Bentzen’s Blog

The Recession is Over
by Brian Bentzen

Although I have no evidence to prove this, I believe this recession has either hit bottom or come close to it.  The savings rate has increased drastically, from less than zero percent, to 5% last report I read.  That is a major shift, and when spending drops by 5% in an economy that is largely driven by consumer spending, it makes sense that the GDP would decrease.  Add on to that the falling housing prices and loss of trillions of dollars of asset values on bank balance sheets and you have a recipe for a deep recession.  But can things get worse?  I’m reminded of an old joke.  The optimist looks at a bad situation and says, “Things couldn’t be worse.”  The pessimist slaps him on the back and with a smile says, “Of course it could!” 

The problem with saying the recession is over is that you can’t determine when the recession ends until long after the fact.  We probably won’t know until it has been over for months.  We didn’t know that it started in December of 2007 until late in 2008.  We do know that in February we lost 697,000 jobs, home sales decreased by 7.7% in January, and consumer spending rose by 0.6% in January.  GDP shrunk by 3.8% last quarter.  Maybe I should rethink my premise.  There is fear about job loss, unrest about the stimulus package and bailing out troubled homeowners, anger at banks and government.  This all adds up to a ton of negative sentiment about where our country is going.  But we will recover from this. 

The recession could have ended yesterday and you wouldn’t know about it until August 2009.  Thirty years from now, we’ll look back on this recession as we look back on the recessions of the early 1980s.  Our economy has grown.  Our standard of living has increased.  Our lifespan has increased.  Our technology has improved.  Our investments have paid off.  Continue to believe in Americans and American companies and we’ll continue to improve.  Encourage your children to stay in school, become skilled workers, start a business, accept challenges and take appropriate risks.  Take your unemployment or underemployment as an opportunity to improve yourself.  Learn a new skill, volunteer to help others in worse situations, plant a garden, get rid of luxuries, move to a new location.  Do what you have to do.  When we rebound from this recession there will be new job openings.

If you are a homeowner who is underwater, Uncle Sam will help you, even if it makes a lot of people angry.  Most underwater homeowners are not speculators trying to get a reward with no risk.  Most are hard-working Americans who made the assumption that home prices would not decrease and got screwed over.  We’ll help you, and even if we gripe about it, we understand you need help.  And if Uncle Sam doesn’t help, there are plenty of private investors who want to help you break even, or come close by buying your mortgage at a fraction of what it is worth on the bank balance sheet.  Again, this beats the alternative of declairing bankruptcy.

When things turn around, will you be ready to take advantage or will you get left behind?  New businesses will start to replace those that went under.  Investors are keeping their money on the sidelines waiting for indicators that they should move back into equities.  Will you get in on the way down, on the way back up, or invest after the recovery has already occurred.

The recession is over (maybe).  If you still have your job, continue to save and invest in America.  In thirty years you’ll be glad you did.  If you are unemployed, this is a good time for a change.  If you are mobile, there are a lot of jobs.  If you are stuck in your current home, stay there and keep trying.  Things could be worse, honestly.  When we regain the optimism we had just a few years ago, we’ll see things turn around.

Truth be told, I’m not all that optimistic.  I’m continuing to invest every single paycheck and even if the Dow drops to 1000 I’ll continue to put my money into companies with good balance sheets, cash balances, low debt and a large moat.  And I’ll continue to invest in index funds.  I’m just going to continue going about my life as I normally would, with the exception being that I’m trying to save even more than usual.  I’m not saving because I’m scared of the recession or fearful of my job.  I’m more scared of missing out on all of the great deals available on the stock exchange. Is the recession over?  Who knows.  It could last for years.  It could be the worst depression we’ve ever had.  But I’m going to choose to hope for the best and I hope others will choose to make the most of their situations as well.

Goals for 2009
by Brian Bentzen

Happy New Year! It’s January 2nd and time to get back to business. The first rule of order for a new year is to decide upon or review your goals.  I don’t like calling them resolutions.  Resolutions are made to be broken. I’d prefer to set a goal so I can aim for a destination.  How I get there will be the fun part and doesn’t need to wait for December 31 for me to think about.

There are many ways to organize your goals. You could use post-its, write a note, make a diary entry, make a post on your blog, or just take a few minutes to think about what you want to accomplish. You can break your goals down into categories if you want to and into time frames. The key point is that you should try to be organized in your thinking so you can come up with some goals that are attainable, some that are not attainable, and some that might be attainable down the road.  I’ll divide my goals into professional, personal, and financial since I think these are all encompassing categories.  Then I’ll further divide the goals into short term (2009 goals), goals for the next 5 years, and long term goals (beyond 5 years)

After you define your goals, you’ll have to come up with a plan about how you would like to go about achieving them.  For psychological reasons I think its easier to start with the short term goals and check them off as you go.  

Next year I can review my goals and update them.  Many of them will probably stay the same, and many more will come up throughout the year.

Short Term Goals (2009 Goals)

Professional:  

Improve inservice exam scores:  

Every year of residency we take the inservice exam.  This exam approximates the real anesthesiology boards and you receive a score in your mailbox along with a list of suggested study topics.  This year I plan to organize my studying at least partially by keyword.  I’ll do small writeups on the keywords and post them on my other website, Anesthesia Explained, which is not yet up and running.  The rest of my studying will be by reading relevant chapters and topics, and wherever else I find gaps in my knowledge.

Complete a publishable case study:

We have to complete two writing assignments during residency, so I’d like to get one out of the way sometime in the next 12 months.  I already have 3 or 4 good cases to choose from.  The write-up and background research for these four cases are already started.

Increase web traffic:

The only way I know of to increase web traffic is by increasing content and providing information that is relevant to my readers.  I’d like to increase my posting to at least once a week, but will plan to keep my topics spread out over a number of subjects that I consider useful or interesting.  If some types of posts are more useful to you, just shoot me an email or comment about what you want to hear about.

Personal:

Two outdoor vacations:

The past few years I’ve gone on one to two skiing or backpacking trips a year.  I’d like to do some hunting, backpacking, skiing, cross-country skiing, fishing type trips.  One will be coming up in February or April and the other later on in the year.  I haven’t picked out a destination yet.  I’ll have to sit down with Melissa to figure out where we will go, and exactly when.

Continue working on marine reef aquarium:

This is my big little hobby.  I have a few tanks plumbed together.  The 90 gallon reef is in the living room.  Below it is a40 gallon sump that is plumbed to a 65 gallon refugium, and that tank is plumbed to a 40 gallon tank I plan to use to grow out small corals.  All told it adds up to about 180 gallons of salt water in my living room.  The other 55 gallons are taken up by rocks and sand.  I only have four little fish and three shrimp, but there are a lot of coral.  Maintaining the tank is a bit of work every week, but I plan to continue and would like to grow out enough coral so I can sell some and support my hobby.

Get back into shape:

I think I’m officially out of shape.  I have a habit of not working out much during the winter.  We’ve been cleaning out the garage and in a couple of weeks we’ll have some weights.  I’ve started doing squats on the exercise ball for ski season but need to do more cardio if I want to be able to enjoy a trip out west.  I’d like to get back a lot of the strength I’ve lost over the past year and would like to be able to run 5k in 21 minutes like I used to.  I could bench 225 pounds a year ago, but I’ll have to start at 135 pounds in a few weeks.

Home:  

The house needs some repairs.  The vent for the laundry goes through the ceiling in a very awkward manner.  This fall the vent hose sprung a leak, the drier plugged up with lint and the moisture damaged the kitchen ceiling.  To fix it, we’ll have to cut some holes in the living room and kitchen ceiling and put up new drywall.  I’d like to tile the kitchen, bathroom and entry.  Some rooms need a little bit of paint for color or touch up.  The back patio could use some more plants.  There are always a lot of little things to do around the house.  

Financial:

Save $1000 a month:

This really means I need to reign in my spending.  In July I’ll get a little bit of a raise, and my mortgage is going down by $100 due to a change in my local taxes, so I hope this is a reasonable goal.  I also have some debt to pay off, but its all in deferment until I have a better paying job.  

Medium Term Goals (2014 Goals)

Professional:

Complete residency, pass boards and oral boards, partnered in private Anesthesiology practice:

This goal is all about consistency, continuing to work hard and preparing towards my exams.  I’m not sure where I’ll be practicing after June 2011 when I am done with residency.  Part of me would like to go west and look for wide open spaces, but the other part of me wants to stay close to home.  So far, I’ve always stayed close to home for school and work.  

Personal:

Marriage, children:  

This isn’t entirely in my hands and will happen when the time is right.

Home:

If I stay in the Harrisburg, PA area I’ll plan to continue living in my current townhouse until I can get my higher interest school loans payed off.  I don’t want a big house, but I’d like to have some land.  I’d like to be at least a few miles away from the highway so I don’t have to hear it at night.  And I’d like to be able to look up and see as many stars as I can at my parent’s house outside Gettysburg.  This might mean a bit more of a commute, but I think its well worth it.

Fitness:

I’ll be 33 years old.  I don’t know exactly what kind of shape I’ll be in, but I want to be in better shape than I am now.

Health:

The is no way to tell what 5 years will bring in terms of health, but we eat pretty well most of the time and I’m active pretty much all the time.  I suppose I just have to keep my fingers crossed on this one and do what I can in terms of diet and exercise.

Financial:

Out of debt:

I may keep some of my debt around since I was one of the lucky ones who was able to lock in some school loans at an extremely low percent, but I have some horrible loans at 7-8% that need to go away fast after I can afford to pay them down.

Investing success:

I have always wanted to get into real estate.  If I stick to my $1000 a month goal, I’ll be able to afford a rental property relatively soon.  If things go well, I won’t stop at one and might start building.  

Long Term Goals (2041 Goals – Age 60)

This is too far away for me to anticipate.  I don’t like even thinking about this yet.  I don’t know what to expect, but I have a vague sense of where I could be, and where I don’t want to be.  

Professional:

Nearing retirement:

At this point, I have no idea what to expect.  We may see incredible advances in drugs, medical knowledge, genetic applications, etc.  

Personal:

Marriage and Children:  Hope to be still married and an empty nester at this point.  Maybe a grandpa.  This seems funny to think about since I’m not a father yet.

Health:  I hope to still be here!

Financial:

Ready for retirement:  If we stay around Harrisburg professionally, maybe we’ll retire somewhere out west.

It may be too young to have retirement goals at this point, but at least I am started to plan for it now.  At that point in your life, I think health, family and leisure are most important.

Your goals

What goals do you have?  How do you like to organize them?  Where are your priorities for the next year?