Tag Archives: family planning

Creating A Life With Meaning

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2016-10-15-15-57-57Jonser made flag so I loaded up my Alpha Child and we headed out to Coronado.

I was looking for ideas about about leadership and creating a life with meaning.

2016-10-14-13-48-27We spent the day before at Legoland – a cover story for the trip!

lexi_pinningWe went full “Colorado” for the ceremony – pink cowgirl boots and hat.

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What do models and professional athletes have in common?

By the time they are one quarter of the way through their adult lives, the best days of their careers are behind them.

Here in Boulder, we can pay too much attention to race fitness and body fat percentage.

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2016-10-15-14-10-10So what did Jonser have to offer?

The first thing that strikes me with senior officers is how much they get done.

The trick is being challenged enough to bring out the best in ourselves but not so busy our health, family and marriage suffer.

On the flip side, drive without a socially desirable outlet leads to anti-social behaviors (addiction, aggression, promiscuity).

My Alpha Pup has stacks of motivation, loves rules and respects authority (that’s why she got the trip to Coronado). She also loves people.

2016-10-15-15-08-14Everyone who makes it through Aviation Officer Candidate School, or Med School or an MBA program has motivation.

What’s a key differentiating factor for success?

oathEmpathetic listening.

When Jonser listens to me, it is like I am the only person in the world.

Here is a skill that can be learned, and is often ignored by overachievers.

Listening is a tough one for high-energy folks — how can we get our minds to slow enough to admit external input?

I work on impulse control. Physical first, then spoken word, then relaxing with my thoughts.

As for empathy, my kids started at a buddhist preschool. The school taught the kids, and me, various techniques for taming our inner savage.

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2016-10-15-17-08-18So we have motivated, empathetic listeners, who have tamed themselves. What next?

Lifelong learning and investment in the “person” through ALL levels of the organization.

The military, teaching hospitals, ministry, parenthood — these paths have the opportunity to learn, teach and serve.

Is this a field where I am going to be able to learn for twenty years?

2016-10-15-18-21-13

 

Passion

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What were you talking about the last time you were the most animated person in the conversation?

There’s information inside your passion.

Write it down!

In my case, I was talking about trying to be a father within a successful marriage.

A young wife will have a portfolio of needs, biases and desires.

As a husband, and new father, you are going to have your own portfolio of ideas for success.

Avoid the error of seeking to change your spouse…

…instead, be the best person you can be, while seeking to understand your core needs.

Remember…

When you are under stress, you are going to have a tendency to assign blame to your partner — stop this immediately — it is counterproductive. Try a week as a single parent and remember your family needs all the help it can get.

If you ask around (about your “problems”) then you will find out the parenting experience is universal. A better way to frame your household is your “new reality!”

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Many of my friends have a tendency to frame fatherhood (and marriage) as a negotiation.

I think there is a more effective way, than trying to outwit, outplay and outlast your life partner.

  • Be clear and consistent about your own needs.
  • Be willing to work to get your needs met.
  • Support your partner’s needs.

Childcare is an area where couples stress themselves, and their marriage, to save from their family budget.

Most my peers have the ability to earn a multiple of their babysitter’s hourly pay. Allocate four hours of work per week — invest the incremental income in time spent as a couple and time spent alone.

A wise allocation of time can bring you closer as a couple and keep you from tipping over the edge with your kids.

Wisdom

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2016-06-20 09.38.59Last month, Dr. John wrote an excellent blog about medical wisdom. I’d urge everyone to read it. I took that post one step further and read Ending Medical Reversal, which was recommended in the article. If you want to make better life decisions then you need to make time to read and consider the book. At a minimum, ensure that the book is read by a leader within your family, firm or practice.

Aside from the specific examples, which are fascinating, I hope you take the following away from the book.

2016-06-18 08.42.46-2HUMILITY – medicine is a global field where we have tens of thousands of our brightest humans spending trillions of dollars. The book makes are strong case that 30 to 40% of that expenditure provides no net benefit to humanity.

The authors lay out numerous examples where billions are blown for no net benefit. It is a wonderful reminder of our shared capacity for irrationality and misjudgment.

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2016-06-18 08.44.11PARACHUTES – one of my favorite parts of the book is when they explain that there aren’t a whole lot of parachutes left in medicine.

What does this mean?

If all of humanity has to jump out of an airplane then nearly all of us are all going to do dramatically better if we’re giving a parachute.

A parachute is an intervention with big positive outcomes for a large slice of the population.

What are parachutes that you can apply in your life?

They probably include items like: exercise, germ theory, antibiotics, vaccines, not smoking and seat belts. In a capitalistic society, there’s a clear role for government to play in keeping society focused on the big ticket items.

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2016-06-18 08.33.54EXPECTATIONS – let’s say you do your part and follow the “parachutes,” what’s a reasonable expectation from modern medicine?

Keeping in mind that 30-40% of modern interventions are bunk, I was left with an expectation that most procedures will usually make most people a little better.

That’s it.

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If we have the courage to consider:

  • widespread error
  • limited number of high-value options
  • realistic expectations

then we might find that there are new resources to focus on parachutes in other areas of our society. The cost of the status quo is often hidden from view.

There are plenty of good ideas: universal basic health services, early-childhood programs, pre-K, drug treatment, parent coaching and financial literacy training (see Kristof at the NYT). Other authors prefer infrastructure projects.

Whatever your preference, it’s clear that uninformed choices can waste valuable resources.

 

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A final note about change.

Even clearly harmful treatments can take a decade to exit the system (plenty of examples in the book). Strangely, I took this as a message of hope.

You might not be able to reform the healthcare system but you can certainly make better decisions within your own life.

Keep at it.

Ultimately, the truth wins.

Breaking Down Family Risks

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2016-06-09 17.39.38In May, I wrote about a misplaced sense of entitlement being our family’s greatest source of loss.

There are two components implicit in the article’s discussion of loss.

#1 – permanent loss of capital

#2 – loss of purchasing power over time

A wise advisor will keep these two factors front and center when discussing the risks associated with your assets, income and spending.

Unfortunately, wise counsel runs counter to human nature which likes to discuss…

Prediction of the future – we love stories about how our decisions will do better than other people’s decisions.

Fear of price volatility – nearly all price movements represent noise that can be ignored.

Two phrases for you to repeat daily….

No one can predict the future.

Volatility is not loss.

2016-06-09 21.25.10Instead of scaring yourself witless with the news, do something useful.

Turn your electronics off (ideally, for a week) and consider…

#1 – Where is the family exposed to permanent loss of capital?

#2 – Does our life situation protect us from the loss of purchasing power over time?

Consider further…

#3 – Where are our uninsured catastrophic risks – health, life, fire, earthquake, flood, asset concentration, counter party, addiction, fraud, abuse…

#4 – What is our ratio of net assets to core cost of living – how many years, months or weeks do we have?

#5 – What is the ratio of net assets to actual annual spending – most families have significant discretionary spending that can be cut in crisis. If necessary, do we have the ability to change and extend the years, months and weeks of cushion?

#6 – What percentage of our cost of living is covered by passive income (rental income, dividend income, interest income)? How does this income change over time?

a – rental income // an indexed source of income based on local economic growth, there’s also a potential capital gain associated with the land value, However, there is the potential for vacant periods as well as the need for occasional large investments with the building

b – dividend income // in a low-cost index fund, this source will be indexed based on national/international economic growth. There’s no potential for capital calls and you will have the ability to sell in small increments

c – interest income // this is fixed source of income, where the best you can do is get your money back at the end of the loan period.

If you put a number beside each of a/b/c and lay out your other sources of income (employment, pension, social security, partnership) then you will see how you are funding your annual spending.

Most families will have concentration in income, as well as assets. Concentration is a source of risk.

Are we acting on the right things?

Change slowly.

 

 

Family Investment

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2016-05-29 16.30.07Having worked in finance, and coached the triathlete demographic, I know people with a lot of discretionary income.

I have three kids and the way we allocate income has changed significantly over the years. Here’s a current snapshot.

family_spend

The marriage/kids slice (blue) is about half our spending. What the heck is in there?

  • Sitters and Live-In Au Pair
  • Preschool Fees
  • House cleaning
  • After school activities
  • Summer activities

With minimal psychological maneuvering it would be easy to shift the marriage/family allocation towards myself.

My wife arrived into our marriage with an expectation of driving herself straight into the ground to “support the family.” Her story is repeated across a range of households.

It is tempting to compromise our marriage for short-term savings.

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I like to invert the temptation and ask myself…

How do my spending choices benefit my marriage?

What about my health?

Consider…

A – collectively, we see no issue with parents torching their physical, and mental, health to “support” the family. Among my peers, the easiest way to get time alone is by working full-time. Double income, no time.

B – couples are often blind to the price the marriage is paying from being completely fried. The baby/preschool years will end up being a decade for us (2008-2018). Do you have enough passion in your life?

C – my spending places the highest premium on buying time

  1. time exercising – to maintain my physical health
  2. time alone – to maintain my mental health
  3. time with my spouse – to share experiences

My wife often feels uncomfortable with our childcare spending. There is tremendous social pressure for a mother to follow a path of doing everything.

Buying time is insurance against the risk of arriving at 50 overweight, mentally fried, with a marriage in need of counseling and an oldest heading into middle school with an angry (or absent) father.

Trade money for time.

What’s the value of an extra day off, forever

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2016-04-07 10.36.45What would you pay to have one day off, every year, for the rest of your life?

Once you have enough to cover your basics, you are paying an implicit price (in future time) for every dollar you spend.

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A case study to illustrate…

Let’s say you are considering a $10,000 trip of a lifetime…

My preferred way to view spending is relative to my net worth. My give-a-hoot threshold is set at 0.1% of family net worth. It helps me not sweat the small stuff.

Applying that heuristic to a $10,000 choice, you need a net worth of $10 million (!) not to be thinking carefully about the trip.

So let’s think very carefully!

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Realistic financial freedom comes from chipping away – day by day – at the requirement to work full time to fund your core cost of living

The value of a future benefit is undervalued by nearly everyone. A short-term focus makes sense from an evolutionary perspective but greatly limits the options in the second half of your life.

Let me reframe $10,000 of spending for a family earning $120,000 per annum.

Core cost of living = $120,000

Capitalization Rate = 4%

= Capital required to retire completely

= $3,000,000

Divide that by 300 working days per annum, and you get $10,000 of capital per working day.

So the vacation could be priced as one day working, forever.

When you look at a new SUV, you could see an additional week working, forever.

Jewelry, RVs, hobbies, private education… All can be viewed in terms of time.

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Keeping it simple…

…every ten grand you invest in a balanced, low-cost portfolio, buys you an extra day off for the rest of your life.

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…and while it can be tougher for a young person to accumulate capital, the time payoff is FAR greater.

$1 million of family capital can buy you four-day weekends, for the rest of your life.

After you’ve bought it, don’t wait too long to spend your time.

Non Financial Aspects of Estate Planning

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2016-03-09 15.23.39A friend asked me to give this talk to his firm, but I prefer to write short articles. 😉

When families talk about estate planning the discussion can center around cash flow, assets and tax minimization. While those topics need to be sorted, dollar-centric living can lead to regret.

If you apply last week’s tips about family leadership, you might discover certain realities about financial wealth.

2016-03-16 13.56.23Namely…

The highest use of an asset lies in its capacity to enable better choices…

  • flexibility to allocate time towards shared experiences
  • the ability to control one’s schedule
  • the opportunity to tag along when other people are doing what they enjoy
  • health in the context of body, mind and spirit

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2016-03-13 21.51.50Cash flow without education, connection and meaning can be a negative. Examples are the challenges faced by lottery winners, professional athletes and young, highly paid professionals.

With cash flow, I would go further and point out that excess family cash flow will ultimately be consumed by the least responsible adults in a family system.

You might tell yourself that you are “doing it for the kids” but the money ends up being blown by someone’s aunt or uncle.

2016-03-11 20.04.44-1What to do?

  • In your lifetime, use money to acquire time.
  • Share time with people you wish to influence with your values. Be the brand.
  • Remember that it’s better to earn, and spend, our own way in life. It’s what you did.
  • Have a bias towards “assets used for shared experiences,” rather than cash flow.

Ask the question, How do I wish to be remembered?

Be that person, today.

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2016-03-10 08.52.21Shared experiences, both positive and negative, bridge generations across time.

As a child, I had four grandparents and three great-grandparents. Of my childhood elders, only one made the transition into my children’s consciousness. The elder that bridged across did so because my daughter and I were involved in her end of life care.

Love, not money, is what travels across time.

2016-02-24 16.51.20

Family Leadership

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2016-02-08 10.36.04I’ve written about the concept of the good-enough parent — a combination of showing up and not retaliating. It is a simple strategy but quite challenging in the face of a disgruntled preschooler!

Seven years in, I’ve managed to make non-retaliation a habit. If you are still working on it then remember to practice all-the-time…

  • Yield in traffic and queues
  • Breathe into tension
  • Slow down

New habits are most easily created when we are capable of self-control — away from the kids, in low stress environments.

I’ve been at it for over 15 years.

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What’s next?

I’ll start by sharing what’s definitely not next.

A habit of constant correction will make you, and everyone in your house, miserable.

An easy way to make this visible… track your positive-to-negative interactions with your kids, spouse and friends.

Another way… ask a close friend… When I talk about myself, what do I say?

If this is an area for improvement then it’s already obvious to everyone around you.

It was shocking when I did this with my oldest. I became so aware of my error in approach that you can get a quick rise out of me by constantly correcting her in my presence.

Correcting less, in ALL areas of my life.

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2016-03-09 15.27.20What about next-level positive habits?

De-escalation – become skillful in draining the energy out of situations.

Most of us didn’t grow up in an environment that taught us these skills.

Becoming an effective family leader will require education, motivation and daily practice.

Two things helped me here:

  1. learning the methods of outstanding preschool teachers – if they can teach preschoolers to de-escalate then they can certainly teach us!
  2. reading the secular writings of spiritual masters

2016-03-12 10.34.52Opening To Experience – the most valuable experiences shared with my family serve no purpose, other than sharing an experience with my family.

Often, my shared experiences are activities that I would not choose for myself. Recent examples, collecting sea shells, swim races, downhill skiing and art shopping.

2016-03-12 10.31.31Most of the leadership we were shown as children was about saying “no.”

Constantly being told what not to do.

Consider becoming the embodiment of what to do.

Is it any wonder many of us rebelled and left as soon as we could?!

Is it any wonder that many of us continue to hold resentments about events, and people, that haven’t existed for 20, 30 or 40 years?

To break this cycle, I say “yes” as much as possible. Yes to beachcombing. Yes to downhill skiing. Yes to painting. Yes to card games.

Stay open to experience.

Stay open to love.

2016-03-10 08.42.33

Buffett and Munger For Familes – My Wife’s Cats

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Two Cool CatsWhat can a family learn from one of the most successful investment partnerships of my lifetime?

Last month, I read Tren Griffin’s book on Munger and re-read Warren Buffett’s Owner’s Manual for Berkshire Hathaway.

I read them NOT to figure out how to make money. I read them for ideas to make myself more useful to my family and make less mistakes in my decision making.

A successful partnership is characterized by:

  • Shared responsibility and shared benefits
  • Trust and open communication
  • Confidentiality, only when necessary, rather than secrecy

The role of the managing partners:

  • Allocate capital
  • Structure incentives
  • Seek to embody shared values
  • Communicate via stories
  • Resist the urge to seek an edge

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Financial Strategy, for capital allocation

This is important. Even financially-sophisticated families get caught up in the noise that constantly surrounds us.

Keep It Simple

  1. Focus on sustainable cash flow divided by capital employed
  2. A fundamental reference point is the 30-year rate on US government securities
  3. Treat deferred tax as a valuable, unsecured, non-recourse loan from the government

My recent article on the Boulder real estate market used the above.

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Understand the value of deferred taxation

If you sold everything you owned (right now) then how much tax would you have to pay?

Many would be proud of a low number. I know that it would make me feel safe.

Buffett and Munger would argue that you want this number as high as possible.

In my family’s case, we would have to pay 6% of family assets, on a portfolio with an average investment age of less than five years.

Historically, we’ve earned ~15% per annum on family capital. I don’t expect that to continue, so let’s assume the family earns 7.5% going forward.

What’s the value of NOT selling and letting the 6% deferred tax asset continue to compound?

7.5% of 6.0% is an extra 0.45% per annum.

Let’s make that number real.

Express it in dollars and compare to your family budget.

  • In our family, it’s equivalent to our federal income tax bill
  • In a friend’s family, it’s equivalent to what they pay for professional advice
  • In another family, it is more than they save each year

If your advisers churn your assets then they are costing you much more than their fees.

View percentages in dollar equivalents.

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Berkshire has bought sub-par business in the past. However, so long as the businesses have decent management, good labor relations and generate a little cash… they stick with them.

It’s like my wife’s cats.

  • When she goes out of town, they pee on our bedding and furniture.
  • Most weeks, they barf a few times around the house.
  • However, the kids love them and are aware of their faults.

By sticking with the cats, despite their faults, I demonstrate loyalty to the entire family.

That said, I’ve made the point…

We’re not replacing the cats.

 

 

 

 

What I Learned This Year

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LexiMyLexiHealth Is Wealth: In my peer group, wealth can be measured in terms of vanity/victory (athletes) or consumption/conquest (materialists).

Since putting athletic competition to one side, I’ve done better with my physical health. I was fooling myself with a belief that extreme exercise was a requirement for personal satisfaction. Even moderate exercise leaves me as a 1-in-10,000 exerciser.

With improving physical health, it’s clear that my inner experience is what’s next.

With a young family, there are moments when I feel trapped.

Well, despite my tendency to blame others, there’s only one person who can free me!

  1. Freedom to take actions to support my physical, mental and spiritual health
  2. Freedom to control my schedule
  3. Freedom from thought patterns that aren’t useful

With the above in mind, I ask: Who should allocate my capital and my time?

In my case, the answer is “me.”

The last year has been driven by “volunteer” work, mainly with my family.

As I’m prone to over-doing-it… there have been times when I’ve driven myself into the ground.

The symptoms are concerning.

I lose my ability to concentrate, which shows via impaired hearing, sight and memory. I even got a little delusional after the 55-hour week with the kids.

Not fun, and a strain on my marriage, but I do a reasonable job of getting myself back on track.

Knowing my family history, and taking personal responsibility, I’ve decided:

  • to share experiences with the people that are close to me
  • to reduce noise in my daily life
  • to free myself for daily exercise in nature

This requires doing less “for money” and spending money “for time”.

This requires saying “no” or “not yet,” depending on the circumstance.

This requires facing unfounded, but deeply held, fears:

  • letting people down
  • sliding into ill-health
  • financial ruin
  • failed marriage

Do my facts fit my fears?

Usually not.

But when they do, change slowly.