Problem Child

2014-12-21 17.38.03There are three phrases that I pay attention to when they enter my mind..

  • If only…
  • I wish…
  • …not like me

All three are used when I’m trying to get the world¬†to fit into a preconceived notion of what I deserve.

That notion is “more like me.”



A story!

I was watching¬†my daughter’s Christmas¬†recital and thinking 40 years (!)¬†back to my preschool¬†recital.

I was remembering sitting in my grandmother’s car after I had RUINED the recital by¬†singing out of tune.

Smiling inwards at the child I was… a¬†parent¬†leans over to my wife and says, “I can’t figure him out, he’s nothing like me.”


Later, I say to my wife,

There’s nothing wrong with that kid.¬†

Imagine living in a house where everyone thinks that there is something wrong with you and you can’t understand what you’re doing, or why you’re doing it.

Thankfully, that wasn’t my childhood. However, it is the living situation of many kids that are seen as “problems.”

It’s also how I’ve spent most my adult life – clueless on the sources of my effect on other people.

Whether we are talking about kids, or other people, we do everyone a favor if we remember that nothing is being done to us. Most the time, we’re observing a temporary situation that will work itself out.

Christmas vacation can be tough – remember that they will be back at school, grown up and in charge of us (!) soon enough.

Kids and School

christmas_2014I was at a Hanukkah party and the hostess asked me how my daughter was doing at school.

My off-the-cuff answer made a lot of sense…

She’s having fun and is motivated to learn. So I’ve decided to let it roll¬†for a few years and see how she sorts herself out.

Strictly speaking, that’s not 100% accurate.

We’ve hired a tutor to help her for a couple hours on Saturdays and, despite her objections, she learns¬†Spanish twice a week after school.

However, I¬†can’t muster¬†much enthusiasm for worrying about the details.

I don’t believe they matter.


After a particularly tough Saturday morning, I was walking around in the forest, trying unsuccessfully to settle myself down.

When highly agitated, I deepen/slow my breathing and consider the big picture.

If my role isn’t to worry then what is it?

What lies at the root of parenting failure?

What actions clearly make things worse?

Abandonment and retaliation

It struck me that the opposite of these actions – resilience and persistence – make excellent partners with my daughter’s core traits¬†(joy and motivation).

So rather than putting pressure on her to worry about the details. I should put pressure on myself to demonstrate resilience and persistence. These are the two traits that my mother-in-law personifies and her daughter turned out fantastic.

Drive insight inwards.

Be the brand.

The Money Value of Time – Personal Pricing – What Am I Worth

This is a useful calculation for time management.

Print this page out, write your answers beside mine, don’t think too much!

Annually, I make the calculation at the level of Business, Family, Household and myself.

Today, I share the calculations for my consulting business.

Start with time:

  • How many weeks a year do you want to work?
  • How many days a week?
  • How many hours per day?

Weeks * Days * Hours = Billable Hours

That’s the time that you have in a year to generate revenue.

What should you charge per billable hour?

Desired Net Income + Overheads = Gross Revenue Req’d

Gross Revenue Required / Billable Hours = Rate Per Hour

A case study from my 40s to illustrate:

Screenshot 2014-12-16 09.13.06

The first column was my 2009 goal for my athletic consulting business.

  • Generate $5,000 per month net cash contribution to my family
  • One week per quarter spent training alongside the team
  • Four hours of focused work per day
  • One day off per week

The second column was reality, and it was a good life.

  • Work every day
  • Discover I can only be productive for three hours per day
  • Take two weeks off and return to 1,500 email messages – realize that I can’t “bill” for my email inefficiencies!

The third column is a goal for my 50th birthday.

My goal either seems small, or large, depending on where you’re at.

It helps that I work for people that “bill” at large multiples of my target.

  1. Understand: Your average billing rate is your new minimum
  2. Vow: I will stop doing low-value work
  3. Consider: Where can I deliver 2x my billing target in value added

Can I be 3x more efficient than a $35 per hour coach? Yes. The two-year transition was painful but I got there.

However… when I arrived at the middle column, I needed to make a decision moving left (for a little more time) or moving right (for way more time).

Increasing my value added per hour requires more than simply guiding exercise. Shifting towards far greater value added makes sense.

How much of your time is spent on what brings satisfaction to your life?

The table below came from a recent coaching clinic – I asked the coaches why they coached.


In business, family, love and parenthood…

What’s your why?

Share experiences with the people that love me.

Early Retirement – The ratio of spending to security

thanksJustin put me onto Mr Money Mustache’s blog (“MMM”). MMM¬†makes a¬†point that if you have a balance sheet that equals 25x your annual spending then you should be¬†set for life.

What prevents us from getting to the magic ratio?

At my best, I see debt and spending as where to focus.

When I’m feeling sorry for myself, I might blame taxes, lack of income or the cruelty of fate.

Like Mr. MM, I retired early. In fact, I’ve had three retirements – two voluntary and one via the insolvency of my de facto employer.

When I was living first class in my late 20s, I realized that I could slash my spending by 90% and take a year long vacation. This change didn’t get me to the magical 25x ratio¬†but it got me close. I worked part-time (as a coach) and knew that I could tighten¬†my spending and get myself to 40x covered.

Somewhere around 2002, I got caught up in the bull market that ran through to 2008. My spending¬†rose, and rose, and rose, and rose. I didn’t mind as I was making good money. If you’re in a high-paying profession then you’re prone to this risk. I’m not unique. Docs, dentists, lawyers and finance professions often extend their careers by 10-25 years by cranking expenditure and borrowing.

My life came to a head in 2008 when the economy went off a cliff, my income dropped 95% and I had grown accustomed to my spending.

Boy did it hurt to stop spending money.

It hurt because I didn’t see the link between spending and the anxiety that filled my life.

Inside my head, the battle raged…


What I was really saying is, “it hurts so much to change. I just want to be happy, please leave me alone.”

I see plenty of conflict in relationships over money. Historically, much¬†of my irritation over clutter stems from an underlying financial anxiety that I’m not addressing via my own habits.

Quite often the main breadwinner delegates the financial planning function, putting their spouse on an allowance and creating a external target for internal angst.

A couple years ago, I realized that I’d done this to my wife. I had to own my fears, change my spending and redirect our family.


I had the courage to take my first retirement at 31 because I remembered the freedom that came from living like a student.

I forgot that lesson, increased my net worth by 500%, and felt completely insecure at 40.

Every $10,000 of expenditure requires $250,000 of assets to buy me financial peace of mind.

What’s the true cost of your spending?

What could you achieve if you removed unnecessary anxiety from your life?


I have buddies that are planning¬†to work an extra decade – to build assets sufficient to¬†support a spending rate that doesn’t bring happiness and strains their home life. They tell me stories of their children begging them to work less.

The pain is real.

So are the benefits from incremental change.

The Season of Giving

3_kidsI’ve been reviewing next year’s family budget.¬†There are four categories where I have a lot of discretion: donations, date nights, couple retreats and vacations.

Donations/Gifting: Halfway through year, it was looking like I would have to borrow to maintain my preferred gifting rate. I hate borrowing so I cut the budget in half.

Late in the year, we sold our house and I was able to hit our original goal.

It wasn’t until I played The Dollar Game¬†that I started to understand the physiological and psychological benefits of being open to other people.

I like having¬†a formal budget. I never have to consider if I can “afford” to be open to another person. I know that I can always help someone, at least a little bit. As well, when I feel that I’ve been ripped off, I tell myself that the money came out of my gifting allocation and I move on.

Vacations: For a long time, I’ve wanted to ride my bike to the top of Haleakala in Maui. At an elevation of 10,023 feet, the volcano is a biggie.

So I added a Maui vacation to my 2015 budget.

When I ran the numbers for airfare, childcare, condo rental… climbing the volcano was going to cost me close to $1 per vertical foot.

My Colorado price per vertical foot is a penny!

If my goal is satisfaction and¬†a life with meaning… is the Maui¬†trip the best use of the money?

Does short-term luxury lead to satisfaction across a year? Maybe if I take a lot of pictures!

I made a list of alternatives…

  • Get 2,000 $5 notes and play a massive¬†$5¬†version of The Dollar Game¬†– gets rid of my worry that a dollar isn’t enough to help – that’s a big stack of cash
  • Sponsor 100 people for The Dollar Game – I ruled that one out because¬†the effect¬†doesn’t seem to work with someone else’s money
  • Build 15 homes in the developing world
  • Overtip all year – feel like a big shot – own the fact¬†that my desire to climb the volcano is the ego-picture¬†from the summit
  • Sponsor a teaching assistant for my daughter’s kindergarten class so the little people learn more quickly – guaranteed kudos
  • Buy 30 iPads for the school – additional¬†kudos, perhaps more¬†if done anonymously, to appear humble
  • Increase my giving budget – open my heart more often, to more people

Once you start frequent, small gifts – it turns out that the person that you’re helping the most is yourself.

I don’t regret my inefficiencies. I’m sure that I’d love the trip to Maui.

Luxury spending doesn’t have the staying power of an open heart.


My original article on The Dollar Game and a follow up one year later on giving.

More on Couples Retreats and my marriage – Article 1 and Article 2

Behavior Not Protocol

winterIn any given field, the bulk of our performance comes from choosing appropriate behaviors rather than optimizing protocol.

Take wealth,¬†I’ve been reading a second book by Nick Murray and he makes the point that behavior is the single greatest source of wealth creation. He goes further to make the point that it has a greater impact than all other factors combined.

In reading the book, it struck me that he could easily have been describing athletic performance.

  • Balanced program
  • Frequent small contributions towards the goal
  • Most¬†people beat themselves
  • Train yourself to overcome human¬†bias¬†and misjudgment

For every wealth behavior, I can find a similar fitness behavior. Works the same with common errors (selling in fear, chasing performance, not resting, fear of fatigue).

Looking forward to 2015, what behavior is required to achieve your goals? Don’t focus on more than three.

What are the most common mistakes that “everyone else” makes in seeking similar goals? Individual experience is a mirage. What are the most common errors made in my field? How best to create a system so I avoid repeating the mistakes?

Regardless of your field…

  • One small daily step – keep chipping away
  • Drive experience inwardstake all external irritations and¬†change them¬†in MYSELF
  • Let go of¬†non-core – our best work requires a clear mind, a clear mind comes from letting go
  • Refuse to make predictions – pundits do worse than random – stay focused on behavior
  • Spend no more than 10% of your time on tweaking protocol – the greatest¬†returns flow from¬†consistent core behaviors

What are the behaviors required for a life with meaning?

Health, kindness, shared experience, close to nature.

Quarterly Financial Review

2014-11-19 13.36.43-1The way you feel right now is how a bull market impacts consumer sentiment.

  • Gas prices are down – a big¬†psychological boost for me
  • Asset prices are at all-time highs – makes me feel safe
  • Your business is performing well – makes me feel safe

In these conditions, it’s tempting to change investment strategy and chase recent high performing assets (or managers).

We’ve decided to stay-the-course. There’s hasn’t been any major change in our life situation so there need not be any change in our investment strategy.

We’re¬†on track to achieve our goals:

  • The freedom to chose rewarding part-time work
  • A¬†source of income that we don’t outlive
  • Educating our kids
  • Passing capital to our adult kids when it’s time for us to say good-bye

Do you know your goals?

Do you know the behaviors that can screw up achieving your goals?


We sold our old house in September and I implemented our strategy of gradually buying equities. We’re 34% equities so there’s been “lost profits” from having money outside of the equity market¬†– especially when the US market hits all-time-high after all-time-high…

Surprisingly… lost profits don’t¬†bother me, or screw up our goals, and I was relieved in October when the portfolio held up well.

Dollar-based equities have continued to outperform our international investments so I’ll rebalance by tilting new¬†purchases towards¬†international. Yes, I’m going to buy more of what everyone is saying will tank in 2015 (VTIAX). I have a strategy¬†of reinvesting dividends and keeping International equity at 50% of my US equity exposure.

It’s likely that I’ll need cash flow to cover year end expenses. I will sell bond funds to raise the cash. That will bump up our equity allocation¬†as a percentage of assets.

The underperformance of our international equities creates the possibility of tax-loss harvesting in December. Next week, I am preparing draft accounts for the different parts of my family and reviewing the cost basis of our investments. Later this month, we will decide if it makes sense to realize losses.


We spend $12,000 per annum at Whole Foods and they are offering a 10% rebate on gift card purchases through Jan 1. They let us pay with a credit card which gives another 1% via cash back. That is an 11% return on investment, on money we are certain to spend.

We eat at Native Cafe and they have an even better offer of a 20% rebate on gift card purchases. There’s only one location in Boulder and the company financials aren’t are strong as Whole Foods. I’ll limit myself to five¬†months worth of meals.

Even better than shopping at Whole Foods, or eating out, is staying at home and using goods purchased at CostCo. We spend $10,000 a year at CostCo and it saves us thousands of dollars.

If you don’t know what, where and when you spend then is an easy way to track your family finances.


A Necessary Failure

2014-11-22 21.05.51-1When I listen to parents talk about their experiences, I hear…

  • I’m worried that I’m screwing it¬†up
  • We’re barely afloat
  • I’m just trying to keep my head above water

The metaphors often have a drowning theme to them!


Something that’s helped me cope with being overwhelmed is to notice¬†that the parenting¬†experience has been set up so little¬†failures are guaranteed.

In fact, there’s no better life lesson to learn than people¬†can fail us¬†and we are¬†going to be ok.

We might not like the failure.

The failure might hurt.

…but we’re going to be OK.


So remember that being good-enough is better for our kids than being perfect.

…and remember that our parents, and others, probably did us¬†a favor when they let our¬†younger selves¬†down.


More along these lines in a book by Mark Epstein called The Trauma of Everyday Life.