Between summer day camp and the school year starting mid-August, I’ve had two months of a relatively quiet household.
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?
- 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.
- 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.
- Pay attention when you notice “better” doesn’t make a difference. “Wasn’t worth it” happens to me a lot.
- 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.
- Once you are beholden to a third-party, you’ve lost.
- 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).