COVID Finances

Local fires make for dramatic sunsets. This was last night at swim drop.

What strikes me most about COVID is how little we’ve been asked to do.

For those of us who avoided unemployment:

  • Stay at home
  • Wear a mask
  • Spend a lot of time with our children

I embraced all three, eventually.

Seven months in, our youngest can run her home school:

  • Print daily schedule
  • Follow links to online classes
  • Turn in her work
  • Make lunch and snacks

It’s not ideal but it’s good enough given the underlying reality.

An interesting part of the underlying reality is how well the top of tier of our society has been doing.

The noise of the election has been drowning out this story.


2 out of 3 kids returned to in-person learning on Tuesday and I hit the road for a day trip to the Collegiate Peaks. COVID has enabled me to feel grateful for things that appeared unreasonable at the start of 2020.

I made three financial decisions this year.

  • Sale & leaseback of my house (January)
  • Roll two years cash flow from bonds to equities (March 18-24)
  • Ski local, reallocate ski money into a new car (Q4)

Similar to 2009-2012, I expected to do a lot more.

However, I’ve done enough. Enough to set up the next decade and enable me to focus on what matters.

That’s a lesson.

If you’re focused on “what matters” then there’s not going to be many decisions to make. Most of your focus is going to be on the day to day (exercise, family, admin, relationships, marriage).

If, like me, you are someone who likes getting stuff completed then you’ll do well to create an outlet (other than churning your portfolio) for this aspect of your personality. Otherwise, you’re going to run up a lot of expenses, pay excessive fees/taxes and greatly increase your chance for unforced errors.

In your larger life, if you don’t give yourself something useful to do then politics, social media and petty pursuits will fill your time.

I need to watch out for these distractions => they bring out of the worst aspects of my personality.

Pay attention to who, and what, brings out your best.


The best investment I made this year was the month I spent weaning myself off social media.

It’s difficult to see the net negative return of Facebook/Instagram until you are outside of their feedback loops.

At its core, Facebook makes it easier for bullshit to reach me.

For others, Facebook makes it easy to argue.

For all of us, the algorithms reinforce confirmation bias and reduce our ability to think clearly.

The algorithms are everywhere – they live in every web interaction we have.

Instagram stimulated my desire to buy stuff and reduced my satisfaction with who I am.

Both platforms are pleasurable but what’s the source of the pleasure? The source is external validation on appearances.

Far more powerful is an internal validation for the actions I take, daily, for myself and my family.

True power is the capacity to create a feeling of goodness for the actions you take, daily, in your own life.


My biggest fan

What was your biggest problem of 1, 5 and 10 years ago?

Can you even remember?

I can.

The biggest challenge of my last decade was a little girl who doesn’t exist anymore.

She’s gone and has been replaced by someone who’s an absolute star.

The difficulties of COVID enabled her, and me, to shine.

Parents, children, teachers, students, superiors, subordinates…

What we see, as a problem, will disappear over time.

…and time is the most valuable asset in our portfolios.

Spend it wisely.

Sixty-Week Grind

I think the cat-pumpkin is my favorite

The days are shortening, our state’s COVID metrics have gone negative and our youngest’s class had a positive last week.

How am I going to find the win this winter?

The first thing I did was start a gratitude list.

Gratitude and engagement are useful antidotes to anxiety and grief. When I started to think about gratitude, there was a lot of positive stuff happening this year. In the day-to-day of home school, I’d forgotten the good stuff. I’ve written it down and kept writing.

Next up, I returned to the beginning.

When COVID started I had two goals: maintain my standards and don’t complain. No reason to abandon those. Useful filters.

Then I had a look around. How’s the vaccine timeline going?


“February or March” => hmmm, I should probably count on intermittent Home School, and COVID constraints, through the end of May.


Next spring is way too far out, even for a planner like me.

I decided to keep “base training” through the winter => sixty weeks of base training will completely transform my body.

Have you been paying attention to your wins?

What does better look like?

  • Weeks where I spend a day in the wilderness are better
  • Mornings where I wake up early, and train, are better
  • Hiking with my wife is better
  • The way I feel after I clean the house is better
  • The way I feel after I declutter is better
  • Setting a new PB in my home gym is better

“Better” requires me to break my inertia and take action.

Sometimes, getting to better requires me to endure actions that might not be fun.

  • 2-7 hour drives
  • Cleaning toilets
  • Touching every single item in a room => keep or ditch
  • Getting up out of my chair => the constant temptation to parent from another room
  • 60-minute muscular endurance grinds => working through the despair of Minute 37

If I want later to be better then I need to deal with these realities.

Pay attention to better and keep grinding.


Take any hike and make it completely bad-ass by starting an hour before dawn and running green on the headlamps. “Kids, let me know if you see any eyes in the trees…” 😮

What’s Your Filter

Our youngest told me our cat needs a Halloween costume. I laughed while realizing that my home-school internet monitoring system might need improvement.

Most of us will be “adulting” for 50+ years.

Half a century is more than enough time for choice to impact outcome.

Here’s how I stack the deck.


Understanding three things greatly simplifies decision making:

  • Payoff function
  • Worst-case scenario
  • Who bears the worst-case scenario

In most cases, knowing the above eliminates the need to make any prediction (of an unknowable future).

In investing, you can bet big when someone else bears your downside (non-recourse leverage, other people’s money). At home, you will want to be more careful.

You are going to be tempted to spend most of your time predicting an unknowable future.

Don’t.

Instead, figure out the payoff function, what’s the worst that can happen and who bears that downside.


Previous writing touched on the payoff functions for fame, financial wealth, strength training and personal freedom.

Tim’s blog did a great job of laying out on his worst-case scenario – shot in his own home as well as a brain dump of everything that can go wrong, and right, with fame. It was an enjoyable read but life is too complex to perform cost-benefit analysis for every choice.

Sounds good, doesn’t scale.

One of my favorite shortcuts is to teach myself the areas of my life where I have a lousy track record, and defer to my expert advisor(s). I look for advisors with domain-specific experience and a temperament different from my own then… …I do what they recommend.

There’s deep wisdom in stepping outside ourselves => What Would Jesus Do, or Buffett, or your coach, or whomever you think knows better than you.


Each time I choose, I open the opportunity to make a mistake. To reduce unforced errors, there are filters I use to eliminate the need to make a choice and to make the correct choice obvious.

First level filter => repeat my choice for a decade, where’s this likely to take me?

What’s the worst that can happen? Live long enough and you’ll see it happen.

Specifically, I want to stay well away from:

  • Prison
  • Permanent Disability
  • Bankruptcy
  • Divorce
  • Violence
  • Self Harm

The first three are obvious, but that doesn’t stop many, many people from surfing close to the edge, or getting an emotional rush from having charismatic risk-seeking friends.

Sometimes I need to phase out a relationship, sometimes I need to adjust my own behaviors.

With marriage, specifically, it’s impossible to “see” just how challenging your life will become if you have kids. You’re going to be really, really stressed out for a decade. Every single one of my prior bad habits tried to make a re-appearance in my life!

There’s no easy way around it but you can significantly reduce your chance of disaster if you pay attention to how your potential mate approaches risk.

Personally, I like to drive with people. You can learn a lot about someone by chatting, and watching, while they drive in traffic.

It is difficult to let charismatic sociopaths out of our lives. These people are a lot of fun to hang around with, especially when we aren’t the target of their ire. It gets easier with a few bad experiences.

When you need to make a change, resist the urge to justify your choices.

Learn to ghost with grace.


What if we are the person that needs to change?

Owning my choices and considering where they might take me.

Mountaineering, peer choice, alcohol use, cigars, bike racing… as my life changed from “just myself” to “my young family” the following became clear to me…

The people who were bearing the downside had no choice in whether to take the risk.

To make myself feel better, I took out a long-term care policy. The insurance reduced the financial burden if I was disabled but didn’t address the mismatch between who was taking the risk and who was bearing the downside.

In my 40s, severe permanent disability could have been worse than death. In 2013, with three young kids and an impaired balance sheet, I was in a very different place than I hope to be when our youngest graduates high school (in 2030, or so).

Perhaps I’ll add back risky stuff in my 60s… right now, I doubt I’ll have the energy.

🙂


Divorce, violence and self-harm => the bottom half of the list.

  • Nobody gets married hoping for a divorce.
  • Nobody starts a drive hoping to get their car shot up in a road rage incident.
  • Nobody repeats a pattern of justified rage hoping to create a crisis.

But these things happen, and their seeds are small choices, repeated.

I try to be alert to habits that can lead me astray.

Anger remains a challenge for me.

I pay attention to situations and habits that reduce my faults.

I focus on better.


My definition of winning has changed over time. However you define it, success is more likely with a plan, a couple well chosen peers and a habit of referring to a clear filter.

Making a habit of the first-level filter, tosses all kinds of stuff into the forget-about-it pile.

Reminder about the 1st Filter => repeat for a decade, where am I likely to be?

The first filter very quickly gets rid of (most of my) bad ideas.

Then what.

Here’s how I set priorities and shape my “to do” pile.

When I was an elite athlete, every decision I made was passed through a filter of, “Will this help me win in August?” At that time, the filter worked very, very well.


August 2007, with my real 1st Place Trophy. Before kids, we took ~1,000 days for ourselves. Highly recommended!

In 2005, I married and quickly realized my filter (of winning) would, if applied over many years, make a second divorce more likely. Deeply seared from my divorce, I really, really, really didn’t want another divorce.

I wanted a different result so I needed a different approach.

I needed to change my filter to…

“How will this impact my marriage?”

Your situation is likely different, but your need to know, and direct, your filter is the same.

Baby, or COVID, arrives… “How will this impact my family?”

Allocating time week-after-week… “What’s my real priority?”

Trivial irritations, the opinions of strangers… “Who gets my emotional energy?”

Every single person we meet has a filter => victory, vanity, external wealth, fame, likes, validation, please the person in front of me, attention, minimize conflict, how do I feel right now, what is the last piece of advice I heard… lots of people, lots of different filters.

Make a choice.

Iterate towards better.

Marriage Money

The progression: Magna Tiles, Legos then Erector Set. So far, Magna Tiles were the best money spent. The kids love them after many years. I’m told Meccano is a new level of complexity. He’s loving the challenge. I bought the Meccano as a consistency prize for daily Spanish Duolingo.

It’s tempting to think that more money will result in less financial conflicts. However, I haven’t found that to be the case.

The habits that lead to conflict follow us up, and down, the socioeconomic ladder.

Similarly, if I can make a habit of de-escalation in one area of my life then my approach will follow me into other areas.


Earlier this year, my wife had her eye on a very nice jacket. For some reason, I became obsessed with the cost of this jacket.

Where did my feelings come from? I have no idea but I knew my feelings were unproductive. I knew because of the filter I apply to my marriage, “Where are these choices likely to take me, and my marriage?”

I knew it would be helpful to move on but I wasn’t able to shake my opinions.

So I funded the jacket.

Actually, I funded 7x the cost of the jacket.

That jacket was a massive write-off…

😉

I placed the money into an account that is invisible to my internet banking.

I asked my wife to pay cash so I would have no ability to track her spending.

I felt better immediately.

It was one of the best deals I did pre-COVID.


I’ve been running my financials since I was 16 and managed to save 50 cents of every dollar I earned from 16 to 40 years old.

My first job out of college was in finance. My mentors made two observations about spending that stuck with me:

  • From the Managing Partner, “We could keep a better eye on the small stuff but that would make this place a lot less fun to work at and it wouldn’t make any difference to my financial life.”
  • From a Young Up-and-comer, “If you ever want to get someone then start by auditing their expenses.”

Apply these to myself

=> make sure my choices can survive an audit (by anyone, but especially my spouse)

=> being a stickler for fine detail will make the people around you miserable (especially if you have a life that can’t survive an audit)

As a leader, what does that actually mean?

In 2009, unexpected unemployment left us facing a financial crisis. I started by cutting my personal budget by 80%. I laid that out to my wife and said we needed to cut our family budget by 50%.

We made a budget, we implemented the changes and we went on with our lives.

Good enough was good enough.


Endless optimization makes everyone miserable.

Often there is a fear-based motivator that is driving our attention to fine-detail.

It can be near impossible to transcend fear-based habits!

Two things that might help:

1/ Set a “give a hoot” threshold.

Each year, I set a dollar-amount that is my “give a hoot” threshold. If something is below that threshold then I promise myself that I_will_not_give_a_hoot.

My total spend in the “give a hoot” category is ~2% of my total budget. The 2% spend cuts 90% of my external annoyances and gives me a lot of internal credibility when I say “we don’t have the money for that.”

Not getting wrapped up in the little stuff makes my internal life better and gives me the authority to direct the big stuff.

This policy is a bargain (but letting go is oh-so-tough).

2/ What about when the threshold is triggered?

When something big pops up, I like to pause and distance myself from the decision.

I’ve set my financial life up to create friction in my ability to spend money. The friction gives me time to ask…

What’s the goal? => How does this choice benefit my family, my marriage, myself…

If it won’t make a difference then wait.


Another filter => Am I willing to spend this money on someone other than myself? If not then wait, again.

Investing and spending => I do a lot of waiting and that’s OK because anticipation is often better than reality.

I spent yesterday afternoon at a car dealership and traded my car for a newer model. The new car will be “my wife’s” and I’m going to roll in the oldest car we own.

Knowing that my family is seeing me roll in the “old car” will make me at least as happy as a new car, which I can always get later.

Here’s why…

Your spouse, your kids, your unborn descendants… all will be impacted by the choices you make with regard to spending and investment.

Financial values scale across generations.

Chose wisely.

Am I Sure?

Fun workout this morning, climb far above Boulder, turn out my headlamp and chill. Venus to the East, Mars to the West and twinkling lights below. ~2,500 feet of predawn vertical and I was home in time to make pancakes.

I happen to live in a city that’s so blue it’s indigo.

Each time we have an election, I tend to “lose” on most the ballot measures I support. I put “lose” in quotations because we’re fine either way.

We’re fine because I spent my life making it difficult for any government to have an impact on me. From an early age, I tracked “total taxes as a percentage of net worth” and worked it downwards.

They could conscript my kids (for an unjust war of choice), they could irritate (or inspire) my fellow citizens into armed rebellion or I could get shot up in the random shootings that are part of our culture.

Scoring the current administration, they’ve done a good job on 1, lousy on 2 and the same as all prior regimes on 3.

Most everything else is noise.


Have you noticed that our President is still alive?

He’s not only alive, he’s doing campaign events. Now, for all I know, he’s been shot up with horse steroids. Still, he’s still out there.

His survival, the survival of an overweight 74-year old with a fondness for fast food, is an interesting data point – if we can get past our personal biases to see it.

His recovery reminded of the importance of “will” in getting things done.

He didn’t have to take the stairs when he returned from Walter Reed.


Another data point, one that I posted over the weekend, is 1,000+ of my neighbors caught COVID in September and our hospital admissions barely budged.

The chart below is Boulder County hospitalizations April to now.


https://www.bouldercounty.org/families/disease/covid-19/covid-19-illness-and-recovery/

There’s some uptick but not what I would have predicted given the confirmed positives in our community.

We had a lot of September positives.

The chart below is August to now.



For me, this shows the benefit of living in a healthy community, having fellow citizens who protect the most vulnerable and our imperfect mitigation measures.

The larger lesson is a clear case study for the danger of applying global averages to niche samples.

Seven months ago, I took actions based on the projections of smart, qualified people. Our current reality is far from those predictions.

Data, no opinion required.


It is near impossible for anyone to see, consider and modify an opinion based on information that doesn’t fit with prior held beliefs.

Don’t spend any energy trying to convince others => rather, build systems to help yourself think better.

Here’s mine…

I try to make mental notes when I’m surprised.

It is far easier to notice a surprise than to change my mind.

The President being ambulatory and our hospitals being empty of COVID patients was very surprising.

What do my surprises say to me?

Don’t be sure.

Keep watching, iterate towards better.

Back To School

Mt Yale, Collegiate Peaks Wilderness – it’s snowing up high as I write this so we could be done with the high peaks for 2020. Huge year for hiking. We took the COVID-lemon and made lemonade, weekly.

Our kids are heading back on October 20th.

The return to in-person learning will have a different impact on our community than the college kids.

I’ll illustrate with a little math…

me => my household => my close circle => my circle’s cohorts => ????

1 => 5 => 15 => 300 => ????

Within my household (5), we have two families that we have a lot of contact with.

These families have three kids each (3×5).

The kids are in different classes, one family has a surgeon and the other an international IP lawyer. So, when we open the schools back up, my three-step network is going to increase => say 30 to 300.

Four-step network? I have no idea => 5,000? It’s invisible to me.

Against the network jump, there are mitigating factors:

  • A hyper-vigilant, vocal minority => we have an active citizenry and teachers who want to stay healthy
  • Masks => decent usage in business and educational settings => our state remains under a masking order
  • Free, easily available testing
  • Existing action template from shutting down the College Outbreak => I’ll post the chart below => the bottom fell out => on the way down, testing went up and positivity fell => I never would have predicted that outcome

We’ve gone from being scared to open our mail (March) to the start of therapeutics coming online (October).


I feel like we dodged a bullet in September. This Atlantic article might explain why, perhaps kids and young adults make lousy spreaders (even at birthday and frat parties).

Collectively, the best way to keep the schools open is opting-out of group activities.

The highest value opt-outs are gatherings with the Three Cs (Close Crowds in Closed Spaces).

We’re going to opt-out of low-benefit connection and stay well away from CCC-connections.

Keep grinding.


Summit sushi for my wingman.

Grief


There’s been a lot of death and dying around me lately. I thought I’d share some ideas that you might find useful if you find yourself in a similar position.


First up, for me, grief is better than depression or chronic pain.

Depression is like carrying around a void. The void is always there then, one day, it’s gone. There’s a lot I can do to prevent a downward spiral (into the void) and I’ve gotten better and better at self-management.

Pain: I’ve been fortunate that my longest block of chronic pain was 14 days. It was like carrying a small fire. Over a decade later, I feel gratitude remembering the moment I noticed the pain was gone.


With grief, there is space between the (trembling) waves that arrive, at unpredictable times. I pay attention to the space, it feels great.

At hospice training, they encouraged us to mourn the small losses to prepare ourselves for the inevitable larger ones.

The practice of leaning into small losses will serve you well.


Did you notice the mental setup?

  • Things could be worse
  • I can handle my problems
  • These issues are actually good ones to have – this is a opportunity to practice my coping skills



What I Control

I can’t make myself sleep. I can set an alarm and wake up at the same time, every_single_day.

I don’t control my moment-to-moment neurochemistry. I can exercise in nature and avoid excessive fatigue.

I can’t control my thoughts. I can control:

  • who I spend time with
  • where I spend my time
  • what I say, write and read
  • where I surf on the internet

Control the controllable – accept the rest.


Anger

Grief often manifests as anger.

Anger isn’t all bad – my anger might have nudged me to toss Facebook into the trash and that’s been a plus for 2020. Anger also motivated me to cut my intake of politics, another useful shift.

While I might not control my anger’s arrival, I can influence its departure and notice each time I choose not to act on my anger.

Not acting on anger – there have been some useful wins in that department over the last few months.



The Role of Steady

I went for a long hike on Sunday.

Afterwards, I was looking at the pictures and noticed it was the first time I was smiling, rather than wincing, in a long while. I’m laughing as I type because, all summer long, I couldn’t figure out why my face looked so screwed up in pictures.



Other than walking around in nature, the only other time I’ve noticed feeling really good was after an hour riding easy.

I haven’t done much anaerobic exercise. In the past, I’ve noticed sustained high-intensity exercise isn’t useful for mood management. There’s a brief high followed by a lengthy hangover, when I’m emotionally vulnerable and my will is tapped out.

If you are prone to “euphoria-then-crater” then watch out. I have good systems for keeping myself in check. I never train with faster people when I’m on edge, even a virtual leaderboard can get me into trouble!

How might I know I’m on edge? I could assume it based on the deaths around me.

If external reality doesn’t register then try looking inwards and watch for triggers being triggered…

…anger, sadness, hunger, sugar cravings, sleep pattern changes and/or small cuts that are slow to heal.

The list above is my early-warning system (of impending doom!).



Universal Goods

Keep the good stuff in your life.

  • Shared Experiences
  • Dietary Fiber
  • Nature
  • Music
  • Bright Light
  • Forests
  • Sunrises
  • Connection
  • Stillness

Schedule the good stuff with yourself, your friends and your family.

Focus on doing the good stuff and have faith you will overcome.