My kids have started asking me “what’s next” in terms of high school and college.
I told them to save those questions for a few years – what’s important right now is learning the basics and enjoying themselves.
They did, however, get me thinking.
This starts out as a letter to our youngest.
I’ve spent the last 20 years with ~2,000 hours (per annum) of self-directed time. When I reach “normal retirement age”, I will have had an extra ~70,000 hours versus what I was told to expect.
Consistently making choices as if time is more important than money has been a defining characteristic of my life after 30. Those choices, much more than my personal results, have been what gave me a 1-in-10,000 life, so far.
By the time you get to my age, you will have a series of stories you tell yourself about why you can’t do certain things. You’re also going to have the habit energy of 30+ years of choices.
The good news is many of our choices matter much less than we think, I got past a lot of bad choices.
Avoid ruin, build good habits, persist and you can achieve a very useful form of freedom.
My adult life, that you didn’t see, splits into three parts:
High school (to 18 yrs old)
Early adulthood (18 to 25 yrs old)
Adulthood (25 to 40 yrs old)
Along the way, people will be giving you never ending advice — to seek your attention, to get your money, to convince you to serve their ends…
Most of this advice is going to be tactical, short-term, single-action oriented // not particularly useful and a distraction. To blow through this (largely useless) advice I hope you to make a habit of asking yourself three questions:
Who is this person?
How do they know?
What are they selling me?
You’ll have to figure out your own purpose in life. Here’s what my choices say about what I did from 18-40 years old…
Free to choose…
…how, where and when…
…I allocate my time.
What I’m going to share is a strategy for getting yourself time.
What’s the role of high school?
Create options for further study. Science, mathematics, engineering, finance, accounting, technology… choose your courses so you can take any of the challenging majors in college. In 1986, I could have gone any direction at any major university in Canada.
If you can’t pull that off then learn a valuable trade, or skill, where you have a shot at becoming world-class.
The above is your “to do” list. There’s a wide range of successful outcomes possible, if you avoid early setbacks.
Pregnancy – avoid it in yourself and your friends – free contraception saves lives
Early habits of addiction and substance abuse – hook yourself on exercise
Suicide – keep an eye on your friends, and yourself – get help when you need it – everyone needs help
Pregnancy and addiction can be overcome. With regard to suicide, stay in the game – your future self will thank you.
You must have faith about the impact of long-term compounding – it’s why I started saving your allowance in Kindergarten. Our brains are not set up to comprehend exponents.
What’s the goal here?
The best technical education you can acquire without borrowing money.
But what if I could join the professional class?
If you can figure out how to do it debt-lite then fine. Otherwise, be wary of the time you’ll give away to get there — and — the habits you create from living a debt-funded aspirational lifestyle.
The professional class are just as enslaved by the system as most other people — they have nicer cars, bigger homes and beautiful wardrobes — they still lack time and cope with status-anxiety.
There are, however, certain professions that are ideal fits for a life with meaning.
For example, my friends who are docs/surgeons get a ton of satisfaction from helping their fellow citizens. They traded a lot of time to achieve their positions – a good trade, as they are valuable members of their local communities.
At 25, I was a well-trained financial technician. Globally, there are tens of thousands of people with similar training. What made the difference?
I was young – option value of youth!
I trained myself to live on half my income – I didn’t, and don’t, miss the spending
I was debt-free with four-years living expense saved – four years living expenses saved at 25
Living below my means
Time for my net worth to compound
Time to follow my healthy passions (athletics, coaching, relationships)
Compare that to my smartest peers at 25 — better educated, negative net worths (due to college borrowing) and a higher baseline cost of living.
Like a lot of things, there’s no visible difference until you hit mid-life.
A favorite question of mine for friends who are over 60 – name something your grandparents could have done that would have positively impacted your life today.
It’s a tough question – we are talking 50-100 year timelines.
Many families settle on… core real estate holdings that enable shared experiences across generations and time — the mythical cabin on a lake, and similar (not always ideal) investments.
What might be required to achieve that vision…
Proximity – the family needs to live close to each other, but not too close
Time – the subject of this essay
Enjoyment – do we enjoy spending time with each other? What if we don’t? How much are we willing to compromise to get along with each other?
One other quick note: one of my wife’s friends sent us three picture frames. The idea is each kid gets to put a favorite Andy memory into their frame. Wonderful gift idea that I wanted to pass along. Our oldest added a note at the bottom of her frame, “Thank you Andy for being a great uncle.” Gratitude in the face of grief.
OK, now an idea about relationships for you.
When death, divorce or another life changing event takes place, we might have a feeling that we need to rebuild. Rebuilding, after everything fell apart.
Alternatively, we might get caught in a victim mentality. The shock of the event leaving us feeling angry, hurt or disoriented – feeling like the world, or a specific person, did us wrong.
We’ve been done wrong!
Two things I shared with my oldest daughter.
Yes, your uncle dying is the worst thing that has happened to you. However, it’s unlikely that this moment is going to be the worst thing that happens in your life. [I avoided the temptation for us to brainstorm future tragedies.]
No, we are not being singled out. Death is a natural and universal human experience. Everyone you meet will have their own story about death.
In terms of tough moments, I have a buddy who started 2020 with his spouse dying after a long journey with cancer. I followed them for many years. They packed a lot of living into those final years.
Roll forward into COVID, into grief and he shared an observation about a person he’d met.
We have an opportunity to build a life together.
Opportunity, Build, Together
I wanted to pass those words to you because they are very different from the way I saw relationships as a young man.
My ideas of the past, at best, were to find someone to share MY experience with ME.
Or perhaps, someone to follow MY instructions and serve ME.
Far more useful to be thankful for the opportunity to have loved, to have had the opportunity to raise kids and then focus on what’s next. Life after children, life after his spouse has died.
When I place myself in my friend’s mindset, certain things become clear.
Don’t seek to nudge others towards my view – share experiences and change together.
Know that shared experiences, particularly struggles, are what it’s all about. Embrace the opportunity to face life together, as those will be the moments that bring us together.
If my time allocation reflected my values, then what would it tell me?
Be grateful for an opportunity to build better together.
When I wrote Regime Change four years ago, I completed missed how The Trump Administration would tempt me to give into my worst impulses.
I nailed the “rich will feel richer” part but whiffed on the vibe.
Trump’s policies remain popular. I think he blew his re-election. Of course, I thought he blew it in 2016. Life is full of surprises.
Anyhow, time to move on to something more useful.
Everywhere I have lived has a slice of the population that is Permanently P’d Off (PPO).
The slice of the PPO in the US seems to be greater than other places I have lived (Canada, NZ, HK, UK).
If you are a political party, or media outlet, then enraging the PPO is a useful strategy. Useful to meet your goals of raising money, maintaining attention and inspiring action.
I think we can all agree that Trump is, and will remain, world class in this regard => money, attention, action. The man has skills.
When I come across a member of the PPO, I don’t engage them.
I remember, this is a person who has invested deeply in their belief system (attention, friends, money, tribe, habit, neurochemistry).
I have to be most cautious with the angry. Anger is contagious.
Justified anger is my worst trait – it clouds my judgement, muddies my thinking and hurts my health.
Anger repels the nicest people in my life and poisons my relationship with my kids.
Rather than sing along with the PPO, I go quiet and feel thankful that I can avoid distracting myself from what I need to do => keep on keeping on with my family.
If someone won’t relent then a good phrase is,
If I have to pick one issue then, I guess, I’m most in favor of tax simplification.
I’ve yet to meet anyone who wants to engage me on tax simplification.
I’m grateful that my job does not require me to encourage conflict.
As a parent, where some conflict is inevitable, I tell my kids… “I love you too much to argue.”
With a view towards high school, college majors and, ultimately, careers… I think to myself, which fields avoid the need to constantly feed conflict?
Education, especially working with kids. Constant deescalation is required, or you’ll burnout very quickly.
Healthcare, I like the vibe from my friends who work in the healing arts.
Mission Focused, fields where getting stuff done is more important than triggering an emotional response.
If you invert then you can rule out a lot of stuff (advertising, media, politics, academics). There’s probably a lot more. I’m a few years away from needing to give it much thought.
For now, I’ve advised my kids…
Try to find out if you’re really good at something difficult.
Let’s refocus on something useful.
PS – paper ballots, mailed to every registered voter, run by the counties, with lots of places to drop. Works great in Colorado. The more you centralize (anything) the easier it is to cheat and the more fragile the system becomes. Just like in finance, when someone seeks complexity, it’s usually to fool you.
It’s tempting to think that more money will result in less financial conflicts. However, I haven’t found that to be the case.
The habits that lead to conflict follow us up, and down, the socioeconomic ladder.
Similarly, if I can make a habit of de-escalation in one area of my life then my approach will follow me into other areas.
Earlier this year, my wife had her eye on a very nice jacket. For some reason, I became obsessed with the cost of this jacket.
Where did my feelings come from? I have no idea but I knew my feelings were unproductive. I knew because of the filter I apply to my marriage, “Where are these choices likely to take me, and my marriage?”
I knew it would be helpful to move on but I wasn’t able to shake my opinions.
So I funded the jacket.
Actually, I funded 7x the cost of the jacket.
That jacket was a massive write-off…
I placed the money into an account that is invisible to my internet banking.
I asked my wife to pay cash so I would have no ability to track her spending.
I felt better immediately.
It was one of the best deals I did pre-COVID.
I’ve been running my financials since I was 16 and managed to save 50 cents of every dollar I earned from 16 to 40 years old.
My first job out of college was in finance. My mentors made two observations about spending that stuck with me:
From the Managing Partner, “We could keep a better eye on the small stuff but that would make this place a lot less fun to work at and it wouldn’t make any difference to my financial life.”
From a Young Up-and-comer, “If you ever want to get someone then start by auditing their expenses.”
Apply these to myself
=> make sure my choices can survive an audit (by anyone, but especially my spouse)
=> being a stickler for fine detail will make the people around you miserable (especially if you have a life that can’t survive an audit)
As a leader, what does that actually mean?
In 2009, unexpected unemployment left us facing a financial crisis. I started by cutting my personal budget by 80%. I laid that out to my wife and said we needed to cut our family budget by 50%.
We made a budget, we implemented the changes and we went on with our lives.
Good enough was good enough.
Endless optimization makes everyone miserable.
Often there is a fear-based motivator that is driving our attention to fine-detail.
It can be near impossible to transcend fear-based habits!
Two things that might help:
1/ Set a “give a hoot” threshold.
Each year, I set a dollar-amount that is my “give a hoot” threshold. If something is below that threshold then I promise myself that I_will_not_give_a_hoot.
My total spend in the “give a hoot” category is ~2% of my total budget. The 2% spend cuts 90% of my external annoyances and gives me a lot of internal credibility when I say “we don’t have the money for that.”
Not getting wrapped up in the little stuff makes my internal life better and gives me the authority to direct the big stuff.
This policy is a bargain (but letting go is oh-so-tough).
2/ What about when the threshold is triggered?
When something big pops up, I like to pause and distance myself from the decision.
I’ve set my financial life up to create friction in my ability to spend money. The friction gives me time to ask…
What’s the goal? => How does this choice benefit my family, my marriage, myself…
If it won’t make a difference then wait.
Another filter => Am I willing to spend this money on someone other than myself? If not then wait, again.
Investing and spending => I do a lot of waiting and that’s OK because anticipation is often better than reality.
I spent yesterday afternoon at a car dealership and traded my car for a newer model. The new car will be “my wife’s” and I’m going to roll in the oldest car we own.
Knowing that my family is seeing me roll in the “old car” will make me at least as happy as a new car, which I can always get later.
Your spouse, your kids, your unborn descendants… all will be impacted by the choices you make with regard to spending and investment.
Somehow, searching my way to that title popped up Tim’s Blog on being famous. The blog has a Bill Murray quote about fame, “try being rich first.” The blog is an interesting read, by the way.
I’ve spent a lot of time with rich folks.
“Rich is better than famous?” – that didn’t feel right to me but, heck, Bill Murray knows more about both than me.
Here’s what I’d like to teach my kids… rich is a trap.
For yourself => the never-ending treadmill of personal spending and consumption => a trap of more.
For your family => if you’re lucky enough to see your way through the hoax then you’ll have to convince everyone around you to modify the lifestyle to which you’ve trained them (COVID, or any external crisis, can help).
Pretty risky, especially as there is a much more useful target to give yourself.
The downsides Tim writes about in his fame blog are infringements on personal freedom.
The fame upsides strike me as an external forms of recognition, a universal desire.
The thing is, once you target external validation, you’re trapped.
External validation is a need to be weaned, not watered.
In the mid-90s, I spent a unique Christmas morning under a full moon on top of Mt Cook in New Zealand. My guide was a young man called David. On the descent, he rappelled off the end of our rope. A common accident, which had no consequences because the end of our rope was only a couple feet off the ground. The mountains got him several years later when he was killed by a Himalayan avalanche.
Roll forward a bit and I was flying into Denali. As I was landing, the rangers were dragging a body bag across the snowy runway. They flew a young man out on the plane that flew me in.
Later that trip, I was shuttling loads between camps. I was solo and approaching a higher risk area near 14K. There was a commercial group nearby and I asked to clip into their rope to get past a sketchy area. The guide said sorry, but no. He was blown off a high ridge a couple days later when his group was caught out in a storm. He’d unclipped to help a client.
My biggest ghost is the father of my dead friend, Stuart. I met him shortly after placing his young son’s casket in a hearse. The depth of his despair as been with me ever since. He gave me a hug, which felt like his soul was collapsing into my heart.
Training for an event, or striving towards a specific goal, is straightforward. Select goal, seek expert advice, simply your life and execute, while paying attention to how you get in your own way.
But what if the events are cancelled? What if the whole concept of “an event” has been put on hold?
Three key principles I keep in mind…
1/ Remember why you started in the first place. What was your core motivation before you got wrapped up in seeking external success/validation? Remind yourself of your core values.
2/ What’s your personal superpower? Where do you have the capacity to build, and demonstrate, mastery? This helps you sustain motivation in challenging times.
3/ Where do you want to be in 5 or, even, 10 years time? I laugh at myself with this one because my answer is nearly always… “the same as today, just a little bit better.” This is despite _knowing_ my life undergoes big changes all the time.
While kicking those ideas around, I also like to consider different benefits of an active lifestyle…
Physical Health // By mixing in some housework, I can rack up 12,500 steps a day and not leave my property. So I have this one covered.
Mental Health // For many of my athletic friends, this is the true driver of their program, even more so for my pals with family trees, or personal histories, of addiction. Here’s what works for me => split sessions AM/PM with a goal of never getting so tired you can’t make tomorrow’s split sessions.
Make the goal tomorrow, while having the energy to meet your non-training obligations today.
Long-term Functional Strength // If you’re under 40 then this might not be on your radar. Watching my grandmother age, then die, put it on mine. I maintain a large reserve of functional strength. Today, it’s useful in the mountains. In the future, I hope it will help me maintain independent living.
Vanity & Sexual Function // These goals can work together, or be opposed to each other. For example, a well-constructed anabolic phase, will build muscle, increase my energy and boost my naturally occurring recovery hormones. All good.
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
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..
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…
Low cost to hold
Focused on long term capital gain
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.
Given the simultaneous outbreaks we have in the US, our media is going to have plenty of fodder for negative stories this month.
If you follow the news cycle closely, then this could be a tough few weeks for you.
Consider scheduling a few days offline.
If you’re sucking in a lot of negativity then you might find spillover inside your head. The spillover may manifest as a negative voice beating you down internally.
A lot of us aren’t able to “hear” the soundtrack in our heads. As a coach, I would notice it when my athletes had a habit of negative expression in voice and written words.
To counter a habit of negativity, I’d assign an excerise => buy a small notebook and end each day by writing down one positive thing that happened.
Every single day.
Life happens where you focus.
Change your focus, change your life.
Our Science Fair was a huge hit.
Spoiled is when you think your life is difficult but it isn’t.
Living under COVID is difficult in many ways. We are learning to embrace and enjoy our challenges.
It would have been very difficult for me to engineer rapid positive change without the challenges of closures, home school and social isolation.
Personal responsibility is a key value of mine. In the past, this was to the exclusion of maintaining relationships. My kids have helped me do better with finding a balance between hard and soft skills.
Lots of personal responsibility was on display this past weekend: packing our own gear for a climb, learning to recover from a deep bonk (with grace and without blaming anyone), taking care of siblings.
The habit of having to take care of ourselves at home is spilling over into our larger lives.
Money and Kids
An unconditional allowance set at $1 per week, per year of age
Money sits with Bank of Dad and yields 10% APR – I want my kids to get very excited about compound interest – we have a generation of kids growing up in a no-yield environment – this will have a HUGE impact on our societies – don’t know specifics but do know it will change finance for a long time
I hold a veto on any spending out of the “allowance account” – there is no obligation for me to be reasonable – if you disagree with my decision then…
Buy it yourself, kids can earn their own money – own money equals own choices – I want my kids to get excited about providing value to others and earning money for themselves – this is much more important to me than winning in sport
Summer reading prize – read every day across the summer and get a very good prize – it costs me $100 per kid, per summer, to create a habit of morning reading, without being asked!
The incentive structure has been successful.
Our latest addition is babysitting – our oldest taking care of our youngest. We’ve settled into $7 per hour for the oldest with $2 per hour to the youngest at the same time. We give them a written schedule with some easy chores to complete. This is the easiest “kid combo” for us to manage – the older sister/younger brother dynamic hasn’t been figured out, yet.
Another popular product is exterior cash wash at $5 per car, per kid.
Our oldest makes scrunches, masks and children’s stuffies. Orders, pricing, manufacturing, delivery… all sorted by her. Since school ended, she is averaging $75 per week of supplemental income.