(of course, you can also free-hand with an exacto knife -- be careful!)
Brilliant - you can write on magnetic sheeting using dry-erase markers!
Also, attached is a pdf on how to use a waterjet in general.
Step 1: Acquire Magnetic Vinyl Sheeting
The company that makes it told me that you can laser cut the magnetic sheeting just fine, no problem, it's been done, but to avoid laser cutting any magnetic sheeting covered with vinyl (the shiny colored part, shown here in color "gold", much more sparkly in real life than in this picture), because of the noxious fumes.
Step 2: Find a Steel Sheet
If you don't have steel, anything else heavy and rigid and bigger than your magnetic material will work, but you'll need clamps.
Step 3: Don Safety Gear!
Step 4: Place It on the Waterjet Table
Be sure the waterjet isn't going to crash, if your sheet of metal is bent.
Step 5: Raise the Water Level
Step 6: Create Your Drawing
Export it as an ORD (or appropriate) file.
You want to make any thin sections HUGE. Wider and thicker than you would ordinarily imagine, because under a waterjet, magnetic sheet rips very easily!
Step 7: Enter the Materials Settings
I set the material to .0625" thick, machineability of 1000, and turned on anything that said "low pressure".
Step 8: Waterjet!
Keep the water level high, keep your fingers clear of the jets, your safety goggles on, and try to stay dry!
Step 9: Extract Magnets
Pause, retrieve magnets, and resume machining until done.
Keep your hands free of the jet! Don't put your hands anywhere near the waterjet when it's running.