Fear and Panic

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Yesterday, my local CostCo sold out of Charmin in 15 minutes.

My cognitive capacity is so lit up I can’t remember my daily calendar.

Stress makes us stupid.

So…

#1 – execute my strategy, made before the current crisis

One of the nice things about following a rebalancing strategy is you are very likely to have sold (a little) at the peak. My pre-crisis rebalancing happened January 4th and I sold enough to cushion the psychological impact of recent declines.

I rebalanced on Monday and again today.

Limit down opens => phew!

#2 – lean into fear

Since 2014, my portfolio assets have been 60/40 in equities/bonds. For the last six years, I’ve expected bonds to get hammered by rising rates. It didn’t happen. Been wrong the entire time but it didn’t hurt me.

For my long-term capital, I’d rather use a 90/10 strategy (90% in equities). The trouble is getting there. I have zero confidence in my ability to pick the right time to shift. So I created a re-weighting strategy based on VTSAX/SP500.

A simple rule: as the market moves from 20% down to 50% down, I will rebalance equities upwards from 60% to 90% of portfolio holdings.

Today’s rebalance moved me to 63/37. The 63 is held 42/21 VTSAX/VTIAX.

Simple to execute => each time, I rebalance I check the %age off the peak, if we’ve set a new low then adjust the equity weighting upwards. Otherwise, steady as she goes.

This simple strategy is not easy to do => either I want to rush more money in (FOMO) or hold money back (plain old fear).

#3 – real estate

When your neighbors are stocking up on TP in preparation for the end times… it’s generally not a good time to be selling real estate.

What about buying? Real estate prices respond much more slowly to feelings/sentiment. At the last downturn, local real estate didn’t “get cheap” until 18-24 months after the crisis.

I suspect we’re going to see the residential market stop dead for a few months.

After that? I have no idea.

#4 – family

My family has been watching me stock the house for three weeks. They were amused but now we are ready.

I’ve been reassuring the kids they are going to be OK. There’s a lot of fear around.

At school, our youngest heard that “old people” were dying. She took me to one side and asked if I was going to be ok => Yes, Sweetie, I’m going to make it.

That said, a finance background is useful for understanding the impact of compounding. Our state saw a 33% increase in positive tests today. Keep that going through the end Spring Break and we will have 4,200 positives in 16 days (from 44 at Noon today).

Notwithstanding an absence of positive tests in Boulder County, I’m going to start home schooling on Monday. A significant burden on myself but a small price to slow the spread.

#5 – community

Will Colorado’s experience follow Italy, Hong Kong or Taiwan? I don’t know.

What we know for certain is there will be a large, sudden burden on the lower end of our communities. Consider giving a sizable donation to your local food bank.

We also know we will save lives by staying away from each other.

#6 – immunity

Something simple, but not easy, for readers of this blog => cut your training in half.

Take your program, cut it in half and watch what happens with the infection rate in your state.

If your state is on a log-scale infection rate then it will become apparent far more quickly than any fitness loss.

Your immunity will get a boost from this change and you’ll preserve all the health benefits from exercise.

#7 – cash, debt and leverage

If you have an emergency fund then this would be a good time to make sure it is liquid. I have three-months expenses sitting in my checking account.

Not willing to lean into the market downturn? Consider using surplus cash to pay down debt.

If the downturn persists then do you know what can ruin you? There are many types of leverage => I’ve written about this a lot.

 

 

 

 

Habits and Happiness

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vail

Two recent reads: Atomic Habits and Willpower Doesn’t Work.

What I got from them…

Drive all knowledge inwards. This is a very old lesson. For best results, apply teachings on yourself first => do this for a very, very long time.

Many of the changes I have made (in the last five years) are in anticipation of being surrounded by high-energy teenagers and the conversations we are going to be having years from now.

When you are making positive changes, expect the people around you to get uncomfortable and test you. Don’t be surprised if the people closest to you start to bring up the errors of your past. When that happens I smile to myself, “They clearly have nothing recent to use. I’m making progress!”

Pay attention to the “why.” Many of us desire improved habits to cram more into our lives. More money, more beauty, more external success… chances are you have enough already.

Whenever I want to make a significant change in my life, I must create space, and mental bandwidth, to step outside my existing habits.

With three kids, some of the most valuable time in my life feels a lot like “empty” space, or even “wasted” space. I see the folly of this thinking by inverting and asking, “What does stress feel like?” => rushed, crowded, busy

What choices, am I repeating that, create stress? Social media, high-conflict people, cable news, an inability to say “no”…

What choice might create space?

What one thing, if it happened, could change everything?

Happiness is the gap between cravings. This gem is inside Atomic Habits. If you write a lot then sometimes you’ll spit out a deep truth.

Self-help doesn’t work because it teaches techniques we use to reinforce our cravings.

  1. How well do I know my cravings?
  2. Where are they likely to take me?
  3. What are the choices that reduce my cravings?

Using the techniques in the books to guide, or replace, cravings… very useful.

Understanding what’s driving my attraction to technology, social media… great stuff.

One example from my own life => connection and approval => I can get this, at a much deeper level, from a child than from Facebook.

+++

Widen the space between cravings => improved feelings of wellbeing

Use the books to cram more into my life => probably a reduction in space and reinforcement of cravings => no improvement in wellbeing

+++

Pay attention to what works.

  1. One win early
  2. Forests
  3. Routine
  4. Being slightly under-scheduled

Radical change might not be required.

A Gentle Reminder

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2020-02-29 12.19.17

A month ago, I was sitting at the dinner table and started chuckling to myself.

My son asked what was so funny and I replied, “I just realized how hooped you people are without me.”

2020-02-28 14.38.41

My kids have two main negotiating tactics: repetition and whining.

Our oldest (11), has a wider range of tactics and I encourage her to deploy them against me. It’s good practice for the real world. Unfortunately, she also has a habit of subjecting her siblings to random dominance displays.

So the song of disorder has three notes:

  1. Repetition
  2. Whining
  3. Dominance

The reason I was laughing at dinner was I finally figured out my kids had a really, really, really crappy negotiating position.

Further, this crappy position is going to stay bad for at least five more years.

Five years is beyond forever.

2020-02-29 12.19.43

That evening, I had been working on family taxes, while trying to schedule house cleaning, grocery shopping and some time for myself.

Combining everything, I decided it was time to gently remind my kids that the entire structure of their lives falls apart if they decide to take me on.

My opener had three notes:

  1. Endorphins – no electronics while driving
  2. Status – no visiting our ski club restaurant
  3. Fear – reduction in number of days skiing

I gave them the following message, individually:

  1. Your teachers and coaches tell me you are outstanding. I need you to bring your outside behavior into our house.
  2. If you want the best life in Colorado then I’m going to need you to make one change.

The change being “no blocking” for our oldest and “no yelling inside” for the other two.

One change to get your iPad back in the car.

One change to get my house more live-able for the next decade.

2020-02-28 12.20.20

We skipped our family ski day the last two weeks, drove home and the kids helped me clean the house top-to-bottom.

Cleaning was “totally separate from the noise in the house issue…”

My son is a bit of a “bro-cleaner.”

Bro-anything is when you do such a crappy job that you hope to get fired and don’t have to do it again.

Ladies beware, you’ve likely been “bro’d” before => childcare, meal prep, shopping and cleaning. Bro-zone!

Anyhow, we discovered we each have a niche we enjoy doing (spray bottles, vacuuming with music, floors, toilets).

Effectively saves me $75 per hour while training my kids to live on their own.

A bonus you might not have considered… in the currency of personal freedom, cleaning generates the single largest return on investment within my marriage.

Your ability to deploy this strategy is inversely related to the square footage you own. Another hidden cost of assets we think will make us happy.

What’s the job you can not do?

Your Life

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2020-02-22 07.55.12

Last May, I challenged myself to publish 50 blogs.

The process was triggered by an article encouraging me to embrace small failures. There is a little bit of risk associated with publishing, and risk makes me feel good.

I have a policy whereby I only publish if I’m ok with the article being the last thing on my site. This is a good email policy as well. I only publish/send something if I’m OK with it being my last interaction with you.

The final two goals were to leave a record of this period for my kids and find out if we (reader/writer) have overlap in our areas of interest.

The goals were useful, especially the practice with risk-taking.

2020-02-17 09.12.42

Two things were even more helpful.

#1 – document the key strategic decisions in my life. Do not trust your memory, or your ability to remember over time. Our memories are selective and self-serving.

#2 – talent, hard work, luck => their impact is real. However, the largest impact in your life is knowing what you want to achieve. Most people never compare their daily choices to their goals. Writing helps me get straight in my head.

Marriage => athletic wife, who is kind to me

Home Life => kids who respect my desire for harmony

Financial Life => simple, low cost, long term gain oriented, enables me to spend most of my life exercising in nature

Physical Life => able to do fun things with my wife and kids, separately

Each of these implies a certain “what to do.”

2020-02-15 10.46.50

I am bombarded daily by ideas about how to pack more into my life => my need is not more. I have plenty to do!

The “what to do” helps me prioritize => for example

  • an athletic wife implies supporting the athletic aspect of her life
  • harmony at home implies routine and adequate sleep for the kids (and using incentives for them to change disruptive behaviors)
  • financial life goals are a filter for eliminating ideas that will take time away from my real priority (of exploring the Rockies)
  • physical life goals get me lifting weights early in the morning – start every day with a win

The best filter I have is my early wake up. It encourages me to say “no” to a lot of attractive stuff.

Another “not to do” is overlaying “my” goals across my spouse. It is endlessly tempting to help her improve her life (by being more like me).

Finally, watch that your journalling doesn’t become a never-ending list for Santa, or your ego.

Your life only has to make sense to yourself.

Choose wisely.

How Wealth Endures

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2020-02-11 12.19.27

Over time, human nature does far more to address income inequality than the policies of your favorite politician.

Families that succeed across generations have certain traits we can learn from. While you can’t control your birth situation, there is a lot you can do to influence family wealth.

+++

My great-grandfather was one of the wealthiest men in Canada and I have an early memory of seeing him on the cover of Fortune magazine. Down my branch of the family, the magazine cover endured longer than his finances, which found their way back to society within two generations.

On the other side of my family tree, my great-great-grandfather was wealthy, but not cover-of-Fortune wealthy. A small amount of his money will eventually pass through to my children. I get a kick out of this as he was born in the mid-1880s.

Living rich is different than living well and it takes generations for this difference to become apparent.

2020-02-09 14.12.13

A favorite quote, “there has never been a more expensive time to be rich.”

Dropping this gem will likely get you a smirk and an eye roll from most young people. However, it touches on a truth of our time and provides a warning to wealthy families.

Over the last 40 years, a billion people have been lifted out of extreme poverty. Lifting the bottom of the wealth curve has impacted the top of the curve.

While we were lifting hundreds of millions out of poverty, “the rich” started to live differently. Morgan Housel’s article touches on these changes and reminded me of a valuable legacy from my great-grandfather (the one on the Fortune cover). A non-financial legacy that made it four-generations down my family tree.

Camping.

The fondest memories of my childhood happened at a YMCA summer camp. A camp largely unchanged from when my uncles attended 20 years before me.

40 years on, I ask myself:

Am I willing to constrain myself to get a better outcome for my children’s future selves?

Somewhere between childhood and adulthood, you may develop “requirements” that increase your baseline cost of living. Your “requirements” are your business. However, know that your luxuries will become your children’s baseline.

These cultural baselines have unintended consequences in family systems. The kids who can keep up with their spending aspirations have a greater risk of neglecting their families in favor of money. The kids who can’t keep up are more likely to reject you, to protect their self-identities.

I’ve known five generations of my family and have witnessed this pattern across each generational transition => the increasing spending of the ascendant, and the pain as the descendant fall out of their childhood demographic.

I believe there is a better way.

I’m going to offer three areas for you to consider.

I’ve made mistakes in each area. Having kids later in life (highly recommended), the main people who have had their values skewed by my errors are my wife, and myself.

+++

The three areas are vacations, housing and education.

Your first filter is to ask: Are we living well, or are we living rich?

To keep yourself honest, search for your reaction when other people live a certain way.

2020-02-09 10.39.37

VACATIONS

Cultivate interests that hedge your need for cash flow.

Camping, driving distance from home, has a very different long term cash flow impact than Surfing in Kauai, via private jet.

I’ve spent a small fortune trying to make family trips work (catamaran charters, seaplanes, traveling staff, ship’s captain with deckhand).

Everyone had a blast but what did I achieve?

I increased the hedonistic baseline for my wife, my kids and myself. Not a big deal to make a mistake. However, if I create a habit then what happens when three kids, and five grandkids, scale my choices across their lifetimes?

Simple, one-on-one trips in nature is where I focus these days.

We will come back to the scaling effect.

2020-02-09 07.54.22

HOUSING

Housing is the most consequential capital purchase most of us will make and it’s a tricky one because of the changes happening in many of the places where we grew up.

My wife and I went to high school in cities (Boulder/Vancouver) where many of the graduates are unlikely to be able to afford to live in their childhood homes. The winners of global wealth creation have bid up local real estate values.

My notional share of my great-great-grandfather’s estate is about $100,000. Money that would have proven very useful if I had chosen teaching, rather than finance, for my first career.

If you ask my seven-year old what type of house she’d like to live in then she’ll describe something that looks a lot like my grandparent’s homes: 1,500 sq ft per person, swimming pool, grounds… you name it. She’d put us into a 7,500 sq ft mansion with seven bathrooms.

She’s not alone. As soon I as I had the cash, I bought myself a monstrous house. Buying at the top of the market, I was lucky to avoid financial disaster.

Am I willing to constrain myself to get a better outcome for my children’s future selves?

Yes I am.

Coming out of the last recession, we downsized and bought two rental properties in our school district. I’m positioning the family to do a similar thing coming out of the next recession.

The kids were disappointed to learn that the next house was going to be smaller but I’ve been watching what they do, rather than their aspirations. When my kids can pick, they want all of us jammed into a bunk room => they love a seething, noisy mess!

Beware of the preferences of others and pay attention to where you are happiest, rather than what you think you should like.

What you don’t see when you “get the house” is the life you don’t lead as a result of living there. The time you don’t spend together, the energy spent managing a large asset you don’t need.

Once again, these lost opportunities for connection scale across time for your grown children and grandchildren.

2020-02-07 12.30.10

EDUCATION

Graduate debt-free with skills enabling you to get paid

This implies a few things:

  • working in high school, and for a long time thereafter
  • public education, as long as possible
  • parents who are willing to let you fail, experience poverty and learn from your own mistakes

Unless your family is exceptionally wealthy, or you are an outstanding student, you are going to be much better taking the bulk of your family’s education dollars and investing them over a 20-25 year time horizon. The goal being to enable your family to (continue to) live in a great public school zip code.

For example, the Boulder Valley School District isn’t (yet) priced out of reach. BVSD just built a school in the eastern part of the county and we have strong political support for local investment in education.

+++

Are you seeing how all of this fits together?

  • Moderation of spending, regardless of being able to afford it
  • A modest allocation in personal real estate assets
  • Over time, yields long-term capital within the family system
  • A focus on helping the family stay local and avoid shackling themselves with education loans
  • When graduating debt-free, young adults repeat the cycle

This works so long as everyone pays their own way, for the way they wish to live.

Collectively, the family system avoids subsidies towards personal consumption.

Each branch, and generation, of the family defines their values, and lives with the consequences of their choices.

=====

Further Reading

Athletic Beyond 45

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2020-02-02 13.12.35Middle age is going better than I expected.

Why?

Because choices that made sense when I was younger have been replaced by a lifestyle that’s a better fit for where I want to take myself.

Let’s run though the major adjustments.

+++

You might not want what you think you want: athletics is the best way I have found to keep myself engaged and apply energy. Look around and you can see plenty of examples of middle aged men getting themselves into trouble by not managing their energy.

So I will sign up for a race to keep myself out of trouble? Not so fast…

  • Engaging in athletic competition is different from being athletic.
  • Fit for competition is not fit for an engaged life with meaning.
  • To be the sort of father/husband I want to be, I need to avoid athletic competition.

The requirements of racing well, and my competitive peers, exert an inevitable pull on my life. A pull I enjoy but one that takes me away from where I want to be in 5-10 years time.

There are different ways to define excellence and the traits that ring most true to me don’t have a clock attached to them.

The most specific component of race fitness is the least valuable to my wife and kids. 

In your mid-40s you will notice a change in how you respond to training. Specifically, sustained tempo is a lot more fatiguing. This intensive-endurance pace is a core part of training for performance.

As a middle-aged athlete sustained tempo will gobble up your energy and leave you spent for other aspects of your life. If you are in the clutch of negative addictions then this can be a very good choice to make! However, you will have nothing left towards building a life that your future self will value.

This reality was tough for me to face. I know how valuable tempo training is to athletic performance. It was made easier by stopping racing, and reminding myself that I didn’t want the family lives, and marriages, of my competition.

Letting go of deep fatigue enabled me to re-establish consistency, which was being shot to pieces by minor injuries, slow recovery, illnesses and low motivation => all of which stemmed from giving myself more load than I could absorb.

+++

About those injuries… stop hurting yourself.

Somewhere in my recent past, I realized I was constantly managing low-grade calf injuries. At the time, I wasn’t training for a race, or even doing much mileage. There was no reason to endure the constant setbacks.

You’re likely to have similar moments and the performance gurus will encourage you to grind through. I’d encourage you to pause and ask yourself three questions:

  1. Where is this likely to take me? Elective orthopedic surgery?
  2. What is my goal here? Alienate my spouse and estrange myself from my kids?
  3. Is there a better way to achieve my goal? Or perhaps a better goal to achieve!

In my case, I replaced the running with hiking and functional strength training. I can do these before my family wakes up or alongside my family. My best athletic memories of my 50s are shared experiences, in nature, with my family.

With a young wife, and three kids, I’m slowly filling the state of Colorado with happy thoughts. When I’m 70, they can carry the backpack!

2020-02-06 19.03.33

Reality is enough for me. If you’re tempted to use drugs then something needs to change.

Shooting your knee up like an NFL lineman, boosting your hormonal profile to beat an athlete who’s spouse just walked out the door, taking health risks to train alongside college kids…

  1. Where is this likely to take me?
  2. What is my goal here?
  3. Is there a better way to achieve my goal?

A focus on athleticism puts me in a continual state of rehabilitation from the process of aging naturally => functional strength, quickness, range of motion and extensive endurance.

Being freed from external requirements lets me do the right thing for my health, year round.

  • Place a demand on yourself, then recover while working on a project that benefits your larger life.
  • While expanding your life beyond athletics, remove whatever screws up your sleep patterns. My 4:30am wake-up makes poor choices obvious, immediately.

This approach will enhance your biochemistry naturally and not mask errors.

To learn by iteration, it is essential to physically experience my mistakes.

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Victory and Vanity

How are you going to feed that part of your personality that craves recognition, thrives in adversity and wishes to dominate others?

Can you see your desires? Have you considered what is driving your desires?

You might simply be over-scheduled and seeking socially acceptable personal space.

It’s worth looking deeper.

When I looked deeply everything was there, positive and negative. There are many ways to spin our motivators.

Recognition can come from my children, who are hardwired to be impressed by me. I look pretty jacked to a seven-year old.

Personal growth through facing adversity can come from the final few reps of a set (or simply getting out of bed some mornings). My endurance mantra… many people would like the ability to do this right now.

Domination is a tricky one, especially when surrounded by women and children. At my best, I turn it inwards and seek to overcome my negative traits, specifically my urge to resort to force, rather than skillful engagement.

We often let each other off by saying things like.. “everyone is different”, or “you need to find your own way.” I disagree. We are very, very similar within our cultures and wired to follow social proof.

If you want to change your motivation then change your location.

I’m parked in the fittest zipcode in America, training in nature, with a young family, thinking daily about a handful of men who are presenting their best selves to the world.

Finally, remove the friction between your current habits and the life you want to lead.

I have a home gym, I wake up at 4:30am and there aren’t any email/social apps on my phone.

I created a situation where there was nothing for me to do between 5 and 6am in the morning.

So I write, or train => activities that leave me satisfied in hindsight and help my future self.

An Enduring Source of Happiness

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2020-01-28 09.37.55

Clayton Christensen died last week and he left us this article, which was written ten years before his death. His questions…

First, how can I be sure that I’ll be happy in my career? Second, how can I be sure that my relationships with my spouse and my family become an enduring source of happiness? Third, how can I be sure I’ll stay out of jail?

Articles, like Clay’s, encourage us to take positive actions to guide our life path. However, particularly when I was young, I had no idea about my future self.

Frankly, it was tough for me to understand myself in the present => ruled by passions and an energy I could neither understand nor control.

I had radically changed my life when I came across Clay’s article. These changes were heavily influenced by another HBR article, Managing Oneself, which I read annually. Combining the articles will give you more than applying them separately.

For me, it remains a whole lot easier to see “what not to do.” To see where I don’t belong and to consider where my repeated mistakes are likely to take me.

Every mistake, not addressed, will repeat and strengthen.

Via Negativa – defining a life with meaning by knowing what it is not => from 15 to 30 years old… my life was a case study of what not to do.

2020-01-26 16.46.55

Clay makes the point that you need to get going with creating your ethical anchor because, otherwise, you’ll get too “busy” to address the stuff that’s likely to wreck your life!

Career, family and self => here is a question I asked myself for 1,000 days around my 30th birthday…

If this behavior continues then where is it likely to take my career, my life and myself?

Initially, I was focused on other people’s shortcomings. What they were doing to me, and around me. Eventually, I started to look inward, at my own role.

2020-01-28 11.50.00

I was very fortunate to start my career in finance, a field where you can build capital in a relatively short time => 3-7 years learning the ropes => 3-7 years saving money, keeping my personal burn rate down and building the courage to leave.

In finance, winning is defined by making money and, looking back, the people that stand out were the ones unwilling to bend their ethics to make money. My first team was led by these sorts of people and I loved it.

What wasn’t working for me at the time was my personal life, which was filled with periodic alcohol abuse and consistent overeating.

I lacked a central anchor around which to make myself a better person => sport, religion, family, ethical work… there are many ways to “solve” this core need.

My firm, and friends, tolerated my personal shortcomings and tried to nudge me towards better behavior.

I smile remembering their nudges.

If you’ve tried to reason with a belligerent, and aggressive, person then you’ve probably discovered that polite nudging is ineffective.

What works better is time, and the inevitable smackdowns that life delivers to us all.

You might get fired, you might get really sick or injured, your firm might go bust, a close friend might die…

These painful episodes can provide an opportunity to reflect and ask, “Where are my choices likely to take me?”

By 31, the path ahead was becoming clear and it was likely to be filled with regret.

2020-01-28 10.39.11

In my early-30s I decided to spend a lot of time in places filled with people living in a way I wanted for myself => an outdoor life with friends.

I also found a central anchor, endurance sport, which provided a framework to address (some of) my personal shortcomings => binges were pushed into my offseason…

Turns out my “career” after finance wasn’t going to be elite sport. Two problems there. First, I wasn’t able to make much money! Second, another values misalignment with the concept of winning => we excuse awful behavior in our athletic champions.

My central pillar was going to become family, but not because it is fun. Rather because it is extremely difficult in a way that provides meaning and satisfaction.

My problems are an ideal fit for molding me into the person I want to be, forcing me to connect with others and providing me with an enduring source of satisfaction.

Getting yourself to the “right” set of problems can be more useful than solving everything coming across your plate. In my 20s, I was highly productive but not getting anything meaningful done!

Print the two articles out, make notes and take one positive action each day.

Where are my actions likely to take me?

 

Marriage Mindset

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Ax_Dad

I’ve found these helpful.

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At its core, what’s marriage?

Marriage is an agreement to never intentionally harm each other.

2020-01-19 13.25.31

I have a strange, and recurring, expectation => a desire to see my spouse happy doing things that I find difficult.

It is unreasonable to expect my spouse to be happy doing things I find difficult.

2020-01-20 10.27.15

Early in our relationship, I made a wise decision.

I gave up trying to teach my wife anything about nutrition.

I should have extended this attitude across a wider range of topics.

I didn’t marry for the opportunity to teach competency to my spouse.

I married for the opportunity to serve.

2020-01-20 13.52.58

Our children have two habits that cause problems in our house: (1) “accidentally” physically hurting each other; and (2) the use of biting “humor” to tweak each other.

Make a habit of avoiding unnecessary conflict.

Start by noticing, there is a lot of it, particularly internally.

2020-01-19 06.48.00

Winners want the ball.

To be fit for leadership, I need to figure out how to deal with this.

“This” being whatever happens to be upsetting me at the minute.

2020-01-20 13.30.57

I don’t need to “figure out” everything.

What I need to figure out is my reaction to the normal ups and downs of life!

I am absolutely certain, my future self will say I could have chilled out more.

Make a habit of yielding as much as possible.

Basic Week Parenting

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2020-01-12 09.45.34

When I was training seriously, I’d start most seasons with 13-weeks where I would “stay put and roll the week.” Having a simple, basic week is a powerful tool for getting stuff done and avoids the cost of variation.

The cost of variation is the energy required to consider alternatives, to choose and to negotiate for “space” for ourselves.

When you are at the limit of your ability, patience or capacity to recover => eliminating unnecessary variation (and associated conflicts) can be a big help. I’ve brought a similar approach to my family.

I’ll use my son’s schedule as an example, here’s what he’s doing November to April:

  • Monday – school/soccer
  • Tuesday – school/water polo
  • Wednesday – choir/school/jiujitsu
  • Thursday – school/swim lesson
  • Friday – school/go to mountains
  • Saturday – ski group/movie night
  • Sunday – family ski/back home

Every-single-morning, he’s going to read for 20 minutes before doing anything. He is usually reading by 6:31am.

Despite everyone “knowing” the schedule, we write it out and place it on the kitchen counter. This lets everyone have a look and get comfortable with the plan.

There is variety between the days, but little variation between the weeks. For example, I don’t need to worry about what we are going to do on a rainy February weekend.

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The bulk of my “life” fits into the time before my kids wake up, when they are at school and my “days off.” In the winter, many weeks, my wife handles the kids from end of school Thursday to Friday evening.

Bedtimes, my own included, are set so we can wake up and keep the week rolling. When we start to get run down bedtimes move earlier and earlier.

I give myself zero flexibility with my own wake-up time => “no excuses wake-up” eliminates energy spent on choice.

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Some principles we use.

Sleep, school work and healthy eating is our highest priority. Create the habits and energy to outperform.

Kids don’t know what they want. Our minds are hardwired to complain about every single change and variation => just look inside! Absent a repeating schedule, you are certain to have endless negotiations. Exhausting, when you don’t have energy to spare.

My kids want: love, to demonstrate competence and acceptance => the schedule needs to provide everyone with a chance to meet their basic human needs.

Clear ownership of responsibilities. Who is doing what? The kids are hardwired to compete for your time. Lay out the mommy/daddy times, make it equitable. With our preschoolers, showing them their “mommy days” was very important to reduce conflict and let mom see she was doing enough.

Keep it rolling at grade level. I do not care about the relative performance of my kids. I am most interested in identifying holes. If you have a future Rhodes scholar in the house then it will become apparent in its own time. However, if you miss the fact that your little one doesn’t know how to read then it will severely damage self-confidence, their attitude toward education and their capacity to teach themselves.

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My constraints are extremely useful as they keep me from over-doing-it. I have a track record of burying myself with fatigue.

My goal is to do what needs to be done, strengthen my marriage and have peace of mind => to know I am executing to the best of my ability, most days. I know what I want.

Because I witness my internal dialogue, I am constantly reminded of my shortcomings!

Meeting a reasonable basic week gives me an anchor and avoids the temptation to increase my expectations of myself.

Simplicity and repetition.

 

Diversity of Thought – Things we can’t imagine

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2020-01-05 14.39.11-1.jpgA popular theme in the media is handwringing about the divisive nature of political discussion. Everything would be much better “if we could just get along.”

I’m not sure.

Social systems tend to overshoot, overreact, over-everything. When we have widespread agreement (think totalitarian states) humans tend to drive the bus off the road.

Can you name an area where we have wide-spread agreement across the political spectrum?

I can.

Deficits, borrowing, bonding.

Left-right, north-south, east-west, up-down, local-state-national-continental => near total agreement on the benign nature of government debt.

Because disagreement limits the size of potential errors, total agreement worries me.

A surprise in my 2019 was my state’s voters not approving a change to our taxpayer’s bill of rights. It is the only constraint, on the ambitions of government, I noticed last year.

We should not expect government (or friends & family) to “do the right thing” in advance of a crisis. Human nature isn’t designed to work that way. An increase in our collective tolerance of regulation and taxation (ie pain) doesn’t happen until after a crisis.

Our collective problems won’t be addressed until after they blow up.

My individual risks, however, can be addressed right now.

A collective belief in the benign nature of debt is self-reinforcing. While the debt cycle expands, asset values are inflated, consumption is pulled forward and economic growth is nudged upwards. Because of its ability to feed on itself, debt expansion can continue for a very long time, particularly with interest rates near zero. Ultra-low rates enable lenders to fool themselves about the credit quality of the marginal borrower.

What to do?

Life is not filled with only bad news! Am I able to take advantage of unexpected positive surprises?

It’s counterintuitive but I’m positioning myself to borrow a lot of money. My 2020 project is creating an option to borrowing 30-years fixed at an interest rate that none of us can currently imagine.

How might unexpected negative surprises wipe me out?

Consider who is getting out of hand with their current borrowings. What’s the credit quality of… your employer? your family? your largest customers? your local/state/national government?

Do you work for a high-leveraged company, in a state with massive unfunded pension liabilities, while rolling your credit card balance each month?

Hidden liabilities lie (mostly) hidden. Ponzi schemes, unfunded retirement benefits, promises for future spending, fixed price contracts… think about your life. Where do you have exposure to a single person, CEO, manager, employee, fund, investment? In an easy-money environment, it is possible to hide significant liabilities.

Things we can’t imagine are likely to be underpriced.

Kinda tough to imagine the unimaginable! What seems impossible to imagine? Inflation, interest rates at historical norms, rapid nominal growth, credit crisis in a large sovereign, large hot-war…

For me, the goal is not to predict the outcome. My main goal is to protect my lifestyle from shocks and surprises.

To make it real, I ask, “what could blow up ski season?” Health, injuries, illness => my current risks are more human, than financial. Think beyond the money.

To focus on new ideas requires us to reduce the noise in our lives. Are you engaging in a policy of constant distraction?

There is a lot we can do to manage our exposure to the errors of others. Bad companies, bad relationships, bad government… many of us have the ability to pack up and leave. I’ve lived and worked in eight different countries, on three continents. Gradually working towards a situation where the main person who can hurt me is myself!

As a young man, I spent many years exposed to the errors of a single individual (my bosses and my business partners). More common is exposure to the errors of a single corporation.

With preparation, you can benefit in times of stress, but first you must survive.