:

1. Pull out the thumb drive (Banking information, Retirement Accounts, Investment Plan, Life Insurance Information, Passwords, Recent Tax Returns, Marriage Certificate, Birth Certificates, Credit Report)
2. Get a legal pronouncement of death, call the funeral home, obtain 15 copies of the death certificate
3. Take my will to a board-certified estate attorney (Get multiple copies of letters testamentary)
4. Inform Life Insurance Companies and obtain payouts
5. Call social security for survivor benefits
6. Cancel other insurances, my accounts, and make yourself primary on credit card accounts
7. Call my employer about benefits
8. Inform credit bureaus of death
9. File last tax return
10. Investments: Option A. Bogleheads three fund portfolio. Option B. Hire Vanguard to manage the investments (Vanguard Personal Advisor Service)

I suggest everyone reading this article create something similar for a loved one if you pass. This simple exercise highlighted my mortality. I have hugged and kissed my wife and children a lot since I started working on this piece. I noticed I take too many things for granted until I had to contemplate their absence. Hopefully, this index card is useful in one hundred years. I will be grateful each day for my blissful life.

 


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Net Worth Update

 

Slow and steady will win this race. The massive market correction that will slingshot me past POF in my chase to beat the ten-year mark refuses to materialize. I think I should start speculating on bitcoin or maybe the Iraqi dinar, or better still the lottery. Someone has to win, right!

On second thought, I will just stick to index funds and get my thrills elsewhere.

Please comment below on anything you would add to the index card, it’s a living project, so I want to continue to optimize it. Thanks, and see you soon.

 

 

 

[PoF: As he states, E.T.F. is making steady progress. While the dip in February didn’t help, he has seen his household net worth grow by more than $20,000 since we last heard from him a couple months ago.

He remains invested aggressively, with a 100% stock allocation in his non-cash investments.

I have yet to create such a love letter, but the information on the site, and the fact that my wife has read it all, is a step in the right direction.] 

 

 

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Have you written a financial “love letter” from beyond the grave? Do you know how your household money would be managed in your absence? 

 

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60 comments

  • Thanks for the morbid reminder this morning. I’m not as concerned about myself and my index card but my aging Mother and her bank accounts, insurance policies etc. I’d love to have at least a small index card from her….

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  • Great post. Sometimes the morbid topics are the ones we need to here. My wife is not very financially literate at this point (despite hearing me talking about everything you just mentioned). She trusts me to take care of all of the big picture stuff like investing and getting out of debt. So, this hits close to home.

    We do have wills in place and so maybe I’ll pen this letter and then put it the binder which contains our wills.

    TPP

  • This is a bit depressing but necessary for sure! Since I’m not yet married, I’ll put the plan out with my parents. Also, I thought this was about the future death of the actual etf so was mildly curious. Nice title there haha, made me click!

  • ArmyDoc

    I guess one more great thing about the military is getting my spouse prepared for the worst. I wrote my first version of this kind of letter prior to my first deployment and have updated ever since.
    I also suggest writing separate letters to each child to have after you die. Even if you tell them often how much you love them, it’s good to leave them with a tangible letter that they can reread as they go through life.

    • Ether to FI

      Great idea about writing individual letters for the kids. I will add this to my “to-done” list. I wish everyone prepared for the worst like the military. Thank you for your service, and for adding your thoughts.

  • I’d expand on #1 and put together a document that explains what everything is and how they’re related. All of those accounts are just numbers. It’s helpful to have something that explains what they’re for, who the point of contact is, etc – just to make life easier. We have a document that goes into detail (this is especially useful for private investments, where there’s little public record) so you don’t have to be a financial forensic scientist to figure it out.

    • Ether to FI

      Thanks for commenting Jim. I was trying to simplify for the post, but you bring up a really good point. The actual flash drive has a Table of Contents, which explains in detail each category. For example, retirement accounts have each individual account name, number, logins, passwords, how that account fits into the overall financial picture.

  • VagabondMD

    I love the index card approach, and I have been meaning to get this together. Good idea for a summer project.

  • Dr Money Tails

    Thank you ETF! This is my favorite series as I can totally relate – I am also a new attending myself (I believe we finished training at the same time) and have a very similar goal as you (reaching FI in 10 years or less).

  • Jacq

    I know both of my parents have wills. 2 thanksgivings ago, dad showed me the Estate binder. It has all the important info, thankfully he has 2 if his brothers picked to manage things before I’d be in line for the job. Knowing it’s all written down makes a daunting task seem more manageable. My step mom had to chime in that it’s only incase they have both passed. (Duh!*eyeroll*) but it’s also good to know it’s there if she asks for help in the future. I’m very much hoping for good healthy long lives for everyone involved.
    After seeing the binder, a coworker was killed in a traffic accident and a former coworker died of a heart attack at 38. That prompted me to finally get a will in place. I do still need to organize a list of accounts.
    As much as we all want that “sticking around for a good long time”, I think it is an amazing gift for our loved ones to have….wills, estate plans, if I’m gone letters or index cards. Thank you for sharing yours!

  • I wonder if I was the only one who expected this to be about the death of Exchange Traded Funds.

    • Arfana Kishan

      I did too and I was very curious!

    • Ether to FI

      Another one hooked by our title, I hope you enjoyed the article even though it was a completely different topic.

      • It was a very good article. I’m certainly going to review some of the steps you outlined.

        I was hoping give some constructive criticism. For clarity, I think the introduction should have introduced you as the author of the Ether to Fire (ETF) blog and not just “an anesthesiologist in his first year of practice.” It’s possible to do both.

        I think it’s weird, perhaps misleading, for a financial blogger to go by the acronym ETF (especially capitalizing the “T” when you don’t seem to do it in the full name.) What would you think about someone starting a blog called “Stocks and Pensions” and referred to themselves as S&P? Odd, right?

        • Ether To FI

          Hey Lazy Man and Money, I will start consistently capitalizing the T in my full name. I don’t have a blog, it’s just these articles I write for POF. There was no attempt to purposely mislead anyone. We assumed since this was the fourth article in the series, people would know who I was. We will be sure to clarify the name in the future.

  • RocDoc

    Great reminder and as the financial nerd in the family, I need to get that index card written for my husband. Thanks for the excellent summary!

  • Catherine T

    I’m the financial nerd in the family, my husband (the FM doc) would more likely put a stick in his eye than sit and talk finance. His response to anything is “I make good money and if we need more I’ll just work more”. So, obviously, I’m more worried about his passing than mine.

    My dad has this all set up on a thumb drive as described. I need to do that. I suspect my husband’s response would be to find another “me” quickly to install in the household manager position, rather than figure this stuff out- but you never know.

    • Ether to FI

      Hey Catherine, After the recent deaths, I realize how fragile life is even more than usual. Tell the hubby, it’s a gift he would be giving you to sit and discuss this issue. Working more only works if you are not dead or disabled.

  • Toby

    We don’t use an index card, but a shared 1Password app. It has all the needed information, logins, passwords, account numbers, secure notes, and more, all behind a tight curtain of security. In 2018, password managers are must and there are lots of them out there to choose from.

    • Ether to FI

      Passwords are painful, too many to remember. I need a password manager in 2018.

    • Steve

      Toby, we use the same thing. My wife doesn’t pay much attention to all of this, but she has access to all of the account info through 1password. Always good to be prepared (and secure)!

  • Gasem

    This is a great post. This topic is the Mack Daddy of topics. It is clearly written by someone who is a young attending in the accumulation mode. I’m an old, battle scarred, retired attending in the distribution mode. Not to be critical, but what this example doesn’t show is insight into what happens to a family in the distribution mode. What it does show is the start of insight. It identifies the problem. Today an index card. Tomorrow a sheet of paper etc. as the intricacies of the problem unfolds. It seems to me if you are going to make a plan you might as well make an effective and efficient plan, and that means you have to think through the consequences till her death and into your kids legacy. I very much applaud this topic being broached because in reality it is why we go to work everyday. We don’t work so we can jet around to friggin Europe for a six month vaca or win the “prize” for being the youngest to FIRE ever! Those make nice headlines and blog topics. We work to provide real security to our families well into the future, and this physician’s post is bottom line to that endeavor.

    Here is a simple example: Taxes on $100K per year for joint married filers is $8739 meaning you live on $91,621. In the FIRE scenario most retire early types are expecting to supplement with some kind of side gigs, locums or real estate etc. Taxes on $100K per year for a single is $15,410 meaning she and the kids live on $84,590 and no side gigs. If you FIRE at 40 and get hit by the bus at 41, the kids still have to get through teen age years and college. The taxes get much worse if RMD gets involved which eventually it will happen. Suddenly that 3.3 mil is throwing off a lot less than advertised. IMHO you need a lot better plan than “Call Vanguard”. This is exactly why I use a personal adviser. He understands my mind and my style and my concerns. I have rational plans and contingencies made. We have my portfolio tuned to a fare thee well for distribution. My wife knows him and trusts him and can call him in a heart beat for help. That alone is worth the management fee to me, which is NO WHERE NEAR 1%. More like 0.35-0.4%. I get more advantages from this relationship beside the peace of mind like access to better investment strategies but the peace of mind knowing I have addressed the security of my family deep into the future is easily worth the price of admission.

    My Dad set up my Mom with Fidelity as an adviser for when he died and they had her in all kinds of silly BS. My brother who is a CFO and an accountant took over her mess and she has considerably more money today than when Papa passed despite the greatest recession since the great depression. She has more money because she has no portfolio BS and my bro understands risk management, taxes, proper portfolio allocation, and budgets. My Mom just enjoys her life. My adviser understands all this too regarding my family. Sometimes the little dab it costs to hire an expert is well worth it. It’s a little counter cultural to speak this way in the FIRE community where everything is DIY, but there are aspects of estate planning that deserve something a little more credible than an echo chamber on a internet forum.

    • els

      Thanks for the viewpoint! Everyone has their own way to look at these problems.
      The first key is looking at them. The younger the better….
      The second is finding where your own comfort zone is.
      I could easily retire now (47) if I was comfortable cutting back expenses and providing less financial support for my children in the future, but I love my job and get paid well so choose not to follow my bliss just yet. I could easily cut loose our financial advisor and manage our assets myself. My wife doesn’t like that. She isn’t the financially savvy one and wants someone to lean on if I suddenly am not there. Totally worth it to me…. I love the comment sections almost as much the articles. POF has taught me a ton.

    • You make some good points and estate planning absolutely involves more than you can fit on an index card. It doesn’t rule out working with lawyers, advisors, etc… but the index card or binder should have those people’s phone numbers handy.

      I’d like to point out that someone living on $100,000 after FIRE is not paying taxes on $100,000 of taxable income. It’s not difficult to construct a portfolio with a decent amount of money in taxable and / or Roth accounts that has you paying no federal income tax with a $100,000 or higher annual spending allowance. The taxman leaveth!

      Best,
      -PoF

      • Gasem

        I totally agree. It absolutely IS possible to make the right choices and I recommend that but the time to do that is before not after, and you need to clearly understand the after. It’s hard to effect change if you’re dead and your wife is a novice. It’s also possible to DIY but there are a lot of moving parts and changing law

        Tnx

    • Ether to FI

      Hey Gasem, I understand your viewpoint, and probably will start meeting a financial advisor once a year for a review with my wife, so she has someone to turn to if the bus arrives early. However, my goal is for her to become as competent on this topic as other areas of her life, because there is no reason she cannot learn. Estate planning is complicated and I will use experts. She will do the same if I am not here. Thanks for the comments.

  • Michivegan

    I have a version of this created for my wife but needs some updating. This topic is timely as my father just suffered a stroke this past weekend and my mother is having trouble locating passwords and overdue library items. He’s in recovery now but probably is the start of more to come in the future. Fortunately they have a competent financial advisor (necessary for them) so she’d be fine on that front, but it’s so much more. I think all of us in the family have renewed thoughts on this topic. Thanks for the reminder.

    • Ether To FI

      Sorry to hear about your father. Wishing him a speedy recovery. Happy this is a small reminder. Thanks for commenting.

  • lisa

    I have 4 envelopes, each filled with the family’s life insurance policies, D&D policies, work insurance policies, utility companies, retirement accts, investment properties, tenant info, mortgage loan, student loans …As well as passwords.

    I do need to update it as we changed homeowner’s and car ins policies, but it’s there. And DH has been informed of the location of these envelopes.

    I felt good when I designed this “portfolio” but honestly, I don’t feel that good about discussing it as nobody in the family wants to hear about it. They physically walk away from me if I mention it. I’m sure it will come in handy at some point. Just not now.

    • Ether To FI

      Hey Lisa, it sounds like you are ready for the inevitable. I have experienced the same reaction when I start talking about end of life planning. None of us are getting out of life, alive, I wonder why people are so resistant. Thanks for the comments.

  • Thanks for bringing up this important topic. We have a will, but it doesn’t cover all the issues here. I’m the “math/finance nerd” of the family. My wife’s eyes glaze over after discussing this stuff for even two minutes.
    I copied your list and printed it out. I will edit it and customize it for my family. I hope to live a long time, but if not my wife thanks you for helping us prepare better.

  • I mentored a fellow doc in financial matters a few years ago. Now that he and I are on the same page, I’ve asked him to assist my wife to get things in order if I die suddenly. She understands some things but doesn’t enjoy them enough to do it how I would have it done even with a list. I’ll help his family in the same way. This is in addition to a will and other necessities of estate planning. The many benefits of mentoring…..

    • Ether To FI

      Mentorship does have its benefits. Great you have someone you can trust to help, and you can do the same for them. This just gave me an idea to speak to a friend with the same mindset as me and set up a similar deal. Getting great ideas from the comments, thanks for leaving your thoughts.

  • As I’m designated executor for my in laws estate, I’ve had plenty of these conversations with my mother in law, but I’ve not had them with my husband yet. Something I really need to do because he would have no clue where to find anything.

    • Ether To Fi

      Hello Angela, I hope you and your husband have the conversation soon, each new day is not promised. Thank you for commenting.

  • Check out everplans.com. I debated about a flash drive in a safe vs cloud-based, and I decided to go with the cloud-based approach. My wife hates this stuff, so if I kick the bucket, we decided that she would be best off with a website with all of it organized and laid out. Another nice feature is that you can give access to different parts of the plan to different people. It costs a few bucks a month, but if it is needed upon my early death, it will be a godsend.

    • Ether To Fi

      Thank you for the awesome tip. I will have it on both a flash drive and have a copy in the cloud. Thanks for commenting.

  • Mom MD

    A couple of other things to add to your index card. Make a hand written or typed and not saved list of all your passwords, especially those for your business accounts for the practice, for banks, Vanguard etc. (or the password to your Last Pass account).
    Family also needs a list of the locations of all your financial documents, deeds to house and autos, military discharge papers, etc. , the account numbers of the life insurance accounts (we found out about the existence of one of my dad’s policies years later) and all the phone numbers to make those calls. In the Last Instructions letter tell where the key to the safe deposit box is and which branch of the bank with address. Check with attorney about where the will is to be kept. Keep a copy at home for reference. Once you die the bank will seal the box upon notification of death and you can’t get to it unless you also sign for the box or have properly executed the legal directives .
    I’ve been told to have an envelope in a known place with last instructions labeled with something nondescript such as “this is the envelope” as a sort of treasure map to what to do next with instructions leading to the documents, combinations, keys and details in a 2 step process rather than having it all in once place to prevent burglars from getting the information. The letters, will, safe deposit keys and details do no good to anyone if locked in the family safe with no one knowing the combination to the safe.
    If you are not a salaried employee, you should have a plan in place for the death or disability of each of the partners to take away the burden of selling their part of the practice and collecting their accounts receivable. If you are a sole practitioner that is even more essential. It takes a while to wind down a practice, no money is coming in and your employees need protection and a salary too.
    Not talking or pretending that you will not die is NOT a kindness. Preparation and discussion are not fun but are a form of stewardship that is a very loving gift to your family. It gets a lot easier to have the discussions after the first one. These discussions and planning events need to happen at least yearly.

  • Mom MD

    Everplan sounds like a much more organized form of above. I’ll look into it. Please have the discussion with your parents. It really does matter to the surviving spouse.

    • Ether To Fi

      Thanks for commenting and the additional details added in your first comment. I will incorporate your suggestions. Still working on the parents.

  • Thanks for the post. Way too many people we know have been dying recently. Since I handle most of the finances, this is another reminder for me that I need to do these hard to talk about things sooner rather than later.

  • ann

    Can you expand on the password stuff. I have so many accounts I don’t know what to do.
    I don’t trust anybody. Certainly not a lawyer. I’m single.
    This made me actually lose a few hundred thous this fall.
    I’ll mention the anecdote as I felt the author was making fun of “esoteric” investments…like BTC (bitcoin).
    I started buying a 5$, but bought my bulk at 100$ . Most of it stored on a secure server thru a company/exchange. This fall, I wanted to sell around 18k/btc (simple Fibonacci extension, classic technical analysis, not voodoo) and…..couldn’t. remember.the.password.
    Called and emailed the company but in the big bubbly frenzy COULD NOT connect for 2 weeks. and sold a bunch at 10k/btc.
    yes big difference. BIG f. difference.
    No recourse.
    Esoteric investments are not esoteric any more than anesthesiology. You just need competence. Like anesthesiology it requires hard work. But the profit are enormous, gigantic if you know how.
    …..and remember your passwords.

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  • MW

    I have a “Legacy Binder”, much like this, with more details, such as phone numbers to call for Social Security, Insurance companies, HR. I also include instructions on how to get into my password file so my spouse can get into all the accounts. I want it to be as smooth as possible. Not just for my spouse, but in case both of us die, for the kids too. I’ve told our oldest about the binder as well.

    This “love letter” has a couple items I’ll integrate as well.

    A couple good related resources to consider:
    http://www.budgetsaresexy.com/great-idea-legacy-binders/
    http://www.erikdewey.com/bigbook.htm

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