Tag Archives: personal planning

How I Do Email

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gmailFive years ago I took a two-week vacation and came home to 1,500 email messages. I spent 20 hours clearing the backlog and realized that something had to change.

My system will give me an extra 250 hours per annum – for the rest of my life.

If you’ve ever wondered where you could find-the-time then email is likely your greatest source of increased productivity.

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#1 – I started by switching to gmail

#2 – When an email arrives I have four choices:

  • Delete
  • Deal with it
  • Unsubscribe
  • Action

Delete – end the thread and do the world a favor

Deal with it – anything in your life that takes two minutes, or less, to complete… Do It Now – remember you’ve already interrupted yourself by checking email

Unsubscribe – this is a pain in the ass when you start – there’s so much coming… however, after five years I average less than one unsubscription per day.

Action – for items that require clear thought, or take more than two minutes, move to your “action” folder

#3 – Once a week, go top to bottom in your action folder

  • Give people what they need – no more
  • If It takes more than four lines then be sure to save your work – FAQs, blogs, article ideas
  • You have a limited number of keystrokes in your life, don’t waste them, or someone else’s
  • Any message that was in the action folder the last time you went through, make an appointment in your calendar to deal with it and delete. If you blow off the appointment then it wasn’t important

Learn to use filters so high volume senders can be automatically sorted to a directory and dealt with as a batch.

Teach your high volume senders to reduce their emails to a single message that you can deal with efficiently.

One-on-one email interaction should be priced at your highest rate per hour. Remember that it is your lowest reach method of communication – you’re only reaching one person, max.

#4 – Learn gMail HOT KEYS – worth another 10-25 hours a year

  • J – forward to next message
  • K – back to previous message
  • Y – remove current label
  • R – reply to sender
  • A – reply all
  • O – open
  • [tab] return – send

It’s worth the pain to change.

The Money Value of Time – Personal Pricing – What Am I Worth

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This is a useful calculation for time management.

Print this page out, write your answers beside mine, don’t think too much!

Annually, I make the calculation at the level of Business, Family, Household and myself.

Today, I share the calculations for my consulting business.

Start with time:

  • How many weeks a year do you want to work?
  • How many days a week?
  • How many hours per day?

Weeks * Days * Hours = Billable Hours

That’s the time that you have in a year to generate revenue.

What should you charge per billable hour?

Desired Net Income + Overheads = Gross Revenue Req’d

Gross Revenue Required / Billable Hours = Rate Per Hour

A case study from my 40s to illustrate:

Screenshot 2014-12-16 09.13.06

The first column was my 2009 goal for my athletic consulting business.

  • Generate $5,000 per month net cash contribution to my family
  • One week per quarter spent training alongside the team
  • Four hours of focused work per day
  • One day off per week

The second column was reality, and it was a good life.

  • Work every day
  • Discover I can only be productive for three hours per day
  • Take two weeks off and return to 1,500 email messages – realize that I can’t “bill” for my email inefficiencies!

The third column is a goal for my 50th birthday.

My goal either seems small, or large, depending on where you’re at.

It helps that I work for people that “bill” at large multiples of my target.

  1. Understand: Your average billing rate is your new minimum
  2. Vow: I will stop doing low-value work
  3. Consider: Where can I deliver 2x my billing target in value added

Can I be 3x more efficient than a $35 per hour coach? Yes. The two-year transition was painful but I got there.

However… when I arrived at the middle column, I needed to make a decision moving left (for a little more time) or moving right (for way more time).

Increasing my value added per hour requires more than simply guiding exercise. Shifting towards far greater value added makes sense.

How much of your time is spent on what brings satisfaction to your life?

The table below came from a recent coaching clinic – I asked the coaches why they coached.

why_coach

In business, family, love and parenthood…

What’s your why?

Share experiences with the people that love me.

The Season of Giving

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3_kidsI’ve been reviewing next year’s family budget. There are four categories where I have a lot of discretion: donations, date nights, couple retreats and vacations.

Donations/Gifting: Halfway through year, it was looking like I would have to borrow to maintain my preferred gifting rate. I hate borrowing so I cut the budget in half.

Late in the year, we sold our house and I was able to hit our original goal.

It wasn’t until I played The Dollar Game that I started to understand the physiological and psychological benefits of being open to other people.

I like having a formal budget. I never have to consider if I can “afford” to be open to another person. I know that I can always help someone, at least a little bit. As well, when I feel that I’ve been ripped off, I tell myself that the money came out of my gifting allocation and I move on.

Vacations: For a long time, I’ve wanted to ride my bike to the top of Haleakala in Maui. At an elevation of 10,023 feet, the volcano is a biggie.

So I added a Maui vacation to my 2015 budget.

When I ran the numbers for airfare, childcare, condo rental… climbing the volcano was going to cost me close to $1 per vertical foot.

My Colorado price per vertical foot is a penny!

If my goal is satisfaction and a life with meaning… is the Maui trip the best use of the money?

Does short-term luxury lead to satisfaction across a year? Maybe if I take a lot of pictures!

I made a list of alternatives…

  • Get 2,000 $5 notes and play a massive $5 version of The Dollar Game – gets rid of my worry that a dollar isn’t enough to help – that’s a big stack of cash
  • Sponsor 100 people for The Dollar Game – I ruled that one out because the effect doesn’t seem to work with someone else’s money
  • Build 15 homes in the developing world
  • Overtip all year – feel like a big shot – own the fact that my desire to climb the volcano is the ego-picture from the summit
  • Sponsor a teaching assistant for my daughter’s kindergarten class so the little people learn more quickly – guaranteed kudos
  • Buy 30 iPads for the school – additional kudos, perhaps more if done anonymously, to appear humble
  • Increase my giving budget – open my heart more often, to more people

Once you start frequent, small gifts – it turns out that the person that you’re helping the most is yourself.

I don’t regret my inefficiencies. I’m sure that I’d love the trip to Maui.

Luxury spending doesn’t have the staying power of an open heart.

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My original article on The Dollar Game and a follow up one year later on giving.

More on Couples Retreats and my marriage – Article 1 and Article 2

Behavior Not Protocol

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winterIn any given field, the bulk of our performance comes from choosing appropriate behaviors rather than optimizing protocol.

Take wealth, I’ve been reading a second book by Nick Murray and he makes the point that behavior is the single greatest source of wealth creation. He goes further to make the point that it has a greater impact than all other factors combined.

In reading the book, it struck me that he could easily have been describing athletic performance.

  • Balanced program
  • Frequent small contributions towards the goal
  • Most people beat themselves
  • Train yourself to overcome human bias and misjudgment

For every wealth behavior, I can find a similar fitness behavior. Works the same with common errors (selling in fear, chasing performance, not resting, fear of fatigue).

Looking forward to 2015, what behavior is required to achieve your goals? Don’t focus on more than three.

What are the most common mistakes that “everyone else” makes in seeking similar goals? Individual experience is a mirage. What are the most common errors made in my field? How best to create a system so I avoid repeating the mistakes?

Regardless of your field…

  • One small daily step – keep chipping away
  • Drive experience inwards – take all external irritations and change them in MYSELF
  • Let go of non-core – our best work requires a clear mind, a clear mind comes from letting go
  • Refuse to make predictions – pundits do worse than random – stay focused on behavior
  • Spend no more than 10% of your time on tweaking protocol – the greatest returns flow from consistent core behaviors

What are the behaviors required for a life with meaning?

Health, kindness, shared experience, close to nature.

Quarterly Financial Review

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2014-11-19 13.36.43-1The way you feel right now is how a bull market impacts consumer sentiment.

  • Gas prices are down – a big psychological boost for me
  • Asset prices are at all-time highs – makes me feel safe
  • Your business is performing well – makes me feel safe

In these conditions, it’s tempting to change investment strategy and chase recent high performing assets (or managers).

We’ve decided to stay-the-course. There’s hasn’t been any major change in our life situation so there need not be any change in our investment strategy.

We’re on track to achieve our goals:

  • The freedom to chose rewarding part-time work
  • A source of income that we don’t outlive
  • Educating our kids
  • Passing capital to our adult kids when it’s time for us to say good-bye

Do you know your goals?

Do you know the behaviors that can screw up achieving your goals?

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We sold our old house in September and I implemented our strategy of gradually buying equities. We’re 34% equities so there’s been “lost profits” from having money outside of the equity market – especially when the US market hits all-time-high after all-time-high…

Surprisingly… lost profits don’t bother me, or screw up our goals, and I was relieved in October when the portfolio held up well.

Dollar-based equities have continued to outperform our international investments so I’ll rebalance by tilting new purchases towards international. Yes, I’m going to buy more of what everyone is saying will tank in 2015 (VTIAX). I have a strategy of reinvesting dividends and keeping International equity at 50% of my US equity exposure.

It’s likely that I’ll need cash flow to cover year end expenses. I will sell bond funds to raise the cash. That will bump up our equity allocation as a percentage of assets.

The underperformance of our international equities creates the possibility of tax-loss harvesting in December. Next week, I am preparing draft accounts for the different parts of my family and reviewing the cost basis of our investments. Later this month, we will decide if it makes sense to realize losses.

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We spend $12,000 per annum at Whole Foods and they are offering a 10% rebate on gift card purchases through Jan 1. They let us pay with a credit card which gives another 1% via cash back. That is an 11% return on investment, on money we are certain to spend.

We eat at Native Cafe and they have an even better offer of a 20% rebate on gift card purchases. There’s only one location in Boulder and the company financials aren’t are strong as Whole Foods. I’ll limit myself to five months worth of meals.

Even better than shopping at Whole Foods, or eating out, is staying at home and using goods purchased at CostCo. We spend $10,000 a year at CostCo and it saves us thousands of dollars.

If you don’t know what, where and when you spend then Mint.com is an easy way to track your family finances.

 

Simple Wealth, Inevitable Wealth

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Happy_EverythingI came across this week’s title via a book recommended in The Reformed Broker’s twitter feed. The author is Nick Murray, who’s been a financial adviser for longer than I’ve been on the planet!

Here’s a link to the book on Nick’s website.

The book is an easy read and the first pass through won’t take you long. It’s a good one to share with your family and discuss. My key take aways…

Volatility isn’t loss – while emotionally painful, adverse movements in asset prices only hurt me if I sell. So long as I can hold through the bottom, price movements have limited bearing on my life.

Dividends are indexed income that comes from appreciating tax-deferred assets. This point really hit home. Sample yields from my portfolio:

  • US Equity – VTSAX => 1.82%
  • US Bond – VBTLX => 2.00%
  • Boulder Real Estate => 3.30%

Both the equity and the real estate have an option embedded via the potential for capital appreciation. The value of the asset can increase (or decrease), thereby increasing my total return on investment.

Nick would say the true risk on my portfolio lies at the far end because a long-term holding of bond-type assets has zero capacity for capital appreciation – I receive return of capital, taxable income and exposure to default risk.

Dollar Cost Averaging with a lump sum is only superior when there’s a crash within 2 to 3 years of receipt of funds. Very similar to the advice Vanguard gave a friend of mine and something I hadn’t fully considered. My lump sum article was written at 5.5 years into a bull market and my holdback capital has an investment rate of 2 to 3 years.

If your goal is long-term wealth creation then you should be close to 100% equity – this is similar to Warren Buffett’s advice for his daughter’s portfolio (90% US Equity index and 10% short-term government bonds). Nick makes the point that dividend income is indexed and we can afford to ride the volatility.

Protect your family by holding enough short-term securities so you don’t have to sell into the inevitable crashes and let long-term compounding do its work.

He also has a great example of the change in total dividends and total profitability across long periods when the market “doesn’t move.” Even when share prices are stagnant, the world makes forward progress.

The book contains very little advice on investment selection because Nick’s take home point is Behavior Drives 90% of Investor Return.

This mirrors my advice to athletes – until you can do, what you do doesn’t matter. Nick’s point is we focus too much on the type of Investment and not enough on making ourselves better Investors.

The final chapter was the best – Optimism is the only Realism. The pessimists in our lives will claim that their views are based in reality. While fear, anger and pessimism are supported by our media, Nick makes the point that long-term optimism is the only position supported by the facts.

Lots to discuss with my family and I recommend it to your own.

Retiring To Paradise

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ParadiseA friend sent me an article about “stress-free living on a tropical island paradise.” The article was a teaser for a subscription-based newsletter about retiring well, on modest means.

The article got me thinking…

  • Why do I find foreign utopias so appealing?
  • What are the components of living well, particularly as I age?
  • What limits my ability to shift towards rewarding, part-time work as soon as possible?

The first thing that I remind myself is satisfaction is never achieved “out-there” in the future. My job is to make a note about the structure of my satisfying days, right here, right now.

Noticing the satisfying parts of my current life lets me define paradise on my own terms.

I guarantee that you’ll find your truth is far different than the marketing brochure!

In my own case, I don’t like to tan, I like to ride my bike uphill and I sleep best in a cold, dry room. Worth reminding myself of these points!

The allure of the tropical paradise…

  • Simplicity
  • Stress-free
  • Natural beauty

What price will I pay for my ticket to paradise? I’ve found two habits that move me away from my definition of paradise – their antidote…

Radical simplification of my life and possessions – all the crap I have in my life provides an endless stream of admin, depreciation and cost of ownership.

Aside from a Sienna Van and high-quality bicycles, none of it is useful. I’ve been chipping away for years. I get a lot of resistance from my family, and I respect their views.

Beach cruiser, surf board, and board shorts…

…I get the allure – yet know that it is simplification, not the tropics, that appeals to me.

Constantly reduce my personal needs – if you are in a high-paying field then you’ll be tempted to delay freeing yourself from full-time work until you “have enough” (to live at a standard that fits your perceived station in society).

My heroes don’t have a lot of possessions but are rich with satisfaction. Choose wisely.

If you’re delaying following your heart so that you can maintain a high spending rate then be sure spending fits your definition of paradise.

Many of the wealthy don’t enjoy spending. It’s how they became wealthy.

If the points above aren’t clear then invert and be honest with yourself.

  • Having so much stuff that I need a team of people to manage my gear, or spend a significant percentage of my life on admin…
  • Constantly increasing my personal needs via the hedonistic treadmill…

This combination, anywhere on the socio-economic scale, is a recipe for misery.

Finally, humans are similar in how we define natural beauty… high view, overlooking park land, ideally with some water.

Think about the most valuable real estate in your local market. It’s likely to have those characteristics.

Most of us will never afford that real estate, which is just another asset to take care of, anyway.

A better solution is to live beside a mountain park and get to a high view as often as possible.

What’s your definition of paradise?

bear

When 99 is more than 100

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As a young man, I spent my 20s focused on taking myself to the limit. In my 30s, I discovered triathlon and shifted my life towards a devotion to personal excellence. In both periods, I was unable to understand why anyone would bother “being average” at anything.

Whether your focus is academics, finance, wealth or sport — if you spend your time in a group that consists of the top 1% then you’ll be at risk for certain errors.

The first error is a skewed definition of “average.”

Athletics is a great field to see this in action as we’re much less likely offend anyone by telling the truth! Here’s a quote from a former coach…

He’s constantly disappointed in himself because he thinks that he should be able to roll out of bed and drop an 8:35 Ironman.

In other words, our friend has a baseline that requires him to outperform 99.99999715% of the planet.

That’s an extreme case but, if you listen to the dialogue surrounding your favorite sports team then, you can see this pattern repeating itself throughout our elite classes.

As an amateur triathlete, I could beat 98.5% of the field at any Ironman race in the world, yet my performance wouldn’t even register for the top 1% of performers, who benchmark themselves on their peers.

My point, isn’t to correct the attitudes of the elites – an extreme way of thinking is useful to drive extreme action.

My point, is to encourage you to stop and ask, “Is It True?”

When your peers lack diversity, your views are at risk from becoming detached from reality. You will see it most easily in your definition of average and decent.

  • What’s a decent athlete?
  • What’s a wealthy family?
  • What’s a successful child?

Outliers living in the 1% are unable to see the extreme nature of their lives and that can lead to ruin.

It’s not just about aging athletes ruining their joints.

I had a very close friend that ended up financially ruined because he was unable to be satisfied with being more wealthy than 98% of his peers.

Others ruin relationships with children, who are unable to measure up to an unreasonable standard.

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Another risk – the best are lazy.

Lazy?

  • …but I train 25 hours a week
  • …but I work 65 hours a week
  • …but I read 100 books a year
  • …but I add more value than anyone at this firm

My capacity for extreme workload requires me to drop everything in my life.

In fact, dropping everything is a “secret” of success.

However, it makes me very lazy outside my domain.

As the youngest partner in my private equity firm, I had staff to shop, to sort my CDs, to open my mail, to cook my meals, to take out my trash… the list went on and on. My approach was to throw other people’s time at any issue that prevented me from spending time on my goals.

Ultimately, behaving like a plutocrat wasn’t the main drawback.

By not placing “love” as a primary goal, I created a pattern of behavior that would have driven every relationship from my life.

It wasn’t until 15 years after my divorce that my family received the dividend of a man becoming a little less successful and far less lazy.

Renewing My Vows

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ax_leavesHopefully, I’ll be around so my actions teach my children this post before their first kiss.

If not, then I leave it to point them in the right direction. Read it to them annually, at graduations and at their weddings.

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Have you ever heard couples discussing their wedding vows? Perhaps wondering if they should include “honor and obey” in the words they exchange? That seems silly to me because it overlooks the essential components of EVERY long-term relationship.

What follows is how I try to live my marriage, and through my marriage interact with everybody. It wasn’t always this way – as a young man, my greatest weakness was a lack of compassion and an inability to see the second order consequences of my habit of hurting other people.

What are the most important ways that we honor each other?

First, and most importantly, is a commitment not to hurt other people.

Relationships fail when we get caught in a cycle of keeping score, tit-for-tat and not breaking the chain.

We don’t even need to be in the same room with each other to perpetuate this cycle. When I hear about marriages through third parties, I can feel the pain that the couple is creating for each other.

So I offer: I’ll do my best not to hurt you and ask that you forgive me for the many times that I’ll fall short.

Small children understand forgiveness instinctively. Each morning, I get a fresh start and, hopefully, I see each morning as a chance to get a little better than yesterday.

Now, my children will be like me in many ways. This means that they will arrive at adulthood with habits that will torpedo their relationships if not addressed. The most toxic of these habits is enjoying subtle retribution and justified anger.

So I offer: When I feel pain, I know it will be because I you have touched one of my many limitations. I vow to turn that knowledge inwards and try to make incremental progress.

I’ve been married for close to a decade. By chipping away a little bit each day, I make progress and, together, we strengthen our marriage.

It is my improvement, not my position, that makes me fit for leadership, and shows that I’m worthy of being honored.

Being honored for experience is great but being forgiven is much more valuable than being honored.

In a successful relationship, my errors are forgiven, rather than acting as triggers on top of 5, 10 or 15 years of repressed, mutually reinforced pain.

My dearest, I promise that I can handle the truth.

In life, we are tempted to protect others from the truth. This is a mistake and you will find that your strongest relationships are built on being open. In sharing our individual truths, we can work towards understanding what rings true as a couple.

The wisdom of these lessons becomes clear when you invert them.

Relationship failure is characterized by retribution, blame outside of myself and suppression of truth.

I failed many times before I learned a better way.

In order to shape my reality, I started by accepting it.

Chose wisely.

Being Good Enough – work finance family

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The concept of “good-enough” is essential if you are prone to worry, or if your inability to be perfect prevents you from trying to improve!

Because anxious people get an emotional charge from worry. It’s a tough habit to break!

  • A good-enough mother, father or caregiver
  • A healthy-enough approach to diet and exercise
  • A focused-enough approach to your main vocation (parenting, teaching, coaching, business, sport)

As a Dad, my kids are overwhelming. I was forced to let go (of the unreasonable expectations I set for myself). What enabled me to shift was considering my family’s needs… Do my children say they love me? What does my wife say about my marriage? What happens when I’m not around?

In my work and financial life, it’s easy to endlessly tinker – seeking to optimize a situation where constant change is proven to make things worse, rather than better. My best outcome is to crease a simple solution, that’s good-enough, and limit my ability to screw things up.

What to do? I recommend that you don’t take specific advice from me. Find what works for you. However, I share the specifics of what I do because the simplicity of my approach is a useful counterbalance to the complexity that’s sold to us.

Act as if the goal of the financial services industry is to separate you from your money and run from from any advisor that’s not bound by a fiduciary duty to act in your best interest. Be aware that even the fiduciaries are prone to making money at your expense.

Next, focus on the four things that truly matter

  • Save – live on less than you earn
  • Fees & Expenses – low-cost passive indexing gives you a big edge
  • Dollar-cost averaging – create a strategy that runs on autopilot and get on with living
  • Be Able To Hold Through Dips – never extend yourself, live debt free, be able to hold through unexpected unemployment

At times, you may need expert advice for:

  • Wills, Estates & Trusts
  • Tax & Accounting
  • Pensions & Retirement

The rules on the above vary by country and state. Get advice on a fixed fee basis and expect to review every five years.

What about portfolio? I aim for something that’s “good enough” and spend my energy staying focused on the tips above (save, low cost, buy a little bit frequently, be able to hold). The more decisions I have to make, the greater the scope for human misjudgment.

I do best when I focus on what I directly control:

  • family annual cost of living
  • new investment rate
  • cost to hold my portfolio

However, what to do about my house? That’s a key asset for most families. Here’s what I’ve told my family council. If I’m gone then help my wife get to…

  • Personal residence (10%)
  • US Equity Index Fund (30%)
  • Int’l Equity Index Fund (30%)
  • US Bond Index Fund (30%)

For the young people reading, the 10% constraint means that it will be a long time before you have enough equity for a down payment. That’s a good thing! I waited until I had 20 years living expenses saved, and had watched two recessions from the sidelines.

One of the neat things about triathlon is the ability to be very good at something by combining good-enough performances in each of its components. With three kids and a young wife, something had to give – from the self-centered approach of my years as an elite athlete.

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The financial stuff above is based on a short eBook called, If You Can. The book took me an hour to read – you should read it.