Above treeline with my kids on a Wednesday – most definitely, the real thing
Cam recommended a book…
A favorite currency is good ideas.
One good idea per book, per meeting, per trip…
Taking my kids to the library every Tuesday this summer => has proven to be a good idea. We look forward to the time together.
I spent decades being too busy to implement any good idea that involved slowing down.
I was only interested in ideas that helped me get more.
The good idea from the book above is “seek the real thing” => it’s similar to advice I give myself => look deeper, consider my un-met need, what are my actions saying about my values…
Approval – social media is driven by our need for approval. We get just enough to keep us coming back for more.
For me, the real thing is teaching kids. They are hardwired to think any reasonable human is an all-star, and that feels great.
Another favorite currency… a child’s hug, a deeper form of “like.”
Self-aware of goodness in action.
With the real thing, there’s no clutter, no background noise, no BS.
The author talks about sex being a motivator and it is, obviously.
…but that’s not always an option.
Consider skin-to-skin contact.
Massage, hugs…
Time, to look around
As an elite athlete, I’d rarely stop, take pictures or notice my surroundings. There was a constant feeling of being in a rush.
This feeling goes back as far as I can remember.
At child’s pace, there is plenty of time: tiny flowers, distant goats, chubby marmots, streams, snow patches shaped like dragons and bugs…
Time to notice > scrolling in air-con.
There’s a persistent illusion that I’m doing something when I’m roaming online, but I’m not.
And nature is a much more effective form of nothing.
…but I need to get past my personal inertia.
…and that’s the author’s point.
In a world of competing interests, prior commitments and personal goals… where to focus?
Focus on moving myself towards the real thing.
Each of our kids has a calming blanket – programmed into them since birth, along with skin-to-skin human contact. The blue one in this pic works well on both of us. 😉
I spent the last week 1-on-1 with our oldest. Some in Mexico, some in Boulder.
Our oldest has a big interest in all-things-family.
I spent the weekend getting her on-side with some family adjustments.
Many families keep the kids in the dark about family finances – with our oldest coming into her teens, I’ve started the process of educating her about how to run a household.
I’m hoping improved disclosure will result in her supporting shifting some of my wife’s time back to me!
Do you know how much money it takes to run the family? No idea.
Why don’t you guess. $1 million
No, no that much but I did work for a guy that was close to that. Big spending creates big pressure.
We iterated until she got close enough.
OK, I need to come up with that much cash every year. That’s my main financial job and I enjoy it.
Now, how many days do I get each month in exchange for coming up with that cash?
What do you want to do?
Well, I’d like to do something other than hang around the house, alone, and do housework.
This time she answered bang on => two days per month.
June, July and August => How many days are you away with Mom? Ten each month.
Let’s convert that to a nice round number for the year. 100 days.
Take those 100 days, are they going to make my marriage stronger, or create stress?
Panic (!) on her behalf as the penny drops… I talk her down and reassure her that our marriage is “great”.
She did not need any encouragement to want to strengthen her parent’s marriage.
She did need to calmly, slowly, be led through where her desire to constantly take her mother away might lead.
She immediately came up with a useful idea => alternate chaperones with her best-swim-friend. A win-win-win for all of us.
On to cleaning => Earlier, she’d been slamming the vacuum around because she didn’t want to do her weekly chores.
She gets this from me, I’ve been known to toss furniture when frustrated. I’m trying to cut back on acting-out frustration. Out of all of us, I’m the one who needs to improve the most!
Sweetie, did you notice that I spent the last two days cleaning the entire house?
Yeah, but you had nothing to do.
Sweetie, how do you think that statement makes me feel?
Not good?
Actually, not that bad, the house does look great and that makes me happy. Do you think that there is something else I might rather be doing than staying home alone and cleaning?
That led us into a discussion about relative contributions.
Human happiness is a relative metric.
Is it fair that I’m handling all the cash generation, and doing most of the housework?
What would you like me to do?
I’d like you to help me spend more time with your mother. She’s my favorite person in the world.
My wife asked me to share ideas about our marriage.
I’m better in writing, so I figured I’d leave this for my kids, and you.
This morning, the summit of Bear Peak – one of the coolest places in Boulder County
16 years – it went by in a flash.
My inability to feel duration, can make me a little sad. I have a hunch that soon I’ll be an old guy wondering what just happened!
Acknowledging the reality of the fleeting nature of time… it is useful at helping me stay focused.
No time to waste.
Best Swim Coach, EVER
VP Pence took heat for his rules of marriage. To me, they were OBVIOUS and reflect how I act.
I met my wife at the pool. As a result, I don’t train with attractive, athletic females (other than her – she’s very attractive).
I don’t consume alcohol with females, or anybody else.
I don’t find myself 1-on-1 with females, especially other people’s spouses.
The above is a simple risk mitigation strategy. Applied across domains, over 50+ years, it works.
I keep myself away from situations where a poor decision results in ruin.
I pointed this out with regard to Andy’s accident and it applies everywhere. The decision is best made before you have to make a decision.
How do you stack up?
Wedding Day
So many have conflicts over money.
I don’t.
Since the late-1990s, I’ve paid the living expenses of everyone (male/female) who’s lived with me. By the time, our youngest graduates high school the bill will be over $6 million.
My favorite wife-quote about family finances is when she said to me, “What do you know about money?”
I just smiled.
I know how to make it, when to stop reaching for it, and what’s more important than money.
My financial knowledge has enabled our family to live a good life AND I have been able to educate my kids.
Most parents want to see their kids grow up. I made a choice to go one step further. I’m educating our children in how I see the world. These lessons will endure into the next century.
Invert => how much of your family’s financial wealth from 1950 do you have right now?
My ancestors legacy is good ideas, memories of what didn’t work, a debt-free education and a life-changing introduction to my first boss in finance.
She wouldn’t have been smiling if she knew the doc had underestimated the size of the baby by three pounds. There’s a lot about childbirth that’s better not to know.
To finance our life, I need one good idea per decade. The rest of the time I avoid mistakes, and manage spending.
It takes a lot of effort to avoid mistakes. I write this blog to help my kids identify their inevitable mistakes.
Mistakes are effective teachers, I “manage” by:
letting things go wrong
letting other people be wrong
surfacing, considering and fixing my own mistakes
Across 50-100 year time horizons, wealth habits add up. A simple annuity calculation (laid out many times in previous blogs) will show that my choice to avoid financial conflict will end up “costing” my heirs millions.
The human capital I am building will more than cover this amount.
Education
Motivation
Ruin Not Experienced (divorce, substance abuse, spending, investment)
There is deep, multigenerational wisdom when we act with long time horizons. In my current life, I try to be the parent I’d like my grandkids to experience.
You will not regret creating a composite image, like this, for each of your pregnancies
What are the choices that caused your family tree to lose capital, lose members and lose productivity?
Be as open as possible about errors, they tend to repeat.
Not all toddlers are difficult
Two years ago, my son decided to hold up his finger and yell, “BOOGER!”
Yes, there was a nasty one hanging there!
As I sorted his booger, I decided to fire every staff member in my life.
What works:
An unimpeachable moral authority stemming from out-working everyone around me
Relentless attention to detail (in myself) – no days off, no exceptions
A schedule that enables me to follow up on the above, especially when it’s inconvenient
Before talking to others… How do I measure up?
Confidence comes from knowing you can outwork your competition over long time horizons. My kids are very confident, with good reason.
Tough to beat.
Get in my belly!
Let’s talk about staff.
We got through the highest stress period of our marriage (babies and preschoolers) because I had the courage to make a poor financial decision. I spent money so we could maintain some sort of life between the two of us.
Our recent trip to Death Valley let me price opting out (of living in the real world).
160 student contact days ($50)
Leaves 205 non-student contact days ($200)
365 overnights ($50)
Multiply that out, gross it up for payroll taxes => $80,000 per annum and I can watch someone else deal with my kids boogers… 😉
I’m sure many professional people cut that number in half when calculating the exit cost from an unhappy marriage, or when feeling overwhelmed (as we all do) with a young family.
But is that winning? Before blowing up a marriage, look two generations out, consider your unborn grandkids.
I don’t serve anyone by having my family see me opt out.
Queen Elizabeth comes to mind. Still grinding!
The goal of life is not to opt out of the obligations of citizenship, or be worshipped for position. To build a successful organization, requires a long term commitment to service.
Even then, there’s going to be scandals, setbacks, challenges and very good reasons to quit.
Keep moving forward and be comfortable with what you control (your actions).
Goodness, in action, inoculates one from the options of others.
If you want the result then you must accept the work.
Finding => Be the person you want to marry => you’ll have a positive influence on everyone around you and, when things don’t work out, you’ll be well placed to keep moving towards better.
Retaining => Be clear about your minimums => cleaning, sex, financial contributions, social engagements => table everything you hear your friends complaining about.
Optimizing => Take care of yourself => knowing it is better being married to an athletic spouse… I need to be an athletic spouse.
Being Effective => Do not manage from the couch => If you don’t care enough to stand up then let it go.
Willful Blindness Is The Seed of Bitterness => Be clear about what you don’t want => very few people want to be left alone and, even the kindest partner, is likely to grow bitter when the “division of inconvenience” is out of whack.
Knowing actions matter, I watch => in myself, and everyone around me…
What is done first?
Ruthlessly honest inventory of time allocation. Do not fool myself by saying something is important, when I allocate little time to it.
What am I doing when I am willing to inconvenience myself? My core values live here.
Is there something small I can do, daily, to support the people who are essential to me? Have I asked?
I try to stay humble by remembering how each chapter of my family’s story will end.
Iterate towards better. Document, then share what works.
Often, when sharing my experiences verbally, the listener thinks I am:
talking about their life
giving them advice
suggesting they are wrong
Any one of these is enough for a conversation to go sideways.
Better to blog!
There are a couple areas of life I know well.
I know these areas well because I have been able to live the lessons of the largest mistakes that have been made around me. This is my superpower.
So, I guess, when sharing my opinion on sensitive topics, it would be best to preface my observations with…
You could do that, you would certainly be justified. In fact, my family tried that a few times. However, for us, that course of action ended in a multigenerational disaster.
My mom died last year, so she won’t mind me sharing a family anecdote to illustrate my point.
Many years ago, I visited mom in Vancouver (our hometown). On the visit, she said she wanted to introduce me to a friend. I agreed and we headed off…
…to the courthouse!
Her friend was a security guard at the courthouse.
I didn’t get served with a summons but the introduction was a little weird. The guard was polite and we exchanged small chat before heading on our way.
Over the 1990s, mom had whittled down her peer group to a security guard at the courthouse. Social isolation did not have a positive impact on her mental health.
Her mental health descent was a biggie.
I have a childhood memory of mom being the cover story on Vancouver Magazine. It was a time when she was busy, engaged, productive and socially connected. One of the most successful businesswomen in town. Beautiful, happy and a very good mother to me.
FWIW, I look at the Free Britney movement and think we should give that family space. Many elements of that story fit pieces of my family history.
In a war, disagreement or divorce… at some point, someone has to stop fighting, regardless of the facts.
A few years after her Cover Story, mom’s life started to fall apart. In the process, she got into a habit of not letting go, of anything.
Mom sued everyone possible, for as long as possible, and achieved nothing but negative consequences for all parties.
Except me!
I inverted and applied this lesson, the lesson of watching what happens when we don’t stop fighting, as the guiding principle of my adult life.
My adult life truly started when I stopped engaging the toxic personalities in my life and… used money to avoid BS, the highest utility spending I know!
One example, I bought the contents of my home when I got divorced. I’d purchased everything in the first place, and paid off my spouse’s debts when we were married. So it seemed silly (to me) that I had to purchase everything again.
But I’d learned the lesson.
…and the check was small relative to the BS that would have resulted.
When you are thinking about using money for revenge… …better to use it for a clean exit, that moves you towards your long-term goals.
By the way, I could tell you all kinds of stories about “what was done to me” during my divorce.
My former spouse could do exactly the same.
We’d both be right.
Our stories would be true, and some would appear diametrically opposed.
Rather than arguing truth…
Sit back, pause and consider…
What’s best for the youngest members of the family?
What actions should I take with their interests in mind?
Ironically, in my divorce, I was the youngest person involved.
I took great care of my future self.
This isn’t always the case.
Kids bear all the pain from family conflict and receive none of the benefits.
Do you want to hear what was done to me? Actually, no. That wouldn’t be helping you, or the youngest members of your family.
What’s the outcome you want 10 years from now? Get to work on that.
If I’d had what they have, the only certainties in my life would have been a Range Rover and a cocaine habit
I like Scott’s blog because he’s brutally honest, and entertaining!
Each week, I am reminded => we generate results in the places where we invest our time.
Look at that sky! High altitude blue – love it
The “they” in the quote is Scott’s kids. Every parent I know, wants their kids to be successful.
However, and it is a big HOWEVER… these discussion have an embedded conceit because, each generation, each individual, must decide on their own definition of success.
A definition of success is tricky for me.
I have watched, and blogged, as my thoughts on “winning” changed across each decade of my life.
Humbling.
Go a little further…
Am I successful?
What do my actions say about my values?
Can I write down my definition of success?
Am I willing to shift my external worries by redirecting worry towards improving myself?
Baby O’clock
Scott’s aside about Range Rovers & Cocaine – is really a discussion about the impact of abundance on family systems.
I spent Father’s Day talking to my kids about this topic. They asked:
Dad, has there ever been something you couldn’t afford? => Lots.
Dad, are you rich? => I’m rich in time, amigo.
We were driving in my 4Runner (not Range Rover, BTW) and it gave me an opening to explain the concept that some things are “not worth it”, even when you have the money (or debt capacity).
I used Toyota Trim level as an example. The “TRD Pro” trim costs about double what I paid for my 4Runner.
My 10 yo instantly understood that a few more bells & whistles would not be worth the same as two 4Runners.
Two cars, same money… better than one car.
Amigo, it’s the same thing with being rich. You need to trade a lot of time, to get all that money. When you trade that time, you don’t get to go hiking whenever you want with your kids.
…and even when you are with your kids, your mind is probably some place else.
It is impossible to convey, and quantify, the value of being present.
World’s Best Baby 2011 – on the road for a training camp. We’d bundle him up and he’d happily sleep in a closet with his pack-and-play. I traded a lot of money (I didn’t need) to be an elite athlete.
So when we worry about our kids — let’s be specific.
How do our actions, our friends and our environments define success?
As the most direct male role-model in my children’s life, I am going to…
Live below my means – because it makes sense for me, places a lower success-burden on those who follow me and I know pleasure is a false-god
Train every morning
Listen to you (all of you, BTW) and apply your best ideas – I’m going to find the best tips and live them
Change my behavior in the face of valid criticism – I can handle bad news!
Act in the best interests of the collective – Citizenship!
Nothing in there requires external validation.
I’m 100% in control of outcome.
Important to remember, especially in an Olympic year. 😉
To pass along those values, I need to BE those values, especially when it’s inconvenient.
…but “being” might not be enough to educate my children.
If outcome really matters to me then the kids need to understand who we are by watching me move through the world, when no one is watching us.
Call it a “values education” => the foundation of a family’s Human Capital.
Back to Scott and Wealth in Families… how might we use wealth to help someone without subsidizing consumption, or increasing their risk for addiction?
First, we should acknowledge that the capacity for success walks hand-in-hand with the capacity for self-destruction.
I touched on this last week. I have the capacity to “win big” via the singleminded pursuit of a goal.
My past tells me that I need to choose wisely.
It’s highly unlikely anyone is going to get it right all the time. So when the inevitable setbacks arrive, it’s useful to have a “values education” to fall back on. A form of winning that I control and doesn’t depend on the opinions of others.
That said… you got the money, what can we get done for the family?
Debt-free education, to the best of the kids’ ability, in a field where they can get paid.
I bought into that concept at birth. Our College Accounts can fund a surgeon, an MBA and an electrician. In-state.
So we’re working towards a proven set of values (first) and the family can help its members educate themselves (second).
Not done yet.
Back to time.
Where can I have an impact? When I get past my personal inertia, little doses can have big results.
My latest initiative… read aloud 100 days, not in a row, daily duration in minutes is equal to your age… do that and you earn $100. For example, my 10 yo needs to read aloud for 10 minutes, for 100 days.
It’s not enough to live an example, to allocate money.
If outcome truly matters then look for ways to give time.
Attention, expressed as time being present together, is what my kids seek and value.
Same thing for a marriage.
Hands up if you like weekday summits with your spouse…
We generate results in the areas where we allocate time.
KP and me, at the start of a wonderful partnership.
If you came to KP and asked him to turn you into a champion then he’d start by having you dive into a cold pool, predawn, three days a week. At the beginning, it didn’t matter to him what you did at the workout. The key was getting there, and diving in.
There was a lot behind Kev’s instruction: wake up early, face the predawn, make a habit of tolerating discomfort and rack up an early win.
It’s a form of superpower.
I’m ticking down the final workouts in an eight-module series. It’s the longest challenge I’ve ever completed, going to take 60 weeks.
Expert level stuff, due to the pandemic.
Normally, I aim for focus block of 105 days (15 weeks). Stay put and make sure the first thing I do every day is one positive step towards my target.
I was in my 30s before I ever truly applied myself. The results were life changing.
My strength training history runs 37 years into my past, to a rickety Universal Gym in high school.
To “win” at strength training… dive in, and stick with it.
Over 37 years, the specifics don’t matter as much as I tend to think.
I like strength training for a few reasons:
You can always find something to improve.
It doesn’t take much time, to capture most the gains.
Done properly, it’s useful.
To contrast different meanings of “properly”, I’ll share a story from a Kiwi friend of mine. He used to train “hard”.
Hard… as in, bring a chair into the shower so you didn’t have to stand after swim practice.
Hard… as in, needing to pause walking up two flights of stairs after a track session.
His more moderate friends asked “why” and “what’s the point” => well, he was trying to get good. In his case, “good” for triathlon.
Proper training, getting good, optimal time allocation.. it helps to know the larger goal sitting behind your daily routine.
Where are my daily actions likely to take me?
I’m aiming towards being highly functional at 60 yo. For my kids, the techniques are similar but the goals are different.
So let’s take some lessons from sport and apply them into the larger world.
These techniques work.
The most important thing to remember is Coach KP’s advice to DIVE IN!
Above, is a picture of the swim finish at Ultraman Hawaii. I’m 33 yo and leading out. Just before my 30th birthday, I’d started swim training. When I started, I wasn’t able to swim more than 100m of freestyle without stopping.
Ultraman is 10,000 meters, point-to-point, in Hawaii. Because the coast is curved, there are times when the athletes are more than a mile offshore.
Daunting.
I’ve gone from zero-to-decent in a wide range of activities.
Passing skills to my kids, and my readers, is the main way I impact the world.
Let’s start by addressing what holds us back from diving in…
It takes way less than 10,000 hours to get proficient at something.
3 swims a week, every week, for three years, was enough for me to get proficient – defined as 57-minutes for an Ironman Swim.
From proficient to outstanding => the diminishing returns kicked hard… about 1,000,000 meters for each minute reduction in Ironman swim time (down to 50-minutes for 2.4 miles).
If I told myself the path to swimming greatness required 10,000,000 meters then I might not have started.
Here’s the thing, I captured most the value in my first 1,000 days of swimming – 30 to 33 yo.
In weightlifting… 15 to 18 yo.
In calculus… 18 to 21 yo.
In finance… 21 to 24 yo.
Think about your own skill development. There is a 1,000 day ramp up, after that, it’s about depth.
At the start of the pandemic, our schools closed and we had to figure out home school. One of our most popular sessions was Art-with-Mom.
My son didn’t think he had any talent. He had fallen prey to the hazard of thinking his current ability reflected his potential.
Turns out the kid is great, but he had to start to find out.
You might think you’re stuck in your ways. I’m not so sure. The capacity to change does not have a sell-by-date. Radical change can happen from seemingly small choices, done daily.
The picture above… What’s happening there?
Consistency => since my kids have been able to stand, they have done at least one swim workout per week, every week.
One session a week will not get you to the top.
However, a decade of consistency, might get you to a position where you can get really, really good by doing 10-sessions a week for a few years.
Option Value for Excellence => an opportunity to take myself some place interesting (but I got to dive in).
Regardless of outcome => positive habits are useful, to crowd out bad habits and surround one’s self with go-getter peers.
Sport, languages, art, academics, learning to read, vector math…
How might one go about making dramatic progress?
Set your daily hurdle at the 1,000-day rate.
Let’s use teaching a kid to read for example. Learning to read is the highest return activity I have ever come across. Improving reading comprehension yields a durable competitive advantage.
The best way to teach a kid to read is… “reading aloud with a kid.”
Thing is that’s often inconvenient for the parents. Fortunately, it takes very little support to change the life of a young reader.
5 minutes, AM and PM, every_single_day, for as long as it takes.
We saw progress after 15 weeks, about 1,000 minutes of my time.
Roll forward 1,000 days and my kids start each day with 20-minutes of reading.
A year ago, we tacked-on Spanish with a 5 minute daily hurdle. The younger kids started with Spanish School Bus and our oldest with Duolingo.
This summer, we progressed to hour-long classes with an online tutor. The progression seemed natural to the kids. We’re Zooming into Guatemala for the classes.
Five minutes, to 20 minutes, to an hour.
Nobody noticed…
The Power of Incentives is always under-estimated, not just in executive compensation!
I pay for achieving a streak.
The first 100 days of the minimum is worth a $100 gift.
Paying off a summer reading streak was how I bought my way into the 20-minutes every morning.
With a top-up from his grandparents, my son rolled a 300-day Spanish streak into the lego you see at the top of this section.
My daughter did a deal for a guitar by committing to 100 lessons.
Track your streaks, and don’t mess with them!
Positive Cascades Start With Action Before Dawn
I pay attention to what I do before 7am.
There seems to be a positive cascade that results when I can get something useful done before 7am.
If you have kids then getting them on this schedule also makes bedtimes easier => for years, bedtimes were the absolute toughest part of my emotional life.
If you have trouble falling asleep then don’t worry about it. Consistently wake up early and start getting stuff done. Your sleep will sort itself out, or not. Either way, you will be better off.
Back to 37 years of strength training…
Focus on completion, not results.
For my kids => focus on staying in the game, building good habits and playing well with others – it’s easy to peak a kid WAY too early in life.
I’m glad I saved my downhill slide for adulthood… 😉
For myself => Pay attention to what screws up tomorrow.
Increasing my hurdle to the point where I get hurt, burnt out or lose interest.
Creating a crisis so I skip the minimum.
Travel, late-nights
Now that I’m able to look back 30+ years, there isn’t any session, day, week or year that stands out. What made a difference was consistent positive action.
If you miss, or start to dread, the minimum then you’ve set the bar too high.
Two things I learned from watching kids and parents:
Less is OK, quitting is not.
(Just like us…) kids don’t know what they want.
Back to that cold pool, in the dark, before sunrise… well, sometimes the pool is warm, you’ve had a nice breakfast and you still don’t want to dive in….
How do you deal with that?
With myself, I focus on the result. To get the result, I need to accept what’s required.
What’s required? Action before dawn, or a lower daily target.
With our kids, sometimes we need a little bit of negotiation… we agree to “less” so long as we hit the minimum => of weekly swimming, or daily reading, or whatever our current focus area. With the minimum set at the 1,000-day level, we can maintain a streak without undue strain.
The idea here is to stay in the game, today, while creating an option to become great, later.
By the way, the road to greatness can be different than we imagined (see below).
I often hear athletes say, “I need an event to get out the door.”
Here’s the thing about anything… …for me to do it right, I am tempted to take risks with my health, my relationships and my future.
I’ve found this lesson applies to high-performance everything.
Along with diminishing returns, came increased risks.
As a young man, my one dimensional periods were a mixed bag – athletics, by far, the least harmful of my single-minded earthly pursuits.
A online physics course reminded me of the ways we get ourselves in trouble. I tried to explain this to a buddy and he replied, “there’s simply too much to worry about.”
I’ll give the explanation another shot.
Better thinking is not building the capacity to worry constantly, about more things. Better thinking is about training ourselves to focus on making a limited number of excellent choices, given imperfect information.
When to worry?
Where to focus?
Limits to Knowledge
Snowflakes: even if a human mind could know everything there is to know about water molecules, it would not be possible to predict a snowflake’s structure.
Mobs: understanding individuals, in isolation, tells us very little about the actions of mobs, or markets, or cities, or nations.
Lots of other examples: DNA to elephants; Neurons to consciousness; the patterns of a sandbar; the shape of a cloud, politics, wars, life sciences.
Clouds are a current favorite of mine – a reminder to stay humble with any bet that requires me to be correct about outcome.
I’m currently debt-free. As a result, I’m able to make more mistakes, be less correct and less impacted by outside factors. The value of this position doesn’t show up in conventional analysis.
Properties that emerge, at scale, make prediction impossible. Joe Norman’s presentation at RWRI helped open my eyes to this aspect of our reality.
I don’t need to become a complexity expert to apply this knowledge. What is essential is understanding the nature of the system in which we find ourselves.
Are we in a complex system?
Are we in a system subject to extreme events?
To answer my friend’s question, “when to worry?”
Complex systems, subject to extreme events… exposures here are worth the time to carefully consider.
You don’t need to be the CEO of AIG to get bitten on the butt by complexity. If you’ll get fired for the mistakes of one of your direct reports then, given enough time, you’re fired.
Sudden unemployment is one way the nature of universe can come home to roost. Happened to me in 90-days at the end of the last boom.
Here’s another… if you woke up and discovered an undisclosed $20 billion dollar loss in an important counterparty then what would that mean to your life?
What about your family, your employer and your portfolio?
Concentration is a risk we can mitigate. It’s why I have unrelated jobs and several cash flow sources. Here again, conventional analysis fails to capture the value of this position.
In 2021, in a very benign financial environment, we’ve seen multi-billion dollar losses pop up in a week, or less. Rapidly emerging, massive losses are a feature of our system.
Things, that have been stable for a very long time, can disappear quickly.
Prediction: our minds love to predict, to assign causation and to tell stories about the world around us.
Grasping for a “why” is a waste of time.
When operating in complex environments, most importantly when surprises can bite me in the butt, I need to constantly remind myself NOT to make predictions.
For myself, I actually need to go further, I need to implement a policy of NEVER making predictions and NOTING surprises. There is useful information contained in every surprise.
Even further, I shun input from individuals (especially smooth talkers) who make predictions. A reason why I try to never watch videos — too persuasive.
I’ve found that even a little prediction, it leads me down a path of wasting thought.
What’s likely to happen – what happens to me if the opposite happens?
What’s the worst that can happen – can I mitigate?
Does the situation appear reasonable – given the above
There are games, investments, relationships and opinions… I don’t need to play, make, engage or have
There are a lot of business where “the burden of the worst” falls outside of the beneficiary class (government, general partners, VC, private equity, OPM, CEO-class, banking).
We can waste a lot of energy railing against the system, I’ve found it much more useful to make sure I understand…
My family cannot afford to take the same risks as my employers, my shareholders and my government.
This is a lesson I learned through, rather expensive, experience when I left Private Equity.
Families…
No Prediction => focus on getting rid of ruin => subject to not becoming a casualty myself… education of youth “buys” more than portfolio returns, or my personal savings rate.
Conventional analysis fails to capture the present value of teaching how to avoid future mistakes.
Risks => practices that make sense for large entities, given time, will wipe out my family
So my point was…
There is more to reality than we are capable of comprehending.
Stable situations can become fragile at scale.
There are certain domains where acting “irrationally conservative” can make rational sense.
We are going to be surprised over, and over, and over, again.
Philosophically, one could say reality is pointing towards a deeper form of intelligence.
From a more linear point of view… the next time you are on an airplane, write a list of your concentrations and counterparty risks. Blow them up, one-by-one, and carefully consider if you need to mitigate.
I was going to take a break from posting but this topic gives me an opening to share something useful with you.
So here goes.
Sunrises
First, I know next to nothing about crypto.
Fortunately, my life has been set up to take into account that I am clueless about many things!
I think we can start by agreeing that crypto is volatile.
So I’d suggest you start by thinking deeply about how you, your significant other, your family and your coworkers tolerate volatility.
I don’t need to think deeply. My family abhors volatility. They get nervous about stuff we don’t own.
Personally, I tolerate volatility but tend to sell early. By way of example, I am absolutely certain that I would have sold Amazon 20+ years ago. Grateful I didn’t short it.
So, regardless of the fundamentals, I’m not a good fit for the asset.
About those fundamentals, I can’t see them.
I could learn about crypto but, while learning about an asset class that isn’t a good fit, I am not working on something else.
Let’s repeat that… while thinking about one thing, I am not thinking about another thing.
The opportunity cost of mis-directed thought.
Say I get there – I’m comfortable with the asset class, and I’ve gotten myself and my investment committee past the volatility issue.
Will it make a difference?
Buying, not buying, selling, not selling. Being right will not make a difference in my life.
The opportunity cost of incorrect focus. Big one.
Shades of green
If asset classes don’t make a difference then what does?
I was thinking about this on my run this morning. So let’s start with that… dropping fat, maintaining a stable weight, daily movement in nature, improved strength… big difference!
Since shifting my primary focus away from money, my body has had the opportunity to do a lot of cool stuff.
Trying to get more, of what I don’t need, can prevent me from getting something useful.
A flower
Leaving => I wrote about considering if an asset is a good fit for an owner. What about life?
Leaving makes a difference.. every single time I realize I have different values than my peers, I exit => patiently, quietly, doing a good job on the way out.
I need to watch this tendency. Making a habit of leaving is not going to take me where I’d like to go. Stay where I belong.
Building => Don’t look for easy money, build something.
I helped a friend build a business. Unfortunately, he lied to me and stole money from the investors. Interestingly, when the dust settled, that didn’t make a huge difference. If someone isn’t trustworthy then it’s better to know, as soon as possible. In the end, I learned a lot and walked away with 25-years living expenses.
Learning, while building capital => made a difference, up to a point of rapidly diminishing returns.
A reminder of my first kiss with my wife
As you age, I recommend you transition your focus from money to relationships. Because…
Family => marrying well, raising my children to be exceptionally kind and athletic… makes a huge difference, much more than spending the last ten years building wealth would have done.
Having the courage to change, so my kids’ values are a better fit with my own.
My smiling, lovable savages. You have my eyes…
We tend to over-value what we see.
We see crypto rocketing and we think it must be a good idea. It might be. Like I said, I know nothing about it.
But what we don’t see is often more important.
Thinking about that on my run… the decision “to not” has helped in ways I will never see.
Errors not made.
Not smoking, not using scheduled drugs, not taking sleeping pills, not giving into anger, not quitting…
1/. Will this make a difference?
2/. Will “not this” make a difference?
A useful filter on where to focus, and what to avoid.
Our oldest turns 13 this summer and our youngest turns 9. So we have ~5 years until our kids are fairly independent.
Additionally, I’m 52 => so I have 5-10 years until my next physical transition will begin. I noticed a shift at 45 yo and suspect I’ll see another in my late-50s.
Optimizing For Life
Peloton recently added heart rate tracking to their platform. As a result, I see how y’all are training when we’re on the same workout. 2-3 zones above me.
I want you to know there is HUGE upside from learning to train against your impulses – particularly your urge to maximize your numbers, any numbers!
At some point in the future, all we will care about is the CAPACITY to do fun stuff with friends, (grand)kids and spouses. Spending mojo to temporarily pop our 20-minute bests gives us nothing in our larger lives.
But it’s worse than wasting time. Focusing on athletic top-end generates fatigue that prevents us from creating something useful: relationships, career, a home or sub-max capacity.
What is sub-max capacity? I have two main constraints I place on myself:
No impact on my larger life.
Feed myself with real food (outside of training) and water (inside of training)
I spent my pandemic being very consistent and got my performance to 3 watts / kilo in my comfortable zone (<122 bpm, my HR max is low-170s). Good enough.
Push a bit and I can generate 900KJ in a hour. Much above that output I need to start adding sugar to my diet.
Pay attention to the habits that nudge you towards adding sugar (or alcohol, edibles, sleeping pills, pizza… you get the drift).
I have made a decision to LEAVE MYSELF NUTRITIONALLY UNDERTRAINED FOR SPORT. This is tough to do.
I used to be a Jedi-Master of oxidation and carbohydrate uptake. It’s tough not to use a key strength, especially as I really, really like to eat! 🙂
Why? Choosing a higher-sugar lifestyle does nothing for my health, life and body composition.
Also, enabling a higher-output lifestyle reduces the energy I have available for my strength training.
Strength Training
Since I turned 50, the bulk of my fatigue comes from strength training.
Three reasons…
Efficiency. Strength training is the best fatigue generator for minute invested – better than running, with no range-of-motion cost. I can keep my aerobics “good enough,” ride everyday and maintain my capacity to do fun stuff.
Invert! If I don’t challenge myself with strength training then a weaker future will happen sooner.
Error avoidance. If I challenge myself with strength training then the urge to “maximize the short” is held at bay. The “short” being short-duration and short-term.
Finally, if three hours of my week generates most my training fatigue that leaves a ton of time for working on key relationships, writing, reading => things that might be useful tomorrow.
Ask older friends, and the oldest members of your family, what they value (and what they lack).
Lifestyle
Choosing certain race goals implies certain training protocols.
Certain training protocols imply certain lifestyles.
Goal => Protocol => Lifestyle
Metabolic and work-rate training // beyond an hour, beyond comfortable tempo efforts… imply nutritional habits that prevent me from optimizing my health. Something to consider.
Related, look around at the causes for “things going wrong” => injuries, burnout, chronic fatigue… basically anything that causes us to lose consistency.
The Pandemic forced us to be reasonable. Sanity worked way better than I would have expected.
1/. Consider your 1,000-day protocol.
2/. Understand the lifestyle implied by your goals.
We decided to take advantage of the second-to-last week of daytime childcare (i.e. school) and do a quick couples trip.
Post-pandemic, I’m aiming for one adventure each month.
Vegas Pants…
Tuesday morning we caught a 7:30am flight out of Denver. Gaining an hour, we rolled out of Vegas by 10am and were hiking by 3pm.
At the Mesquite Dunes, M demonstrates the huge vertical of a top ultra-endurance athlete…
The idea was PM/AM hikes to get some overload in preparation for a September trip to the Grand Canyon.
In the background, Charcoal Kilns from way back.
Wildrose Peak, 2,200 vert, ~8 miles, trailhead (at ~7K) was 20F cooler than Stovepipe Wells, which was 102F.
A well-made trail climbs through Piñon Pine and Juniper
After the Wildrose Peak hike, it was time to get to the campsite.
From the 2WD lower trailhead, it is ~2 miles to the 4WD upper trailhead. I’d rented a Jeep and was grateful we didn’t have to haul our camping stuff up the road, or camp lower down.
In Colorado terms, it’s a good dirt. I would have felt OK giving it a shot in a Honda CR-V or a Subaru.
That said, the consequences of a double-flat, or torn oil pan are high… 60 miles to the nearest mechanic.
No water, but a clean toilet and 10 sitesUpgrade! Big Agnes, Copper Spur UL3
Arriving at the trailhead, we were surprised to see a couple sedans up there. I was grateful for 4Lo in the Jeep, a smooth drive up for us.
A rock had been placed in front. Unfortunately, an unlucky driver powered over the rock and dropped his low-clearance sedan onto the wooden spike.
One guy managed to tear open his gas tank, while backing up close to our campsite. It was 7pm. He declined an offer to get a message out via satellite communicator and decided to deal with the salvage operation the following day.
We had periodic cell reception on the high ridges – not enough for the web but good enough to send a couple pics/texts to our kids.
~13 miles round trip and 3,250 ft of climbing (3,000/250)
Telescope Peak is the highest point in the Park. The first two miles of the trail had a little exposure and the last mile to the summit is exposed to rockfall if parties are above you.
The prior day’s hike (Wildrose Peak) was mellow. Great trail with no exposure, or rockfall.
We started just before dawn, which was about as late as I’d recommend. Doing it again, I’d roll 75 minutes before sunrise.I did an online weather course this spring. It’s increased my appreciation of the world around me.
Fun fact, if you start from the Death Valley side then you can climb >10,000 vertical to the summit of Telescope. However, the route wasn’t clear and the valley is a reminder that, sometimes, nature wants to kill us.
Looking down, I could see water in the canyons, no idea on salt content.
A moderate section for an hour in the middle of the climb. The route switchbacks up, behind the looker’s left skyline coming down from the peak. This picture is taken from the west side of Bennett Peak, wonderfully cool in the morning.The dead Bristlecone Pines reminded me of The Tree of Woe from Conan the Barbarian – lots of signs of lightning activity on the Death Valley side of the trail.~11,000 at the topOn the way back down, I could have done with lighter options for sun protection.
We left the stranded motorist a spare gallon of water and crossed paths with a Ranger on our drive out.
Feel The Byrn 
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