Monthly Archives: February 2021

Carefree

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Carefree, not careless => a capacity to look past flaws and focus on the relationship.

The pandemic hasn’t been all about cleaning toilets and chasing hairballs. It’s also been an opportunity to spend a lot of time with my kids.

I’ve learned a lot, especially from our youngest.

I’m a mission-oriented person – I’m most happy when I’m following the rules, ticking away towards an objective. The fact that other folks see the world differently can seem like a flaw in their approach.

How might these people see the world?

Through the eyes of connection and harmony.

This has implications for relationships and leadership style.

I’ll share a couple errors of mine that repeated until a desire to be more effective with my kids got me past them.

Don’t expect a carefree person to be the “bad cop” in any situation.

If there’s difficult news to be delivered, a negative consequence to be administered or even a negotiation to be had… assign the mission-oriented person.

That part was fairly easy to figure out. In any relationship, one party will be better able to handle conflict than the other.

Where I spun my wheels was trying to up-skill my partner to be more like me. A waste of both our time and unlikely to provide any improvement to the marriage.

Further, your partner may be a great listener while you waste both of your time trying to up-skill them in a manner they have no intention of following!

This is best illustrated by dropping our youngest off at a COVID-playdate. We pull up, and my daughter tells me:

Don’t worry Daddy, we’re always super safe and stay outside. Love you, bye!

She hops out of the car, walks over to her friend, waves and wanders right into the house.

She told me exactly what I wanted to hear, then did exactly what she wanted. My son and I looked at each other, shrugged and headed off on our hike.

So, not only is “teaching” a kind person (to be a hardass) a waste of your time. Be sure you leave them an exit.

Be willing to drop the point.

First, because it probably doesn’t matter. The point is never the point, with a relationship-based person. Feelings are the point.

Second, because if you’re going to see a truly nice person totally blow their stack then it’s going to be when you’ve cornered them.

If you need to come back to it then consider an indirect approach…

  • Do you remember that thing?
  • How’d that make you feel?
  • I was a little bit sad when…

Set the standard and love your ladies.

Groundhog Day

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Arapahoe Basin, Gully #4. “Dude, I’ve been dropping steeps since I was nine…”

I love asking questions. Here’s one from last week…

What’s wrong with being a househusband?

This question started a conversation about how great a job I was doing. The recognition was appreciated, but wasn’t the point.

That’s interesting, because when I said something similar, that you were having a great pandemic, you sniffed and said, “you mean I’m a better housewife.”

Well, actually, yes… 🙂

What was more interesting was my wife didn’t have ANY memory of the instant reaction she had. Her non-memory got me wondering how often my biases, and values, bubble up and leave no trace.

You might have a hidden bias against what’s required to run a good house. Call it the Virginia Slims effect, heavily reinforced by our collective culture and 50+ years of media/advertising.

If you think the internal dialogue is tough as a woman, try it as a guy.

Same gully, different aspect. Plenty of room between those rocks!

So the real point of the conversation wasn’t to congratulate ourselves for being domestic Gods and Goddesses…

The point was to create an opening to share ideas about coping with the grind of meals, laundry, dishes and cleaning that makes up family living.

You Gotta Do Something => I’ve had all kinds of jobs from “important” to “menial.”

COVID took my menial though the roof.

  • All jobs have admin/low value moments associated with them.
  • All jobs are better than having nothing to do.

Our minds might tell us that buying a white Porsche and focusing on our nails & hair will make us happy. More pleasurable than cleaning toilets, certainly, but I’m not sure leisure is “the answer”.

Meaningful work, not too much, well rested while I do it.

So, what are you going to do? And… What does winning look like to you?

You gotta do something.

You don’t have to enjoy it => My wife looked at me with in horror when I spoke the truth…

Honey, I absolutely hate dealing with the endless BS. However, I’ve decided, I’m going to continue regardless of how I feel.

It’s taken me decades to notice… that quote applies to every_single_thing I work on!

When there is a feeling that follows me everywhere… changing my situation might not be the answer.

It’s Temporary => Ten years of babies & preschoolers left no trace in my memory. I have to scroll back in my photos to see what actually happened.

Whatever you’re dealing with, do what needs to be done and schedule little sessions that perk you up.

In my case, it’s worth overcoming inertia to get my morning training, time with my wife and a chance to teach in nature.

Make time for meaning, while you manage the menial.

In each of the important jobs I held, I was replaceable.

Husband, Father, Leader => Give extra effort to the areas where you are hardest to replace.

Knowing “this is my job to do” makes it easier to endure.

Finally, something from watching my kids. There’s a part of me that wants my family to enjoy doing menial tasks. It stems from my desire for constant pleasure from every task life throws at me.

This is a completely unreasonable expectation, but it’s there. Seeing it, let’s me smile and shake my head when I catch myself in the pattern.

Meaningful work, can feel meaningless at times.

You are not alone in your feelings.

Best pandemic ever.

Teaching others in nature – always perks me up. Across my year of COVID, I’ve done a good job of scheduling events to look forward to. Find the win!

Alchemy by Rory Sutherland

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Changing gears from finance this week.

This is a really fun read. Rory’s style made me realize how much I missed both the UK and my pals in advertising. I loved my time in London and he brought back many good memories.

One of the most useful things about folks-like-Rory is they focus on what works. Rory’s book is packed with entertaining examples of things that work, but aren’t logical.

The more linear your thinking, the more you’ll benefit from this book. I needed to be reminded of the lessons inside.

Also – pay close attention to the layout of the hard cover version, especially his use of headers/font/footnotes/icons. The presentation is best in class.

Source – county level data

In personal news…

Boulder County is one of the least infected places in the state. The college kids came back and our positives have continued to decline. It’s winter, most aren’t wearing masks in the neighborhood and… nothing, go figure.

COVID defies prediction.

Source – state level data

Our school district is looking to get the middle/high schoolers back to 4-days a week (from 2) after March Break. So starting March 29th. Schools open for students, luxury.

Personally, I think we should be opening up a little quicker but support the delay to give more time to get the most vulnerable a chance to get vaccinated.

Based on my peer group, there is some connected-party vaccination happening in priority to our at-risk population. It’s the most simple way to explain the disconnect between doses into our community and the continued waitlist for the 70+ population.

I was happy to read about teachers getting vaccinated direct from their school district.

My wife learned to uphill so we could spend more time together. Appreciated!

A bump in my training load (my first “real” training since September), means my 3:45am wake up has proven unsustainable.

With my daughter’s evening swim practices, I was having to double-nap (most days) to make it through the week.

I shifted to 4:30am starting last Saturday, luxury.

Such. A. Great. Kid.

As this publishes, I will be heading to Arapahoe Basin to see if the Steep Gullies will go. Our first venture into hike-back terrain, we brought our skins.

Hopefully, you get a chance to be outside this week.

Enjoy 2021.

Make It Fridge Worthy

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There’s a lot in this section of my fridge. Bora Bora, Valentine’s Day and leading out the swim at Ironman Hawaii.

Over the last six years, our discretionary budget has been simplified to vehicles, skiing and vacations.

Let’s start with vacations.

Most families with kids, place their vacations before considering Childcare and the size of their mortgage/rent payment. I recommend you reconsider your priorities. Earlier I explained why, I sold assets so the grown ups could maintain their health and relationship.

When I was living with a 4, 2 and 1 year old – my favorite kind of discretionary spending wasn’t a vacation, it was “more childcare”.

Always, more childcare.

Why?

End of the Napali Coast Trail – worth the hike!

To be a good investor, you need to know your opportunity cost.

Same deal for being a good spouse!

The Bora Bora vacation (above, still on my fridge) is the equivalent of 150 date nights.

When I was working through a decade of bedtime dramas… I priced my life in date nights (time with my wife, time without a kid melting down).

Date nights where someone else can put the little ones to sleep, and you can alternate the following morning with your spouse.

Alternate the routine so each spouse gets a slot where they are “off” from 5pm to 10am.

“Sweetie, I just need two nights a week where nobody is yelling at me.“

I was willing to do whatever it took to achieve a nervous system reset 2x per week.

Hanalei Bay, Kauai

Still want to head out of town? These were my rules for luxury spending:

  • make it “fridge-worthy” (re-live the vibe over-and-over)
  • book it way in advance (create anticipation)
  • take a lot of pictures

The trips were a good bang for the buck, we spread them out, got stuff done and had something to look forward to.

We found shorter trips were better – if we left for more than a few days, our Alpha Pup would try to take over the household!

We left the kids at home, in their normal routine – never risk the sleep schedule!

Take a look at your budget, are you making time to enjoy each other?

Reframing Envy

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Monday, I shared some ideas about searching for the underlying need.

Most of us spin our wheels for YEARS before we wise up, usually after a major crisis, and decide to drop the external BS that rules our lives. A divorce 20 years ago nudged me in a better direction.

Still… my time in finance always left me desiring more – more money, more stuff, more financial success. When I slid over to athletics, those feelings followed me – more victories, more performance, more speed.

Under a constant barrage of “more” – both external and internal – How does one cope with the realties of a more modest existence?

I once got to fly on a private jet, it was wonderful. My host single handedly changed my opinion of the UltraRich => such a great guy.

My advice to “live where you don’t need to leave” is a coping strategy to free myself from a desire to live like Mick Jagger.

Put another way, I looked deeply into a well adjusted billionaire’s life and saw… there is no “more” to be had. Once I sorted my cash flow, I could access the best parts of his life for a fraction of the cost.

COVID drove this lesson home. Live your best life, with your family, under one roof. 11 months and counting!

The last few years, we’ve spent a lot of time in Vail. In a ski town, most everybody likes to know what you do, and where you live.

So Gordo, what else do you do beside ski?

Weights, Paul. If you want to rip the bumps then you gotta hit the weights.

My wife got a huge chuckle with that reply. The possibility of another layer to that question didn’t brush my consciousness.

Coping by redefining the game.

Spending a lot of time in the mountains, brings back the urge to own multiple properties.

When cycling was a central part of my life, I owned property in Arizona. It was my way to hang onto my pre-kids life of switching hemispheres in an endless summer.

Can you see what I was doing? Buying an asset to hold onto an illusion.

The illusion that my life would be better with more assets never leaves. The dream persists alongside the knowledge that the assets will lie idle, cost money and generate admin.

In my first career in finance, our firm had access to money. Lots of money!

When you have access to money people want to be your friend. A favorite quote from my well adjusted buddy with the jet…

I’ve got enough friends.

Related, “When is five “likes” better than five thousand?”

When you deeply understand the nature of external approval. Both what it does to you, and who is doing the approving.

The bold words are reminders to avoid the false gods of financial wealth. Specifically, to be wary of the temptation to follow my greedy impulses for no true benefit.

Get the cash burn down, address the underlying need and let envy float away.

Learning From The Well Adjusted

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I’ve been fortunate, to get a look under the hood at the lives of the conventionally successful.

Before we get into tactics for discretionary spending, it’s worth thinking about what our spending might bring us.

What’s the strategy? Where are we trying to get to?

Thinking back to last week => if you think about my childcare spending with this in mind… it makes much more sense. I wanted to maintain my ability to explore nature and create space for a little serenity.

My first boss was a very successful investor. He repeated his success multiple times, with different teams, across a long time horizon. I use what he taught me, every day of my life. A favorite quote:

It’s the first five million that makes a difference.

You’re going to read that line in your own voice. You’re going to overlay your own values. To understand, for myself, I had to watch what he did for a number of years.

He loved what he did and he didn’t like to be told what to do. He was living in London, with two kids, in his early 40s, with limited interests outside work… what money brought him was the freedom to leave any situation he didn’t like. To be his own boss.

Related from another self-made mentor, talking about a family member with cash flow, who left a successful firm, at a very young age.

Nobody ever goes back.

So, if your financial chase means you are beholden to your boss then you’ve missed out on a key benefit

  • the ability to control your own schedule
  • the ability to walk from unreasonable demands

Once you realize the underlying need, you will be able to address it with far less money than you think. The entire point of my financial writing.

What do successful people do when they’re not being successful?

My first boss used to read about accountancy! He’d head off on vacation with a large stack of Accountancy Age (or whatever it was called) and work through back issues. His partners got a kick out of that. If you wanted to learn about financial fraud, he was your man!

My lifestyle aspirations are a better fit with the smart folks I met through sport. There are a lot of high-achievers in masters athletics.

What did I see?

Mastery, novelty, competition, adventure, peril, connection, shared suffering… ideally, combined with heart beats in nature.

Adventure, beauty, variety – there is a ton of it within 90 minutes of my house.

No balance sheet required.

Creating A Better Reality

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Ask a good looking tennis pro to offer their view on the sanctity of marriage and you might be surprised. Away from prying eyes, there is a fair amount of “but we never hooked up” going on.

At it’s core, this post is about keeping your home life a mile away from an unfortunate outcome.

Circa 2014… My phone buzzed when I was out-of-town. You can see my son hiding from his sister. She was bleeding a minute later… smashed her face when she fell off the couch. My memory of this moment was thinking how great my wife looked.

About the time our first child was born (2008), I found my financial life under pressure. The approach we took was unconventional.

We downsized and, effectively, spent half the proceeds from the sale of our home on childcare. I did this with the full knowledge of the annuity math underlying our financial lives. Over a decade, our childcare bill was the equivalent of ~5 years worth of current living expenses.

Most financial advisers would advise against selling a house to pay for childcare. Many families go the other direction => up-sizing: (a) complexity, (b) bills and (c) financial stress… when the kids arrive.

Downsizing was one of my best decisions of the last 20 years. It enabled me: (a) to get help to directly improve the quality of my marriage, (b) to give my wife some space, and (c) to maintain some form of personal life, at a time of great change.

This is fine – I was out of town for this one as well. Check out the baby, she’s purple.

This next one was a happy accident – I just wanted the kids out of the house.

My wife found an outstanding preschool. The lesson: socialize your kids as early as possible.

While my kids don’t always get along with each other, they are experts at getting along with others. Not spending this money would have been a false economy.

=> Total here was equivalent to another year of current living expenses.

Unexpected bonus from this choice => spending time with outstanding preschool teachers made me a better parent AND give me a deep respect for the quiet achievers in childhood education.

Because we focused on socialization, all three of my kids started Kindergarten behind their peers. We didn’t panic and this worked itself out by the middle of Grade Two. We gave a big push in Grade One to support our son learning to read – lots of little lessons at home and at school.

So it worked out to ~50% increase in Core Cost of Living for a dozen years.

Another way to quantify for you… finish college debt free, save $1,000 a month for 20 years, roll the capital into a good real estate deal… Gone by my 50th birthday.

The Lesson: the skills required to accumulate Financial Capital are different from what it takes to develop Human Capital (kids and marriages).

I don’t miss the “half a house” – it was an excellent trade.

Childcare, early education and health insurance => if you want to bring something to your adult kids, without creating incentives for consumption, then these items could be a good place to start.

It’s easy for a well-intentioned, conventionally successful family member to create lifestyle inflation for their entire family system.

Helping pay for preschool seems a pretty safe bet for help-without-harm.

PS: If you spend your weekends out of the house then remember my warning about your spouse “not hooking up” => most bad things done to me, have a seed in choices made by me.

Family Spending Principles

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West Ridge, Eldora

An observation that I am trying to pass along to my kids.

My never ending desires are rooted in a false idea of what will make me happy. I have a clear idea about the structure of the days that are “better.” Achieving better is easier, and more rewarding, than chasing pleasure from purchases.

To help me achieve “better”, I have a series of principles.

1/ Visible spending for wife, first // This works on a number of levels.

  • Don’t buy something for yourself that you wouldn’t buy for your entire family.
  • It easier to be value conscious when I remove myself from the purchase equation.
  • It’s just good policy.

2/ The minimum outlay to meet the underlying need

Strangely, I got this via Joe Friel on coaching masters athletes => the minimum, and the most specific, training to get the desired physiological adaption.

Capital takes time to acquire and is easily squandered (spendthrift heirs and lottery winners are common examples).

A default to the minimum reduces the scale of my (inevitable) errors and increases the ability to change my mind later.

3/ Do not sweat the small stuff – set a Give A Hoot threshold (links to Marriage Money article)

Set an annual plan, track the cash quarterly and promise you will not sweat the small stuff. Good people are made miserable by tracking every nickel.

Stay out of the weeds so your mind is able to think and get the big things right.

4/ Avoid Choices That Have A Material Cost to Hold => this applies across domains (assets, leases, friends, family, commitments, Facebook/eMail). The math from yesterday.

There are many ways to find yourself over-extended… debt service, cash flow, emotion & time.

Exit bad decisions => they crush you on all levels.

Mark Allen on pacing…

just because you’ve made a bad decision, doesn’t mean you have to continue it

Combine these principles and you’ll find the sum is worth more than the parts.

Dropping into West Turbo. Pali Chair, A-Basin.

My son asked about the last big purchase I made, other than real estate.

My off-the-cuff answer was “we don’t spend much money” but that didn’t line up with what I know about our cash flow statement.

So I spent January thinking about it. Next time, the best financial choices I’ve made across my marriage (16 years this summer).

Different Ways of Looking At Money

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Yesterday morning at A-Basin. My son has developed a taste for narrow chutes.

I’ve had gigs that pay $500 per month. Let’s have a look at what that’s worth.

What is $500 per month worth over a decade?

  • 10 years, 12 months a year, $500 per month => $60,000
  • That’s straight math, no implied additional costs/benefits.

What if I swept the cash from my side gig into a Target Date Fund?

I estimate a 60/40 portfolio returned ~9.7% per annum across the last decade.

  • 10 years, 9.7% a year, $6,000 per annum => $94,250
  • So if I’d invested that money, each month, for a decade, I’d be getting close to $100K

10-15 clients at $500 per month, less a bit of overhead => close to $1M in a decade.

Flipping this example: my condo association charges me an extra $500 per month.

What kind of headwind does that put on my real estate investment?

  • We have an example from above, $94,250 per decade. $94,250 is an estimate of the cost to my balance sheet of sending money to the condo association, rather than a 60/40 portfolio.
  • However, there’s one more step because we pay expenses from after tax income.
  • Do you know your average tax rate? I use 25%.
  • $94,250 / (1 – 0.25) => $125,000 // this is called grossing-up your answer – to pay $500 per month, I need to earn $667
  • So a charge of $500 per month could drag your return down by $125,000 a decade.

Recap of the three ways:

Nominal => $500 per month is $6,000 a year is $60,000 a decade

Opportunity Cost => $6,000 a year not invested implies $94,250 in a decade if the assets earn 9.7%

Grossed Up Opportunity Cost => $6,000 not spent, and invested pretax (retirement account), has an opportunity cost of $125,000 in a decade

The exact numbers are not important. What matters is understanding the concept… repeating amounts become big money over time.

$500 per month is going to cost the family between $60,000 and $125,000 a decade.

Expenses avoided, small gigs (earned then invested), and holding costs… these can have surprisingly large impacts on your financial life.

Seemingly small gigs are worth more than they appear…

  • if they come with health insurance (my unsolved family budget line item)
  • if they come with discounted prices on goods you are already buying (part time work at a business you’re already spending with)
  • if you make a habit of sweeping the income into a Target Date Fund (side gig cash invested to benefit my future self)

Something I like to do in my financial life is look at the line items in my family budget and ask… “What’s it going to take to eliminate that cost?”

If I can’t eliminate then, “What work might I enjoy to mitigate the cost?”

The game being to get my net cash burn to zero, while sustaining a life with meaning.

This morning’s sunrise on top of Eldora Resort.

Enjoy 2021 – there remains a lot we can do, while remaining smart to mitigate COVID.

Teaching Kids To Smoke

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Growing up, I spent ten idyllic summers at a YMCA camp on Howe Sound.

When I worked my way up to Senior Staff, I learned part of the camp’s Oral History => prior to the 1964 Surgeon General’s report on smoking, the camp used to sell cigarettes in its Tuck Shop.

My boss at the time, told me it went further.

We used to teach kids to smoke.

Keep in mind the camp was run by the Young Men’s Christian Association – these were good people, trying to help a wide range of kids.

The story reminds me to keep my eyes open for obvious harms, accepted by everybody.

Current practice can be completely clueless.

Vaping “it will shift people from smoking” is an obvious example. A handful of entrepreneurs hooked a generation of young people before anyone noticed.

Less obvious is the introduction of electronics, and social media, into the lives of our children. My kids have been staring at screens since preschool. COVID institutionalized screens into the daily lives of our children.

Here’s what I’ve told our oldest, now in Middle School.

  • You don’t want to spend your life doing sexy dances for strange boys and men (TicToc) => who’s on the other side of the screen?
  • There’s no such thing as digital privacy – it does not exist
  • You will need to make a choice => do I want to get stuff done, or stare at screens (IG, Snap, Among Us)
  • Your mother and I saw what it was doing to us and stopped
  • Exercise makes you happy – I point this out after every good workout

Similar to conversations I expect to be having on sex, drugs and alcohol… I had to get my own life in order before I attempted to teach my kids.

Who am I really trying to impress? Following a path of external approval creates a never ending cycle of “more” (likes, followers, stuff, money, food, victories). Where is “more” going to take me?

Fastest way to boost health and self-confidence?

  • Positive Action => a habit of daily exercise
  • Via Negativa => ax the Social Media

Right now, your mother and I are making smart choices for you. Soon, it will be up to you.

Choose Wisely.

Little update on my 2021 tech initiative.

  • January saw me cut my screen time in half. Pretty impressive from a single workflow change and deleting two phone apps.
  • My eyesight improved.
  • Less eMail/Twitter is far easier than less “news”.