In March 2020 I increased equity allocations to 72% of my Vanguard portfolio.
Allocating additional capital in 2022, I made a reserve for “an investment that benefits the present”…
…then rebalanced to 60% equity allocation.
This reduced the size of the new investment and got me past decision paralysis, driven by a fear of near-term loss.
The reserve now sits at ~15 years Core Cost of Living.
Looking pro
We’ve been looking around for a place in the mountains.
Coming off a year of AirBnB skiing, I know our cost to rent implies a gross yield of 0.75 – 1.75%.
Alternatives to buying:
Stick the Strategic Reserve into VTSAX, rent through AirBnB and let dividend growth hedge rental inflation
Stick the Strategic Reserve into a medium term bond product (VBTLX @ 3%) and earn a margin over my cost to rent
Pursue either of the above, double my discretionary spending and run the capital down between now and my wife’s 85th birthday
For now, I’m taking Door #4
Rebalance after large (down) moves
Watch the Federal Reserve increase rates
See what happens
A 35% market decline implies a dividend yield over 2.25%, which would let me lock in the equivalent of three-months cost of living (after tax, forever).
I tossed my idea of buying a Sprinter Van for camping. The shift towards “assets for fun” doesn’t come naturally.
Consider if you have the muscle mass to achieve your goals
Build your capacity for One Big Slow Day
Another way to think about recovery is to invert – give yourself a protocol that you will enjoy regardless of outcome – lack of enjoyment is a sign your approach is unsustainable.
Injury and illness are socially-acceptable ways to manifest a lack of enjoyment.
Work, school, sport… bad luck is less random than it appears.
The best thing I learned about protocol was taught to me by a doctor friend:
Gordo, we don’t heal people. People heal themselves.
The magic isn’t in the protocol, supplement or dogma…
The magic ingredient is YOU!
Step back from all the noise about protocols.
How might we create a lifetime of winning?
Consistency
Enjoyment
Focus there.
What do we see in every successful person?
Practice often
Devote time
Learn skills
Focus there.
I’ve been reading the literature around SuperElite performance. It gets me fired-up to “practice often, devote time & learn skills” 🙂
However… it strikes me as a lot of narrative wrapped around the complex system of human performance.
The literature lacks self-awareness… despite what you see in the media, you probably do not want to be a Super Elite. I wouldn’t wish it on anyone.
Not our situation to solve.
For the rest of us!
The mental side is what’s going limit.
While we are consistently enjoying the journey…
do work
take correction
Parents, allocating TIME to have fun while you MODEL these skills is one of the best gifts you can give your kids.
I doesn’t need to be you (but your kids really want you involved).
Teach your kids to be the best version of themselves.
Not better than the rest, I hope you are the best YOU can be
At the closing, my agent (50-ish) shared that the only recession he’d really experienced was 2008/2009. So the next chart is his personal experience with asset pricing.
Right hand corner blip looks a little bigger
The above chart is ~20-years of mortgage rate history. If you’re 40-something this is what you lived.
At 53, my life is changing. The window of what I need to finance is less and less. I have begun a strategic shift towards creating the life I want to live in my 60s.
Real Estate is lumpy, we don’t have the ability to incrementally rebalance. I wanted to reduce exposure before making any additional purchases.
The sale was valued at 43 years gross rental income (2.3%). Cash proceeds, after tax, were 64 years net rental income (1.6%).
Institutional Memory is 1,000 days, max. Here’s the last 1,000 days in the mortgage market.
The real estate market is like a super tanker, it takes a long time for momentum to shift. After the 2008/2009 recession, non-foreclosure prices didn’t adjust until the middle of 2010.
Prices move at the margin => the marginal buyer had a strong tailwind through the pandemic, that has changed in 2022.
There will be an impact of the near-vertical move in rates this year => initially, we will see this in markets that require loans to complete.
The scale of “the impact” is unknowable and complicated by supply shortages of re-sale houses and for new build.
Prices are being supported by rapidly rising cost-to-build and cost to renovate/remodel.
Lots going on – I can make a case for +25% and -25%.
At 53, taking 64 years-equivalent cash-flow off the table, in a rising rate environment, is a decision I’ll be able to live with regardless of future outcome.
I felt deep satisfaction seeing an athlete improve on a protocol that was taught to me. Fun to be part of a lineage that extends backwards, and forwards, in time.
A personal confession, there is a twinge of sadness when I read the document. Sadness because I had the passion to do the work, but lacked the courage to recover.
I will teach this to my children, and offer it to you.
Recovery is what truly scares the highly motivated.
Kids have a capacity, and desire, to get very strong at a young age
Where does it all begin?
Skeletal muscle mass – do you have enough muscle to generate the aerobic power for your goals?
Let’s be clear what I’m really talking about => self-starvation risks your ability to be an exceptional athlete.
I lift weights to have aerobic capacity for many tomorrows.
The foundation of wherever you want to take yourself is skeletal muscle mass – very important to get this message through to girls & boys.
Youngsters – ride the natural build up
Oldsters – preserve, and hopefully, build upon your current position
A long slow day to the top of Mt Huron (14,005 ft)
The value of a long slow day
I’m extremely consistent with my aerobic training.
My consistency has resulted in great health, but it has not translated to superior metabolic fitness.
Consistent, moderate aerobic exercise doesn’t translate to superior metabolic fitness.
I do wish it was otherwise!
My lack of metabolic fitness doesn’t impact my body composition, or my life. See my article on training middle aged docs.
Looking forward, metabolics might be a limiter.
Here’s the progression:
At first, moving around all day is tough enough
Next, noodling around, at any speed, for 4-6 hours, is tough enough
Then, maybe we add some jogging, or combine with some cycling
Then, we try to keep easy, constant pressure on our long session
The first time I did 1 to 4… it took me ~5 years
Slow ramp of load.
Know where you are trying to go.
NVDP was seeking to break the world record for a 10K skate.
I’d like the option to do expeditions with my 15-18 yo son.
The concept of 5s pops up in NVDP’s plan.
5 Days On, 2 Days Off
5x >5,000 kj on the bike
5 days of mind-blowing threshold sessions
The toughest expedition I can imagine can be structured as:
(5x) One Day On, One Day Off => ~5 big days in a two-week block
Thankfully, I don’t need to string 5 days together, like a world champion.
All I need to do is build the capacity to do One Big Slow Day, Rest then repeat.
This was the key lesson of my 20s: the capacity to do one big slow day changed my life.
This series has been about learning from those without financial limits:
Who do they share their best moments with?
What are those moments?
Are we missing out?
Once I’m on the inside of the team, I notice that my risk preference is the lowest in the group. Frankly, not surprising when you are rolling alongside extreme skiers and mountaineers.
Here’s something about risk. Group risk rises to the level of the MOST risk tolerant member.
Anyhow, with two young kids and a pregnant wife, I had learned what I could and wanted to put more time into my young family.
So I opted out.
My boss…
>You firing me?
>>No, most definitely not. There is no way I will be able to repay you for what you taught me.
…and off I went for a decade.
Once again on the road less travelled.
Not over, yet – most of them took up Skimo.
😉
Let’s recap:
Best Days are defined by shared outdoor experiences with a small number of close friends – building memories that last
Peers & Teachers have a mix of kindness and competitiveness => notice this combination when you see it. These are people who tell us the truth, push us to do better and keep us grounded.
There’s nowhere to get to => I realized that between my wife, and my kids, I could create my own inner circle. A circle where we share Best Days and reduce our collective risk of ruin.
I remain grateful for the opportunity for a look behind the curtain.
G – Literally Just listened to your catalyst podcast – excellent!!!! Wow, truly good – thank you for putting that out there. I took 8 pages of notes and I have already read your writing for decades
Feel The Byrn 
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