Monthly Archives: September 2019

What To Do

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2019-09-23 08.07.06-1Between summer day camp and the school year starting mid-August, I’ve had two months of a relatively quiet household.

I used this time to re-read Taleb and Munger. You can find my full notes here.

My initial purpose of re-reading was to figure out “what to do.”

It is far easier to be certain about what NOT to do.

Do you know what can ruin your family’s life?

I do.

  • Racing, especially high speed downhill => physical ruin leading to a downward mental spiral.
  • Alcohol use => historically, my average daily consumption is either: (a) zero; or (b) slowly trending upwards.
  • Anger => if I am going to screw up a key relationship then it will be when I act on anger.
  • Death by Accident or Avalanche

What is your list?

Assets and spending do not create a life with meaning.

My true job is keeping our cost of living down so we maintain the ability to control our schedules.

  1. Be wary of adopting the preferences of others. It’s easy to sign yourself up for millions of lifetime spending that won’t mean a thing to you late in life. Worse yet, you will pass these values to your kids and they blow whatever you leave behind.
  2. Pay attention when you notice “better” doesn’t make a difference. “Wasn’t worth it” happens to me a lot.
  3. Pay attention to the cost you pay in time and emotion => it costs me a lot of worry and stress to get more money. Way easier to spend less.
  4. Once you are beholden to a third-party, you’ve lost.
  5. A lot of times “worse isn’t worse.” We adapt very quickly to setbacks.

We discuss case studies at home. Housing, vacations, cars, the endless “needs” my kids and I dream up.

So while I’m removing things that can ruin me, and beating down my hedonistic tendencies… What to do?

Wait for the fat pitch.

A key benefit of a good position is being able to wait until the credit cycle swings in your favor.

The longer we have to wait, the better the opportunities. Cutting rates, running trillion-dollar deficits at the top of the economic cycle… there will be great deals eventually.

I’m not excited about any asset class right now.

  • The bond market is telling me that we’ve pulled 5-10 years of returns forward.
  • Net yields are under 1% for real estate that I’d like to buy.
  • The rest of my balance sheet feels like “enough” exposure.

I’ve decided to make no material new investments. We are going to periodically rebalance and I am going to reduce my cost of living.

What to do?

Enjoy nature with my family and pass my value system to my kids (by living the life I wish for them).

Time and Attention

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Early in my fatherhood journey, I created an effective cover story => the need to generate cash for the family.

My cover story was a socially acceptable justification for being away from my family.

As additional kids arrived, and I watched my wife deal with the day-to-day, it became obvious that my avoidance strategy would not take my life where I wanted it to go.

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I have a quirk => I “see” and “feel” the risk of future regret.

Due to my quirk, I will usually choose the path of least regret, regardless of short-term pain.

My thinking went like this… having been through one divorce, is my avoidance strategy moving my marriage towards where I would like it to go?

And this… you know, my friends tell me that parents have very little impact on their kids, even if that’s true… Do I want to spend the last twenty years of my life wondering if the kids would have had a better outcome with me around?

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Once I re-framed, the choice was obvious.

Time to do a better job at home.

However, at that point, mourning for my past life set in.

It lasted for five years!

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A key parenting principle:

if you show interest in something I enjoy then I will reward you with time and attention

In offering myself to my family, I seek to offer my best self:

  1. We do it their way – their speed – their level of competence.
  2. I don’t teach, coach or instruct. We simply spend time together.
  3. We do the activity one-on-one.

My primary goal is to establish the link between:

  • fun – Dad – camping
  • fun – Dad – skiing
  • fun – Dad – biking
  • fun – Dad – hiking

No agenda with regard to pace, duration and difficulty. No agenda!

Keep the trip short. The pictures in this blog are from an 18-hour mid-week camping trip. As another example, our youngest has precious memories of skiing with me => initially, the skiing took less time than the driving!

Train before the training. The world gets a better version of me if I’ve done a workout first.

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So if you’re feeling bummed, or avoiding life altogether, then get out of the house and start making the association between fun and what you like to do.

As I tell Axel in the backcountry…

It’s self-rescue or sit down and die.

By the way, if you look deeper then you will see the association of “fun” is really between you and your kid.

…or you and your spouse.

A Better Set of Problems

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2019-09-14 07.05.49My favorite place in the United States is Blue Sky Basin.

From Blue Sky, you can look west and see The Mount of the Holy Cross – it’s a humbling view, which reminds me of beauty and personal insignificance.

Mountains are good that way!

2019-09-13 14.44.34When I tell folks about my mini-adventures, they might say “I wish…”

  • I wish my spouse…
  • I wish my kid…
  • I wish my boss…

Pay attention to your spoken wishes, and do.

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Am I willing to do whatever it takes to turn my wish in to reality?

Using my son’s hiking, I have insisted, “I will never…”

  • drive long distances
  • walk slowly
  • carry everything
  • give up “my day”

Going deeper, unlocking the benefits of marriage required me to modify what I thought were my best qualities.

Well, do you want it enough to change?

2019-09-14 07.45.21.jpgSecond, pay attention to the reality that you’re going to feel the same!

Memory is different than experience…

…and my experience often feels like a problem.

My experiences are largely forgotten, replaced with new problems I dream up. Fortunately, I am free not to take myself too seriously.

This insight, requires paying attention and not taking my thoughts too seriously in the moment.

I started by noticing my #1 habit that was clearly making things worse => acting on anger in low-stakes situations.

What is your #1 habit that’s holding you back?

2019-09-14 07.52.57.jpgWith a bit of luck, I have a few hundred Blue Sky laps remaining.

Each time I look over to Holy Cross, I’ll be reminded of a job well done.

Fill the world with reminders of your best self.

Years, Leverage, Time and Ruin

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2019-09-10 07.55.51The benefit of creating a good position is you can choose not to leave it.

Each time I change strategy, I open the door for error.

2019-09-10 06.08.38A quick review, I calculate financial wealth as:

Net Family Assets [divided by] Annual Cost of Living

The formula spits out an answer in years, not dollars.

To figure out if an idea is “worth it,” I convert to years.

I also consider:

  • Leverage: do I have to borrow, what’s the total dollar value of my exposure, how large/far can things move against me?
  • Time: I have control of my schedule – might this idea change my ability to control my schedule?
  • Ruin: reputation, relationships, finances, health… how does this idea change my exposure to ruin?

I have a lot of (bad) ideas. Thankfully, most don’t get through my filters.

These filters work with EVERYTHING… alcohol & drug use, mistresses, felonies, off-balance sheet financing, sleeping late, losing emotional control, binges…

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How can I put “years” into family wealth without increasing my risk of ruin?

In 2009, we executed a four-year plan that put us in a better position.

A key part of that plan was downsizing, borrowing (30-years fixed at 3.25%) and pulling 65% of the equity out of our primary residence.

It was highly inconvenient to change and we expected the smaller place to be a step down. However, our minds adjusted and we love our existing place. The move paid off in “years”:

  • Our current place runs at half the cost of our old house.
  • The capital we withdrew, earns enough to cover the cost of our current place.

I looked at moving again but there wasn’t any benefit to us after taxes, commissions and hassle. So we’re going to wait and watch.

Remember, “doing nothing” maintains an option to (make a better) change later.

2019-09-05 19.33.32The Elephant(s) in The Room

Childcare and school fees have been a fixture of the last six years. It has been a big number – about double what we pay in housing costs.

Our youngest is in Grade One (yay!) and we just lost our favorite sitter (not so yay). The result is a big slice of the family budget gone.

My first thought was to replace help with even more help. I have a habit of throwing money and other people’s time at my problems. It’s a carryover from my days in finance – where I aimed for maximum subcontracting in my personal life.

Then I had a thought…

  • Consolidate the kids’ schedules (we often have three in three different places)
  • Help out in the afternoons (I’ve done nothing for a few years)
  • Take over the cleaning (ditto on my lack of input)

It’s ~20 hours out of my week => prior thoughts on money and time.

The other elephant in the room is my cash flow deficit. It’s been rolling at 4% of assets for years. I’ve ignored it because our assets have been appreciating at a faster rate. My comfort with deficit spending reminds me of 2004-2008.

So I could “buy” the family a shift from a cash flow deficit to a surplus. Worse case, I crack a bit and hire local kids to help me out. I’ll still cut my cash burn by ~80%.

When I explained my plan to my wife she asked if my plan would make me happy. I said,

“I don’t expect to be happier but I noticed that being a better man never made things worse.”

Quenching A Thirst For Adventure

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2019-08-30 19.44.42Being sensible for too long can leave me with a desire to BUST OUT something extreme.

However, there is a substantial hangover if I’m away from home for long.

How to maintain an adventurous spirit without putting a huge strain on our lives?

2019-08-30 18.38.03I’m fortunate to have pals with serious jobs, who do fun things.

I’ve been paying attention to their mini-adventures and planning my own.

  • Excitement => moving through nature in darkness
  • Novelty => route finding in new places
  • Risk => uncertainty, weather
  • Companionship => sharing the trip with my son, or my wife
  • Short duration => back home within 30 hours

Small, frequent doses of shared adventure, while meeting my obligations on the home front.

Do you know your “good enough?”

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