Can You Afford to Change Your Mind
By Jeremy L. Stanley, EA, CFP®, AIF®
Before making a major financial decision, consider what it would take to reverse that decision if life changes.
Many CRNAs spend years building their careers, increasing their income, and accumulating wealth. Eventually, many reach a point where they can afford things they once only dreamed about: a vacation home, investment property, business ownership, or an early retirement.
But just because you can afford something doesn't mean it's the right financial decision.
Before making a major financial commitment, ask yourself one simple question:
If this turns out to be the wrong decision, how difficult and expensive would it be to change my mind?
I call this The Financial Reversibility Test.
Why Reversibility Matters for CRNAs
For many CRNAs, income depends heavily on clinical work. Long cases, call schedules, and the physical demands of the job add up over a career.
An injury, a stretch of burnout, or a change in your group's contract can force a career decision on short notice. When your income depends on your ability to keep showing up in the OR, the freedom to adjust may be one of your most valuable assets.
Not All Financial Decisions Are Equal
Consider a hypothetical example of two CRNAs, both age 55, each earning $350,000 annually with $3 million in investments. Both love spending time at the beach.
One purchases a $1 million vacation home. The other decides to rent a vacation property whenever the family wants to get away.
Income and investment balances alone do not establish whether either choice is affordable. That depends on spending, debt, taxes, retirement needs, and how the purchase would be funded. The two choices also create different ongoing commitments.
The homeowner now has property taxes, insurance, maintenance, and potentially mortgage payments. These costs vary by property, location, and financing. A later sale may involve brokerage commissions, closing costs, and applicable taxes. The timing and sale price depend on market conditions.
If the buyer used $1 million of the $3 million investment portfolio to purchase the home outright, one-third of that original portfolio would be shifted into a single property before transaction costs and taxes. Accessing that money again would depend on selling or borrowing against the property.
The owner may value a place to return to and the possibility of appreciation, although the property could lose value. The renter can choose a different destination on a future trip, subject to rental costs, availability, and any existing cancellation obligations.
Either choice may fit a particular household. Renting generally creates fewer continuing commitments once the rental ends, but it does not provide ownership or participation in any increase in the property's value.
The same principle applies to other financial decisions CRNAs may encounter:
Purchasing a business or investing in private equity, where your money may be tied up for years.
Buying an annuity with surrender charges, which can make an early exit expensive.
Deferred compensation elections. Distribution timing and opportunities to change an election depend on the plan and applicable tax rules. Review the deadlines and restrictions for non-governmental 457(b) and other nonqualified deferred compensation plans before choosing.
Pension elections. A choice between a lump sum and lifetime payments may become irrevocable once benefits begin. Confirm your plan's rules and how the choice affects survivor benefits.
Group buy-ins or partnership tracks, which can be costly to unwind if the practice or your plans change.
Employment contracts. Non-compete clauses, tail coverage obligations, and sign-on bonus repayment provisions can affect the cost of leaving a role. Their effect and enforceability depend on the contract and applicable law; obtain legal advice before signing.
Roth IRA conversions. Under current federal law, a completed conversion from a traditional IRA to a Roth IRA cannot be undone through recharacterization. Review the potential tax cost before converting.
Wealth Should Create Choices
Early in a CRNA's career, financial planning is largely about accumulation: saving, investing, and working toward financial independence.
As wealth grows, priorities may evolve.
A CRNA early in a career may emphasize long-term growth while balancing debt, cash reserves, and investment risk. A CRNA approaching retirement may place greater weight on liquidity and the ability to reduce clinical hours. Age and assets alone do not determine the right approach; goals, obligations, and risk tolerance matter at every stage.
That's why I believe the closer you get to financial independence, the more carefully you should evaluate decisions that are difficult to reverse.
Before making a major commitment, consider three questions:
How much will it cost to get out? Consider transaction costs, taxes, penalties, and potential losses.
How long will it take to get out? Some investments can usually be sold promptly, although market conditions and settlement timing matter. Others may tie up your money for years.
What opportunities am I giving up? Will this commitment limit my ability to change jobs, reduce clinical hours, retire, or help family members?
Making a Decision More Reversible
The test isn't meant to talk you out of the beach house. Often the better question is how to pursue what you want while keeping a door open:
Try before you buy. Rent in the area for a season or two before committing to a purchase.
Start smaller. Consider a smaller property or a phased commitment where practical. A partial ownership stake can require less capital but may introduce transfer restrictions or disagreements among owners.
Keep a liquidity reserve. Accessible savings outside the commitment may reduce the risk of a forced sale. Set the amount around your expenses and obligations, recognizing that cash can lose purchasing power to inflation and a reserve cannot cover every contingency.
Review your exit up front. Before signing, discuss buyout terms, contract termination provisions, and responsibility for tail coverage with qualified legal and insurance professionals. Negotiate changes where possible.
When Irreversible Is the Right Call
Some irreversible decisions are worth making. A long-term commitment may support a personal goal or provide a benefit you value. Weigh that benefit against its cost, risks, and limits on future choices.
The Financial Reversibility Test is a filter, not a veto. The goal isn't to avoid every commitment. It's to make irreversible decisions deliberately, with a clear view of what you're giving up, rather than by default.
The Real Purpose of Financial Independence
Financial independence isn't simply having enough money to stop working.
It's having enough financial flexibility to make decisions based on what matters most to you, rather than what your financial obligations require.
Sometimes the best financial decision isn't the one with the highest projected return or the most impressive asset attached to it.
Sometimes it's the one that preserves your freedom to make a different choice tomorrow.
The next time you're considering a major financial decision, don't just ask, "Can I afford this?"
Ask, "Can I afford to change my mind?"
Because ultimately, wealth should expand your choices, not gradually take them away.
If you're weighing a major financial decision and would like a second set of eyes, we'd be glad to help you run it through the Financial Reversibility Test before you commit.
Investment advice offered through Private Advisor Group,
a registered investment advisor.