Valuable Options


Record prices, driven by easy credit, in a time of impaired fundamentals. I see this phenomenon happening all around us.

In times of uncertainty, I like to focus on maintaining:

  • The ability to change my mind
  • The ability to cut my cost of living
  • The ability to reallocate my capital

Holding onto these options requires careful, continual effort. For example, it’s easy to join a “tribe” with fixed views, or publish blogs (!), thereby making it much more difficult to change my mind later.

I try to be careful with what I write, say and think. An interesting tip I came across this year about knowledge…

Be wary of using current knowledge as a belief system.

I first heard this advice via the son of a surgeon. When the son finished his surgical training, the father shared that half of what he learned in med-school proved to be incorrect over the years that followed.


With capital allocation…

When I buy, I lose the option to “buy later” and create switching costs if I want to change my mind.

  • The ability to decide later
  • The size of my switching costs
  • The liquidity of my position
  • The impact on my debt capacity

The future value of the above is difficult to estimate, therefore, our minds tend to latch on to the perceived value of an immediate purchase.

We always underestimate the value of options.


Caution with your allocations at cyclical highs…

At the end of last year, I wrote about real estate in Vanity Markets, the key thing I liked about renting was the ability to change my mind later. The option to change direction became much more valuable during COVID.

A real-world example, we’re going to change the way we approach ski season.

  • We are not changing because I think I know what will happen.
  • We are changing to remove (some of) COVID’s ability to screw up our lives.

I wrote off a lot of money this year due to the virus. More importantly, COVID has been a continual drain on my time and emotion.

Money, time, emotion => you can earn the money back.

The time and emotion are gone for good.


So… we made a decision to ski local.

The savings are material: ski club, driving, ski passes, lockers and seasonal rental => my budget is 5% of last season’s actuals.

Besides saving money “now”, I get the psychic benefit of looking forward to adding back a “better experience” once COVID settles down. I’ve been watching myself for many years and looking forward to an experience is a key part of my enjoyment.

The ability to painlessly change my mind arose because I didn’t buy previously. I stayed variable in my discretionary cost of living. I followed this rule of thumb… Never capitalize luxury spending.

Longer version of the same advice… until your retirement is fully funded, focus on income producing assets (not ramping up current consumption).


There are other benefits.

  • By “going local” I give myself an incentive to teach my kids to uphill ski and camp on snow.
  • Knowing that I am saving (a lot of) money in one part of my life, reduces financial stress across all other areas of my life.
  • I also have a way to fill weekday afternoons, which have been challenging during online school: Morning school, Dad ski, Evening school, Bed. Do that Tuesday/Thursday and I give myself a mental respite from trying to fill the Noon-4pm slot.


A quick update on online school. My zip code contains several thousand CU Students, and all the frats!

Our positives are trending up, again. From Saturday’s paper…


and they aren’t testing students who live off-campus

I’m living in the hottest “COVID zip code” in Colorado right now. That said, if you were going to infect a bunch of Coloradans… we’re a healthy cohort! ūüėČ

Because we were cautious “opening up” our bubble, there isn’t much change for us. The main challenge is we are in Week 26 of Home School.

It can be tempting to toss money (and other people’s time) at my “problems.”

During the pandemic, tossing my kids into the private education channel could reduce my short-term pain – if the angel of COVID flies past their new school without creating an outbreak.

However, one thing I’ve learned from six months of home school – the academic demands are easily managed by a policy of a-little-bit-a-day. The real challenge lies in the emotional demands of being around kids all day!

Similar to the ski example, I frame home school as paying myself to figure it out. I did private school math a few years ago. It would cost me significant time, and emotion, to earn the money for the private channel.

I’ll end today with the two best things I have learned about problems:

#1 => My “problems” will NEVER disappear => my mind simply focuses on something else. It’s my focus, not my problems.

#2 => I had better accept that I’m going to be chipping away at stuff daily, for the duration. While I’m chipping away, keep in mind the true goal is “better problems.”

Figuring out how to enjoy spending time with my kids is a great problem to have.


48-hour storm rolled through the state. Good news for our firefighters.

Corona Diary 24 July 2020

Homie giving me Five after dropping me on my last hill repeat… No Waiting, No Whining, No Mercy!

Our school district asked us to confirm our plan for the start of the year so we officially decided to start with online-only and watch what happens when the 6,000 college kids return to our zip code.

Our oldest started doing Peloton yoga workouts and we agreed to get her a set of bike shoes. She also downloaded Duolingo and started with Spanish. Our two youngest started with Spanish School Bus.

A family friend has been using this site to find tutors: https://www.wyzant.com/ => we’re going to roll a few weeks of online school and try to fill gaps with local teachers.

Another family friend was threatened with termination if they didn’t return to full-time teaching => private school, not our public district.

Tying Federal funding to reopening schools creates the opposite incentive to what our nation needs. It’s a similar screw up to the delay with Federal guidelines for wearing a mask. We should leave decisions to local authorities with guidance from state health departments.


From my son to all the teachers out there!

The last week has let us see the domestic consequences of the Global War on Terror => two decades of the militarization of our society.

Bush 43 set up the DHS to protect us from foreign threats. ~18 years later, Trump is using the DHS as his personal militia (the words of Tom Ridge, hardly a snowflake).

The Federal goon squad was filmed using pepper spray and breaking the hand of a Navy Vet, Chris David, who was exercising his constitutional right to verbally remind the goons of their oath to protect the constitution. The video pissed me off – military-style uniforms, kicking the crap out of citizens.

I doubt Colorado has much to worry about – we have a Republican senator up for re-election and I have a hunch we will see a Blue-State bias wherever the goons appear.


If you want your kids to like what you like then “be the brand.” When they dip their toe with you, treat them with patience, and only use positive feedback. PS – they don’t seem to mind when I teach PE. ūüėČ

Good news at our state level, hospitalizations ticked downwards. Positives still rolling at a similar level.

Less good news was this quote paraphrasing what my Medical Mentor told me back in March => there are places that have had their cases and places that will have their cases.

In other words, local communities don’t respond until they have experienced local pain. The story of my own life, for sure. No lesson is truly learned until I experience negative feedback, myself.

Our State health authority has been promoting DVD – distance ventilation duration – to help us consider risk.

Our Governor made last call for alcohol 10pm for 30 days – read a quip this was because the virus was nocturnal. My view is this change gives an incentive to stock up and head back to a private residence.

Saw another observation => we are arguing about reopening bars/restaurants/etc… at a time when we can’t open all our schools. This rang true.

There is a lack of national leadership on setting priorities for reopening and using red/green zones. I heard this week that our military is using red/green zones internally. It would be straightforward for the Feds to make the system public. I did start to see some Federal guidance on this yesterday with our President standing in front of a hotspot map of the country.

Masks are swinging into national favor – Red State hotspots, Republican business interests, swing state polls, a return to record death rates… have had an impact on public opinion. We still have a ways to go on public action.

A lot of the negative commentary, nationwide, implies the governors are enjoying placing restrictions on people. Folks should think through that point of view – no politician wants to make voters unhappy. They’re each doing their best. They’re doing it differently but that’s OK. We should pay attention to what works, we probably have enough evidence for what doesn’t work.

A friend tried to rope me into a discussion at the edge. I didn’t fall for it. Speak to the middle.

The middle is going to lead us out of this mess.


Best quote of the week => denial is more expensive than facing reality. Prof G used it to point out our university systems are engaged in magical thinking.

Like I said yesterday, trust that people can handle the truth.

Here’s another one – when you’re unsure, bias error towards safety. It’s what we’re doing with our kids and our personal choices.

Final one via John Mauldin – whenever possible choose small, and local => it’s the large entities that are getting the support right now.


Grandpa G at 51 => “get over here, you’ll want this picture when I’m gone”

Final thought, my brain doesn’t seem to notice that all my bike pals are behind a screen. I do a lot of riding with imaginary friends and feel close to them.

Weird, but comforting at this time.

Showing My Work on Back To School

I know many parents are facing the same decision as our family.

Background – my main job for the next 18 months is stay healthy, love my family and educate my kids. When COVID clears up, I can sort everything else.

Location – we live a half mile away from CU Boulder. The university administration will shortly welcome back 30,000+ students, during a global pandemic. ~40% of those kids come from out of state. ~6,000 students live in our zipcode.

Community Transmission – it’s been rolling all summer.


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

Our positives have moved from our at-risk population to our younger residents. There’s plenty of hospital capacity.


same source as above, orange is long-term care facilities

Testing has been coming back 96% negative since the start of June. This is great news as our actions are misaligned with our words. With social distancing and masks, we talk a better game than we are executing. Collectively, we are not acting like COVID is a serious situation.

Taking all of above together, our district will be reopening in late-August with a hybrid model. For the full details go HERE and click “Level Three.”

Basically, every Monday off and the other four days are split between at-home (2 days) and at-school (2 days). Kids will be placed in cohorts to reduce mingling and staff will limit their interactions with the cohorts.

Positive test results will trigger 14-day at-home periods by cohort, or school, to be determined.

Testing expected to be offered to staff on a 14-day basis, aiming for 2-day turnaround.

Paywall article in our local paper.


We have a great school district by the way => lots of smart, dedicated adults and kids.

Here is an extract from a note I sent the head of the School Board…

With 30,000+ CU kids returning, and testing on a 14-day cycle, I don’t see how we catch the outbreaks early. Off-campus transmission, in the 20-something age group, seems likely to lift the City of Boulder community spread. We might not see that in the numbers until after Labor Day. Denver’s decision to combine a delay with two-weeks online makes sense for City of Boulder schools. This is an observation, not a criticism of the Phase 3 reopening plan.

Cohorts make sense to me.¬†It wasn’t clear to me if cohorts, or schools, were going to be moved to online-only after a confirmed positive. With each confirmed positive, please consider shutting the whole school for 14-days.¬†Shutting schools will be an inconvenience early in the year but you will find out quickly if you avoided a much larger outbreak. I see avoiding large outbreaks as fundamental for keeping the¬†BVSD in-person system operating.

As a family, we greatly appreciate the option to start online with our neighborhood school. We’re going to start online:¬†(a) to reduce in-person class sizes and let teachers focus on the kids who have fallen behind;¬†(b) to support teachers, who wish to work online-only; and¬†(c) to eliminate the risk of disruption from rolling closures, which appear inevitable.


We’re going to wait until the end of the summer to make our final decision.

Our local situation is fluid and the district might be forced by external circumstances to change their plans.

Personally, I want to pull back the time that COVID took away from me. Going in-and-out of school openings/closings will cause more hassle than the benefit we get from sending kids back for a couple in-class days each week.

Most importantly, I have a guiding principle… if ruin is avoidable then avoid it. If I get sick, even mildly, it is a large hassle for my family. If I die, or get long-term disabled, then it’s a disaster for them.

The district is offering me a option to reduce my risk of ruin. My premium is foregoing two-days a week of in-class instruction. Properly framed, their offer is very attractive.

Their offer is online support four days a week, that’s a big increase from our summer school plan where we had to organize everything. In the “time of COVID,” the online-only offer is good enough to meet my objectives for my kids, while helping me work towards a personal goal of “get sick later”.

My kid objectives are easily achieved within the framework of online school.

  • Girl, nearly 8, going into Grade Two => reading, spelling and intro to times tables
  • Boy, 9, going into Grade Four => just keep him ticking over, Summer School got him where he needs to be for post-COVID (hopefully) Grade Five
  • Girl, nearly 12, going into Grade Six => #1 stay busy! Home school without outside support doesn’t work for her, or me. Continue with essay skills, start Grade Seven math, intro to basic sciences.

Overall, I’m brainstorming at-home modules the kids can do.

#1 // Each kid picks a scientist and teaches the family about them — create a huge white board about the person and dress up (as the person) for the presentation. If this goes well then pick a country and do the same. That gets me to Halloween (or beyond) and I can figure out 2021 later.

#2 // Duolingo for kids on iPad. We’ve had a couple false starts with Spanish as an after-school activity. A little bit each day might enable the (very) basics to get into their heads.

#3 // Teach the kids to uphill, and nordic, ski. Dropping the significant costs associated with resort skiing (especially seasonal accommodation) is a simple way to create space in the family budget for extracurriculars and supplemental schooling.

#4 // Create a board game the family can play.


The kids have told my wife that it’s OK for me to be the Home School principal but they don’t want me teaching!

I’ve always been respected for my project management skills.

People skills, less so.

Home School Stuff

Top of Hogback Loop, Boulder, Colorado


Science Wednesday was Plastic Milk – the girls weren’t interested and opted out – Axel enjoyed the session.

We’re going to take a break from experiments for a week and build ourselves a Volcano!


Eating the “plastic” was a highlight for him.

Workout Thursday saw Axel do more in 20-minutes than I can do in 25-minutes.



It’s a pattern you can do at home: (a) sandbag getup and run to the next room, repeat 4x; then 20 squat jumps (step down, never jump backwards) => keep rolling continuous.

Body slammed himself on the bench on the final rep of his 9th round (180 jumps total).

True savagery – once we were sure he hadn’t cracked a rib, we shared a laugh.



My daughter and I have been butting heads with her math.

This must happen to other families so I’ll share the workaround we discovered.

Like their Dad, my kids are good at pretending they understand when they have absolutely no frickin’ clue!

As you can see from the world around you, being clueless isn’t usually a problem. However, it is a suboptimal method to learn new math concepts via Zoom call.

In a typical school, the learning rate is slow enough that most of the kids figure things out on their own. At the Byrn Family Academy of Personal Excellence, we’ve been learning at a faster rate.

I didn’t realize how much faster until I noticed our youngest was nearly finished Unit Three of next year’s math. Five weeks to do half a year’s math curriculum => keeping things in perspective, it’s Grade Two and I give the kids supplemental lessons when they ask me about concepts. We’re not blazing AP Calculus but the pace for our Grade Four and Grade Six is legit.

With the new concepts, our oldest was reprinting the assignments on a clean sheet and handing in 100% correct work. Behind the scenes, I had been subjected to a half hour of tears and abuse => “Sweetie, it’s math, our opinions don’t change the answer.”

Anyhow, we both got sick of the struggle. She has no interest in receiving lessons from me => “Just tell me the answer, Dad!”

Not being able to teach is frustrating because I’m a great teacher! However, the goal is for student to learn, not the teacher to teach!

Family Value => It is OK to say “no.”

On the basis of “relationship before all else,” I resigned.

My resignation resulted in more tears. She’d rather struggle through with me than admit she doesn’t understand with her teacher.

So, we struck a truce…

  • Side by side, we review
  • When I find an error, she works through again
  • We arrive at the step that’s causing problems
  • Chip away until she gets it right

So far, no more tears and I don’t feel an ulcer coming on.


PE with Dad. Ax-man has 5L of water on the his back. Mountain Lion country (notice the bushes above, right). I had to tell him to stop dropping us!

Axel finished The Everest Trilogy by Korman.

He loved it and he’s going to do a book review with his English teacher.


My next summer essay is on the life cycle of an athlete.

Stage One is the Sporty Kid.

  • It is easier to have sporty kids if you lead the way.
  • Sporty kids have more energy for everything, ie learning.
  • If you want to develop sporty kids then the program is about their current ability level – not your workout goals (train daily before they wake up).
  • Use outside experts to teach technical skills.
  • Focus on enjoyment of the “doing” – resist the urge to teach.
  • Only positive feedback.
  • Focus on activities without a score and no judges.

#RWRI Thoughts on the business model and cleaned up notes

RWRI has a fantastic business model.

  1. Make the faculty your friends and investment committee
  2. Get paid to meet for a week each trimester // you have a no-cost central office, you are getting paid to bring your international (virtual) business together for a week
  3. Record your talks to capture new ideas, spontaneous content
  4. Train the students who will take your work forward when you are gone
  5. Receive feedback about how your work is being used in the world
  6. Up-sell your most passionate (book) customers => Robbins model
  7. Create an environment where you expand your network with people likely to engage and help you => HUGE self-selection bias in student population
  8. Invite world-class speakers in areas where you’d like to learn

This business works well for its owners and they are (more than) smart enough to see that.

Keep it small, sell out each meeting, avoid the temptation to expand and remember why you started.

I cleaned up my handwritten notes via the creation of a Google Doc.

Mistakes remain my own.

Kids Don’t Lie

2019-07-09 10.57.59A segment of our local community is dealing with the fallout from treating child abuse as an internal issue – rather than seeking assistance from local law enforcement.

I have been bumping into this story for over thirty-five years.

There is never just one incident. 

+++

Years ago, I attended a child abuse prevention workshop.

Remember…

Kids don’t lie – in over¬†20 years, my teacher had instructed 100,000 kids. Out of the 400 reports received, none were false.

20 years, 100,000 child interactions, 400 reports, zero false positives.

The perpetrator will have primed your child that you will be angry and not believe them. The most likely perpetrator is a male you know.

Have a no secret policy in your home – predators use secrets against our kids – let the kids know that kisses and touches should never have to be kept secret.

It is awkward to live an open life. Awkward is better than creating a culture of secrecy exploited by evil people.

Create a support network Рhave your kids name five people they know and trust (ideally women) Рdiscuss places in their neighborhood where they feel safe.

When I’m walking around town, I’ll ask my kids… “Show me a safe person.” “Why is that person safe?”

Teach your kids that adult authority should never go unqualified => even your own!

Teach your kids… If you feel uncomfortable then:

  • Leave
  • Tell
  • Get Help

As a parent, the most important thing you can say is “I Believe You.” I say this a lot, I will “believe” somewhat ridiculous things.

People that commit evil deeds are hoping you will look away.

Be Brave.

 

Supporting Public Education

In my community, many families opt out of the public school system. Public schools are better with all our kids attending. We’d love to have you opt back and join us.

Three kids imply $100,000 per annum, pre tax, in the private system. Three million dollars of future value when my wife reaches retirement age.

For a whole lot less, consider…

Volunteer in the district ‚ÄĒ I started by helping in the classroom but realized my skill set was most useful at the district level. Monica rotates between our kids’ classrooms on a weekly basis. If you want better treatment then give.

Hire public school teachers to tutor – the single best investment you can make for your kid – you will be amazed at the benefit one session per week brings to your child.

Join education.com // it’s a no-brainer and gives you access to worksheets you can do with your kids.

Smarter application of family finances:

  • childcare to support your marriage and the young adults that work for you
  • after school activities because fit kids have greater capacity to learn
  • swap money for time¬†and use the time to make yourself¬†a better person
  • live walking distance to a great public school, kill your kids‚Äô commute and be a hub of goodness in your community

I often catch myself fixating on external problems that distract me from taking action on what I control.

Choose wisely where you invest time, money and emotion.

A Million Dollars of Education

What first got my attention on education was realizing that a month of my daughter’s pre-school was costing more than a semester of my finance degree at McGill University.¬†Digging a little deeper, the long-term cost of education blew me away when I ran the numbers.

Like most parents, we believe our daughter is a gifted genius and we want the best for her. Since I’m the CFO of my family, I’ve been approached to share my thoughts on private education.

What’s the default option with private education?

  • We want the best for our kids
  • Private education costs more so it must be better
  • I can afford it, today
  • Therefore, let’s start down the path

Duscussing education with parents I see the full range of human misjudgement. We all want our kids to succeed so our most-human tendencies manifest. I won’t give specifics as my sources are good friends. Just ask around and you’ll see what I mean.

Similar to our discussion on housing, let’s run some numbers using actual education costs in 2012 dollars. The first figure is Colorado and the second is California. These are figures for the private track:

  • Pre-school: $6,000/$12,000
  • Elementary/Middle: $15,000/$25,000
  • High School: $25,000/$50,000
  • University: $50,000/$62,500

I did a little research on education inflation and it’s been running at 6% per annum. I created a spreadsheet to look at the cost per kid at a 5% inflation rate, which also matches my forecast portfolio return if I don’t spend that money on education. If you want to play with my assumptions then make a copy of the spreadsheet (file/make a copy).

Depending on where you live, the private track has a future value of $875,000 to $1,375,000 per kid.

Knowing that we won’t be rational when we look at our own kids, think about the brothers and sisters of your peers, spouse’s family and your cousins (that’s your reference group). Would it have been a good investment drop a million bucks (each) on all of their educations?

The questions are worth asking but most of us don’t ask, we default:

  • I love my kids
  • Private is better
  • I can afford today
  • I’ll do it

Stack the education default on top of the housing default and many of my peers are looking at $3-8 million worth of expenditure. That kind of money can make a lasting difference in your city when directed wisely.

Likewise, if you think carefully about your goals (and frame broadly) then you might discover alternative uses for those funds.

…you might enjoy working less and teaching your kids what you know

…you might have superior ethics because you haven’t placed pressure on yourself to earn millions over the next two decades

…you may be a better spouse without all that pressure

…your kids might do better if you back them financially as adults

…if you’re in a weak public school district then your relocation budget might be bigger than you think

A very successful friend of mine always wondered why his father refused to pay for any of his education. My friend got himself through MIT and, as it turned out, didn’t need help from anyone.

Perhaps his Dad ran the numbers.