Creating A Better Reality

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

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


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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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


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

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

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


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

Family Financial Structuring

Following on from my Estate Planning Docs post.

Trust vehicles can be useful to your family and I will illustrate with a couple of stories.

First thing to remember => trusts work best if you set them up long before you “need” them.


Grantor Trust

Part One: Around the time I turned 40, I found myself in a situation where I had joint & several liability with a business partner who’d made poor choices. As fate would have it, these choices were made inside an insolvent group with over $100 million of borrowings.

Now, the banks were not going to be getting their money back by suing me but (even the remote possibility of) being wiped out late in life was highly unattractive.

Part Two: Long time readers will remember that I used to do bike-focused training camps with top age-group athletes. I would ride, on open roads, with doctors and CEOs who were completely exhausted. If an athlete was killed, or permanently disabled, then it would be easy to prove a large financial cost to their family.

As a business, we dealt with this risk through waivers, event-specific insurance and a family-level umbrella insurance policy.

When I added up the cost/time/worry of this approach it was expensive, even more so once I had my own family to protect.


Take the two parts together => I was working in two fields. The first field was similar to being a director/fiduciary of a company. The second field is similar to being a professional exposed to allegations of malpractice.

One day, I was talking to a tax accountant about what was going on in my life, and the changes that were expected in Estate Taxation. He recommended I speak with a local trust attorney.

An initial meeting showed me that the cost to set up a new structure would be the same as one year’s insurance bill. Because I have the skills to run the fiduciary aspects, the ongoing cost would be a fraction of what I was paying my insurance company.

Step One was setting up something called an Intentionally Defective Grantor Trust. From a layman’s perspective, I put my share of my house and rental property into a trust that benefits my spouse and kids. I retain the tax liability for the trust, for my life.

From my point of view, the main asset I am left with is my earning capacity, balanced against future tax liabilities. I’m a much less attractive target to any potential litigant.

From my family’s point of view, the trust is similar to an annuity, tied to my life. When I die, they can sell assets and/or move into a small rental property, while living off the rental income produced by the larger rental property.

The specifics are technical, there’s a bunch of tax considerations and you should take expert local advice.

This change gave me a more secure feeling than the insurance policies.

Over time, I exited the disaster-prone aspects of my life and that helped too.


Irrevocable Family Trust

I’ll illustrate with a recent example – my brother-in-law died and his balance sheet will flow into my wife’s family.

What follows isn’t what is going to happen, but it could have => check with an expert in your jurisdiction if this seems useful.

Here’s a story… assume Andy had a brother called “Dude” (he didn’t).

Andy had planned ahead and wanted to leave assets to Dude. However, Dude didn’t need the money, or Andy didn’t like Dude’s wife, or any number of reasons Andy might not want to support Dude’s personal balance sheet.

So Andy set up an Irrevocable Trust. Let’s call it The Dude’s Trust => Dude, and Dude’s descendants are the beneficiaries.

Andy then drafted his will, or his Living Trust, to leave everything to Dude, but gave Dude a specific power of appointment to nominate The Dude’s Trust in his place.

Before Andy dies, he would also have the ability to make gifts to The Dude’s Trust.

Did you see what happened? Andy was able to achieve what he wanted => money to Dude. Dude is left with a choice to inherit directly, or into a family trust.

In a world with an unknowable future, this is a valuable option.


The current Estate Tax Threshold is $11.58 million per individual, double for married couples. I’m far, far below that threshold.

However, that limit sunsets in 2025 and who knows what tax regime will be in place when I turn 75 (some time after 2040), or beyond 2080 when my kids age up.

I can imagine we shift to a regime I’ve worked with outside the US => deemed sale at death, zero personal exemption, no step-up in basis, the estate pays capital gains tax and the net flows to the beneficiaries of the estate. It’s simple and I like tax simplification.

In that scenario, trusts that were established prior to the change in rules could be grandfathered, particularly if they already own assets. To get around assets sitting in a trust “forever,” the IRS might create a rule for the deemed sale of trust assets, this rule exists in jurisdictions outside the US.

Even if everything stays the same… given the asset protection benefits of a trust, and the ability to “finance” the structure through reduced insurance payments, it made sense for my family.


This is not legal, tax or accounting advice – seek local experts.

Combination article, with chart, from 2013 is here.

Basic Estate Documents

Recently, a local lawyer advised a friend, “Sorting these documents, now, will save you a multiple of time, money and hassle – later.”

I would add… it is best to make end of life plans when stress is low.


With Andy’s death, I re-read my stuff last week. I was surprised how little needed to change.

Indeed, a good attorney saved my family time, money and hassle.

General Durable Power of Attorney – this lets someone I nominate act as “me” while I am alive – I do not need to be disabled.

The POA does not enable anyone of act on my behalf after I die. This limbo period (immediately after death) should be considered by you and your family.

The POA does not enable anyone to step into my work roles, say, as a fiduciary. This needs to be considered.

If you execute a POA then place the original in a fire safe where you can run it through a shredder (not joking) in case there’s an issue with the person you appointed – I’ve seen a lot of wacky stuff in my life, things change and this is a very powerful document.

Living Will – this covers how I’d like to be treated when I’m dying. Very useful for your family, who will be blasted if you’re in any sort of condition to need to dust off this document. Also useful for your medical representatives, who may be reluctant to deny you treatment.

Medical Durable Power of Attorney – just what it sounds like – who is authorized to make medical decisions on my behalf. Keep the contact details up to date and available to your family.

HIPAA Releases – who can receive my medical information. There could be people you’d like to have informed, but not act on your behalf.

Living Trust – a very useful form of trust – assets can come in/out and it can be used to title financial and real property assets – a local attorney can tell you more.

These documents are not expensive to put in place.


My current will was done ~13 years ago and has seen 4 changes.

The changes were minor, inexpensive and easy to arrange. Once again, doing it right the first time saved us time, money and hassle.

The original will predates my kids. You might get a kick out how it played out.

Before my wife was pregnant, I was leaving my life to charity. At the signing meeting, my lawyer, who drafted the docs, smiled and said, “I bet I see you in a couple years to change that part.”

Sure enough, my kids arrived, I got to know them and I made some revisions. Those revisions start to get a little complex so I’ll outline them in another post.

Most people don’t need complexity. All my assets, eventually, flow into my living trust, which already holds title to most of my assets. Standard clauses are used to protect my spouse and follow the tax code.

Whatever you decide to do – double check what’s required for a will to be valid where you live. There are places where a handwritten letter, witnessed by the sole beneficiary, doesn’t work. Colorado is one of them – link is to what’s required for a will to be valid in Colorado.


A good attorney, familiar with the laws in your state, is essential. She will have you decide, in advance, on the areas where disputes happen.

Ask your attorney about something called Joint Tenancy with rights of Survivorship. It can be a useful way to hold property titles for some situations. Link from the Colorado Bar Association.

Also find out about successor beneficiaries for your assets. Certain jurisdictions will let you nominate where your assets go, separate from a will.

Your attorney will likely have a checklist of items for you to consider => 529 accounts, retirement accounts, death benefits… take time to think it through.

The US has something called Stepped-Up Basis – it is worth learning about. Basically, certain assets (like real estate) have their taxable basis reset at the date of death.

I’ll illustrate with a quick example: Grandpa G bought a house in 1980 and his taxable basis is $50,000. He dies in 2020 and the house is worth $1,000,000. If he sells the house the day before he dies the gain is $950,000. If his estate sells after his death then then gain is $0.

Be aware there are wrinkles to do with trusts and certain types of assets don’t qualify.

With all this stuff => ask an expert.


If you trust someone enough to give them a General Durable Power of Attorney then consider making them a signing officer on an “operating account.”

More than a decade before we needed it, a grandparent did this in our family. This made it easy for a trusted family member to pay bills before we were in a situation to invoke the POA.

It also removes the expectation for the wealthiest member of your family to finance everything, which can create an unnecessary distraction when you should be supporting each other.




Kids => If your kids end up orphaned then you might want to split their “care” from their “finances.” The skills of a Guardian could be very different than those a Conservator. Are you familiar with these terms? Ask your lawyer to explain.

Andy used to joke that all we needed to do was leave him with enough to cover a beach hut in Central America. With a small nest egg, he’d ensure our kids were well loved and became pro surfers…

We miss him dearly.


Final words of advice…

1/. There are good people who are useless under duress

2/. There are people who cope with grief by misusing veto power

Think carefully about who you put in charge and what you let them control.

I have a medical doctor and a military officer in my structure => individuals I trust to be compassionate, and execute my wishes, under duress.


This a quick outline – take expert advice from someone familiar with your jurisdiction.

I’m not an expert. Over the years, I have hired experts and it has proven to be money well spent.

What’s Your Filter

Our youngest told me our cat needs a Halloween costume. I laughed while realizing that my home-school internet monitoring system might need improvement.

Most of us will be “adulting” for 50+ years.

Half a century is more than enough time for choice to impact outcome.

Here’s how I stack the deck.


Understanding three things greatly simplifies decision making:

  • Payoff function
  • Worst-case scenario
  • Who bears the worst-case scenario

In most cases, knowing the above eliminates the need to make any prediction (of an unknowable future).

In investing, you can bet big when someone else bears your downside (non-recourse leverage, other people’s money). At home, you will want to be more careful.

You are going to be tempted to spend most of your time predicting an unknowable future.

Don’t.

Instead, figure out the payoff function, what’s the worst that can happen and who bears that downside.


Previous writing touched on the payoff functions for fame, financial wealth, strength training and personal freedom.

Tim’s blog did a great job of laying out on his worst-case scenario – shot in his own home as well as a brain dump of everything that can go wrong, and right, with fame. It was an enjoyable read but life is too complex to perform cost-benefit analysis for every choice.

Sounds good, doesn’t scale.

One of my favorite shortcuts is to teach myself the areas of my life where I have a lousy track record, and defer to my expert advisor(s). I look for advisors with domain-specific experience and a temperament different from my own then… …I do what they recommend.

There’s deep wisdom in stepping outside ourselves => What Would Jesus Do, or Buffett, or your coach, or whomever you think knows better than you.


Each time I choose, I open the opportunity to make a mistake. To reduce unforced errors, there are filters I use to eliminate the need to make a choice and to make the correct choice obvious.

First level filter => repeat my choice for a decade, where’s this likely to take me?

What’s the worst that can happen? Live long enough and you’ll see it happen.

Specifically, I want to stay well away from:

  • Prison
  • Permanent Disability
  • Bankruptcy
  • Divorce
  • Violence
  • Self Harm

The first three are obvious, but that doesn’t stop many, many people from surfing close to the edge, or getting an emotional rush from having charismatic risk-seeking friends.

Sometimes I need to phase out a relationship, sometimes I need to adjust my own behaviors.

With marriage, specifically, it’s impossible to “see” just how challenging your life will become if you have kids. You’re going to be really, really stressed out for a decade. Every single one of my prior bad habits tried to make a re-appearance in my life!

There’s no easy way around it but you can significantly reduce your chance of disaster if you pay attention to how your potential mate approaches risk.

Personally, I like to drive with people. You can learn a lot about someone by chatting, and watching, while they drive in traffic.

It is difficult to let charismatic sociopaths out of our lives. These people are a lot of fun to hang around with, especially when we aren’t the target of their ire. It gets easier with a few bad experiences.

When you need to make a change, resist the urge to justify your choices.

Learn to ghost with grace.


What if we are the person that needs to change?

Owning my choices and considering where they might take me.

Mountaineering, peer choice, alcohol use, cigars, bike racing… as my life changed from “just myself” to “my young family” the following became clear to me…

The people who were bearing the downside had no choice in whether to take the risk.

To make myself feel better, I took out a long-term care policy. The insurance reduced the financial burden if I was disabled but didn’t address the mismatch between who was taking the risk and who was bearing the downside.

In my 40s, severe permanent disability could have been worse than death. In 2013, with three young kids and an impaired balance sheet, I was in a very different place than I hope to be when our youngest graduates high school (in 2030, or so).

Perhaps I’ll add back risky stuff in my 60s… right now, I doubt I’ll have the energy.

🙂


Divorce, violence and self-harm => the bottom half of the list.

  • Nobody gets married hoping for a divorce.
  • Nobody starts a drive hoping to get their car shot up in a road rage incident.
  • Nobody repeats a pattern of justified rage hoping to create a crisis.

But these things happen, and their seeds are small choices, repeated.

I try to be alert to habits that can lead me astray.

Anger remains a challenge for me.

I pay attention to situations and habits that reduce my faults.

I focus on better.


My definition of winning has changed over time. However you define it, success is more likely with a plan, a couple well chosen peers and a habit of referring to a clear filter.

Making a habit of the first-level filter, tosses all kinds of stuff into the forget-about-it pile.

Reminder about the 1st Filter => repeat for a decade, where am I likely to be?

The first filter very quickly gets rid of (most of my) bad ideas.

Then what.

Here’s how I set priorities and shape my “to do” pile.

When I was an elite athlete, every decision I made was passed through a filter of, “Will this help me win in August?” At that time, the filter worked very, very well.


August 2007, with my real 1st Place Trophy. Before kids, we took ~1,000 days for ourselves. Highly recommended!

In 2005, I married and quickly realized my filter (of winning) would, if applied over many years, make a second divorce more likely. Deeply seared from my divorce, I really, really, really didn’t want another divorce.

I wanted a different result so I needed a different approach.

I needed to change my filter to…

“How will this impact my marriage?”

Your situation is likely different, but your need to know, and direct, your filter is the same.

Baby, or COVID, arrives… “How will this impact my family?”

Allocating time week-after-week… “What’s my real priority?”

Trivial irritations, the opinions of strangers… “Who gets my emotional energy?”

Every single person we meet has a filter => victory, vanity, external wealth, fame, likes, validation, please the person in front of me, attention, minimize conflict, how do I feel right now, what is the last piece of advice I heard… lots of people, lots of different filters.

Make a choice.

Iterate towards better.

All That Remains

We finished our volcano science unit with a trip to a volcano! This was the first field expedition of Home School.

Someday my kids will move out. This is a summary of what I hope they take with them.

Here’s what’s most important to remember:

  • We’ve already won
  • It’s ok to say no
  • We can handle the truth
  • We can do difficult things

Lunch on top – my wife catered the kids and I made a huge error by self-catering!

There’s a great book out there called Winning The Loser’s Game – a “loser’s game” is one where you win by not beating yourself. The book has an investment angle but, in many ways, a successful family is created with a similar approach of avoiding error.

Errors such as… financial ruin, substance abuse, fractured relationships and emotional upheaval.

Many unforced errors occur, and repeat, because their causes are deeply programmed into our consciousness, and family culture.

To avoid errors, we need to think slower and whittle away at the habits that hold us back.

So how do we slow down our thinking?

We take away feelings of obligation, feelings which can lead to blame and lack of personal ownership => All family is optional

We don’t let pressure build up… Everyone can speak, about whatever they’d like to discuss, and we commit to a “no secrets” policy.

Secrets, taboos, not being able to speak => these habits make it easier for evil doers to do bad things.

Ask child abuse survivors to describe their family culture and you will find a consistent pattern, of repression and secrecy, that enabled their abusers.



I got the next tip from a four-generational family, where the patriarch was deeply successful (work, family, financial, community). The family has multi-generational quarterly meetings and has successfully managed two transitions between generations.

Close but not too close – via staying in your own space – via sorting your own food – with a respect for differences.


Take the above and invert them…

…a feeling of obligation, never being able to say what’s on my mind, staying in close quarters, eating different food…

then… add alcohol, relentless toddler noise, politics or any emotional trigger..

and… BOOM!

Not winning!


Carrying weight is a privilege. On the way down, I grabbed his pack and he busted out a quick hill repeat. Blood was tasted, apparently. He gave himself an introduction to “race cough.” The kid has a passion for hills!

What does winning look like?

We enjoy sharing experiences with each other, usually in nature.

It is about shared experience and, frankly, it need not be all that fun. My son and I find meaning enduring difficulties together.

Each generation, each household, each adult needs to affirm its own set of values and define winning on its own terms.

If there isn’t a consensus then we remember… it’s OK to say “no” and all family is optional.

Also… we don’t need to agree to be buddies and I’ll respect your right to not have an opinion.


Some multigenerational thoughts…

Seek to connect not correct. Do not put a spotlight on people, just ask an easy, “how are you doing.”

Down, and up, the generational chain remember our goal is shared experience, not optimization.

Joys, and disappointments, with founders/followers/descendants are best used to motivate positive personal change in myself.

The most powerful form of teaching is living an open life where people see us modeling the best we have to offer.

Pay attention to those who bring out your best.



What about money and finances?

The fundamental point is everyone pays their own way and we do not create incentives to consume more. By the way, COVID gives you a useful opportunity to make changes in your family spending choices.

Any capital that become multigenerational is managed in a custodial capacity.

What does that mean?

It means you take care of things you didn’t create so others can enjoy them.

When financial decisions need to be made, we remember we are less likely to make errors if we keep it…

  • Simple
  • Low cost to hold
  • Focused on long term capital gain
  • Tax effective
  • If it won’t make a difference then wait

I use the above as a checklist because it slows my decision making.

For me, the three most important factors to remember are: cost to hold, leverage/borrowings and wait if it doesn’t matter. Together they nudge me to avoid the most common errors of investing => fees, tinkering, borrowing leading to ruin, cost to hold resulting in cash crisis….


After I’ve taught the above, I will hand it off and focus on modeling grace through what remains of my life.

Take what’s useful and make it your own.

What I Talk About When I Talk About Building Wealth

SuperGirl

When people ask me about asset allocation, I guide them towards family wealth.


Over your life, you will see things blow up.

  • Jobs will be lost
  • Divorces will happen
  • Guarantees will be called
  • Companies will fail
  • Investments will go to zero

Certain habits make us more prone to blowing up:

Debt – fixed obligations can ruin you in bad times.

Lack of emotional control – this runs deeper than, say, anger management.

People who make a habit of rationalizing a lack of control in one domain (elite sport, closing a sale, acting in a client’s best interest) rarely have the capacity to control themselves across domains. If you might get caught, then you’re fragile.

Substance Abuse – it’s more than the cost of sorting yourself out – it is the lost opportunity of a life well lived and the impact on the rest of your family, especially your kids.

Spending vs Cash Flow – personal spending, burn rate and fixed costs => the more spending you have relative to cash flow, the more fragile your finances.

The above is a long way of asking, “What aspects of your life might blow up?

Which is a polite way of saying, “I’m not sure asset allocation is the most pressing issue in your life.

If you work in an ethically-challenged field, have a lot of borrowings, have a high burn rate or are surrounded by peers with issues…

…then tweaking portfolio construction is a lower priority item than immediately removing what might ruin your life.

I’ve done it. You can do it. It’s better on the other side.


How large is your current portfolio when compared to your lifetime portfolio? – AKA you might have more wealth available in your career than your portfolio.

Investing is different at 25, 40 and 55 years old.

The nature of “different” depends on your personal circumstances.

#1 => Consider your Core Capital. The single best thing I did out of college was save four years of personal living expenses, $100,000 in the mid-1990s. It sat in a bank account, while I worked my ass off at my career.

Having that money enabled me to choose better and choosing better became a habit.


Very, very, very (!) few people can be professional investors – AKA can I get rich by beating the market?

Take an honest look at the people that you know in finance. How many of them “got rich” from their own money? Remember these are the experts.

In finance, most people get rich due to the rules of their game and collecting pools of other people’s money (your money, by the way).

With your portfolio, keep it safe, simple and low-cost. A target-date fund makes a nice core holding.

Having my Core Capital enabled me to take more risks in my career path, and life experience => not with my Core Capital.


Once-in-a-lifetime opportunities happen once a decade – AKA great deals happen when credit markets are shut

Here are the assets I own and why I own them:

  1. Index funds => long-term, diversified, not linked to my home real estate market
  2. US Treasuries/Core Capital => 5 to 10 years family expenses
  3. Boulder real estate => A relative value play against California, a cost-effective way to raise a family and a fantastic outdoor life. Think very carefully before locking yourself into any location. As a young man, my lack of ties enabled me to jump at great opportunities.
  4. Cash => my early retirement was funded by three deals I did coming out of the last credit crisis. Once you have your Core Capital (say, five years living expenses) then building up a pool for “great opportunities” is a consideration.

Starting out? Read this PDF.

Be wary of home bias => you can see it in my portfolio => even more risky is having your balance sheet, retirement and job reliant on the success of your employer.


Switching Costs – AKA think carefully before you sell good assets

I have assets in my portfolio that I would not buy at today’s prices. Financial theory tells me I should sell these assets.

  • I have zero confidence in my ability to predict the future.
  • If I sell assets then I pay taxes and commissions.
  • After selling, I have to figure out where to put the capital.
  • I doubt any “new” plan will be better than my current plan, which is simple and low-cost.

Release yourself from constant optimization => good enough is good enough.

Put your efforts into being a better version of yourself.

 

Baby Essentials

10411151_10152583824527622_2265981354170992571_nA friend just had a new addition. Here’s a summary of what I learned.

Become a Jedi-Master of the baby swaddle – this book will teach you how – there’s nothing more important than being able to settle your baby.

Put a full-size mattress in every room where the baby sleeps – we spent two years hunched up on a circular chair and could have saved ourselves a lot of hassle by spending $100 on a twin mattress.

More than vacations, clothes, a bigger house, visits to family… what your marriage needs (for the next three to ten years) is sleep and time. Time for yourself, for friends and for each other.

Say “no” to just about everything. Now you understand why your friends disappeared when they had kids!

You will get a chance to add stuff back later. For now, just get more sleep and some light exercise.

You are likely to hold a grudge against any child, or adult, to whom you overextend yourself. It is a paradox that you serve your family best by holding some of yourself back.

Forgive each other when you inevitably fall short. It’s a stressful time.

What I Learned This Year

2018-11-23 11.00.48

You’re probably going to feel different about that later.

I say that to myself, a lot.

And I never regret following what flows from it.

Namely…

  • Not acting on anger.
  • Resisting the urge to “say what I really think”

+++

2018-11-19 16.44.04I recharge in solitude, ideally in nature.

I seek to fool myself that the solution (to everything!) lies in withdrawing from society.

I counter this faulty thinking by saying to myself… “I know you feel that way right now but you’re likely to need help, at some point, over the next 20 years.”

If you’ve ever been in a bad relationship then you might have a similar thought pattern…

…thinking that the problem lies in all relationships, not simply the bad ones.

I don’t have a mantra to help you get past your pain but I can say that my marriage is a great source of strength, stability and happiness for me.

“Better” is out there and it’s worth looking around.

Put yourself in a position to meet someone who shares your values.

Try to make yourself into the person you want to meet.

+++

2018-10-31 08.09.49My BIG change for 2018 was waking up earlier, way earlier.

I’m up two hours before the rest of my household.

At first I used the time to surf instagram and drink coffee on the couch.

Eventually, I started going to the gym.

“Gym Days” are better.

Not easy.

Better.

+++

2018-11-07 16.18.42-1

Life is better when I’m stronger,

Even at 49.9 years old, I’m able to be stronger than just about all my peers.

Being stronger is available to you.

Four days per week, 30 minutes per day.

Results in… better!

+++

Get up early, lift weights, be pleasant to those around you and when you are thinking otherwise remember…

…you’re probably going to feel different about that later.

Strategies for Good Times

Here are three areas where I fool myself.

Consider Ruin – I’ve done a good job of addressing the risks identified three years ago. So good that, when I asked myself the question, “What can wipe me out?” I quickly answered, “You’re set amigo.” That’s a top-of-the-market sentiment if I ever heard one.

Having mitigated the hazards of leverage, unemployment, litigation, fraud, risk-seeking peers and insolvency… my main risks are health and accidental death.

Do you know your own?

Stay Variable – I was listening to out-of-state visitors rave about the beauty of the Rocky Mountains.

They’re right.

Where they go wrong is assuming that buying a condo will enable them to lock in the emotions of beautiful spring day.

I’m just like them.

We’re all just like them.

Good times give us access to additional finance/capital. We often use this money to capitalize luxuries and time.

Stay variable, stay invested and resist the urge to lock in family overheads.

Rebalance Time – the best deals I’ve done have been where I traded money-for-time.

It takes vigilance to carve time to become world-class at things that interest me. Mastery makes me happy.

Social media, marriage, long-term friendships, work/non-work, self/family – I don’t advocate being in balance – I do advocate making an honest assessment and asking myself if I’m OK with where my time allocation will take my life.

Geographic Reappraisal – Real Estate October 2017

This business insider article about an SF Bay Area house that sold $1 million over asking caught my eye.

Here in Boulder, we’re up 100% over the last seven years. Most of the increase has happened in the last 2.5 years.

Notwithstanding our big local increase, the “coasts” and luxury vacation markets look expensive from here.

The coasts look even more expensive when I factor in…

Schooling – Can I use the local schools? If not then my cost of living jumps by $25,000 per kid, per annum, after tax see the linked article – public, in-state education will save my family $1 million per kid.

Tax Base vs Legacy Liabilities – How heavily taxed is the location? How large are the legacy liabilities (health care and pension) from former city, county and state employees? The large cities of the oldest parts of the US look awful in this regard.

Other costs of living – Cali always surprises me when I run the numbers. I suspect it’s similar in places like New York and Seattle. Costs are 50% more expensive for the rest of my budget.

I am not recommending that you sell. I’ve made a decision to hold through the next recession.

However, the relative trade into “states with great lifestyles” strikes me as attractive — North Carolina, Montana, Idaho and Colorado.

If you are considering taking-the-leap…

Live where you don’t need to leave — can I create a long-term, year-round, local life here?

When I worked in international finance the “top guys” had homes in three or four countries. That kind of overhead has two negative impacts on your life: (1) your ethics are easier to purchase; and (2) you’ll need (at least) an extra decade of full-time office work.

Kill your commute — can I live within an easy walk, or a short ride, of where I spend my time?

When I was thinking about moving to Cali, I plotted my life in Google Maps. I did the same thing for my prospective life in Palo Alto. That gave me two geographic “triangles” and I calculated real estate and family costs inside the triangles.

Finally, surround yourself with people that live a life you’d like to follow. I do best with an active, outdoor life in a location with abundant sunshine.

This last point is important — know what you want — know where you do best.