My favorite bit was his advice to stop talking about the trolley problem, just slam on the brakes.
Also liked his advice that we shouldn’t expect machines to be able to solve problems, say ethics, that we can’t solve ourselves.
Fairly quick read and the book gets better as it progresses.
Changing gears from finance this week.
This is a really fun read. Rory’s style made me realize how much I missed both the UK and my pals in advertising. I loved my time in London and he brought back many good memories.
One of the most useful things about folks-like-Rory is they focus on what works. Rory’s book is packed with entertaining examples of things that work, but aren’t logical.
The more linear your thinking, the more you’ll benefit from this book. I needed to be reminded of the lessons inside.
Also – pay close attention to the layout of the hard cover version, especially his use of headers/font/footnotes/icons. The presentation is best in class.
In personal news…
Boulder County is one of the least infected places in the state. The college kids came back and our positives have continued to decline. It’s winter, most aren’t wearing masks in the neighborhood and… nothing, go figure.
COVID defies prediction.
Our school district is looking to get the middle/high schoolers back to 4-days a week (from 2) after March Break. So starting March 29th. Schools open for students, luxury.
Personally, I think we should be opening up a little quicker but support the delay to give more time to get the most vulnerable a chance to get vaccinated.
Based on my peer group, there is some connected-party vaccination happening in priority to our at-risk population. It’s the most simple way to explain the disconnect between doses into our community and the continued waitlist for the 70+ population.
I was happy to read about teachers getting vaccinated direct from their school district.
A bump in my training load (my first “real” training since September), means my 3:45am wake up has proven unsustainable.
With my daughter’s evening swim practices, I was having to double-nap (most days) to make it through the week.
I shifted to 4:30am starting last Saturday, luxury.
As this publishes, I will be heading to Arapahoe Basin to see if the Steep Gullies will go. Our first venture into hike-back terrain, we brought our skins.
Hopefully, you get a chance to be outside this week.
Enjoy 2021.
Between summer day camp and the school year starting mid-August, I’ve had two months of a relatively quiet household.
I used this time to re-read Taleb and Munger. You can find my full notes here.
My initial purpose of re-reading was to figure out “what to do.”
It is far easier to be certain about what NOT to do.
Do you know what can ruin your family’s life?
I do.
What is your list?
Assets and spending do not create a life with meaning.
My true job is keeping our cost of living down so we maintain the ability to control our schedules.
We discuss case studies at home. Housing, vacations, cars, the endless “needs” my kids and I dream up.
So while I’m removing things that can ruin me, and beating down my hedonistic tendencies… What to do?
Wait for the fat pitch.
A key benefit of a good position is being able to wait until the credit cycle swings in your favor.
The longer we have to wait, the better the opportunities. Cutting rates, running trillion-dollar deficits at the top of the economic cycle… there will be great deals eventually.
I’m not excited about any asset class right now.
I’ve decided to make no material new investments. We are going to periodically rebalance and I am going to reduce my cost of living.
What to do?
Enjoy nature with my family and pass my value system to my kids (by living the life I wish for them).
I started waking up earlier, kept my mouth shut and watched a cascade of positive effects roll through my house.
I got the idea after calling myself out about my self-prescribed sleep “aids” and from Jocko’s book.
The hook in Jocko’s book was his observation that 4:55am is more than ten minutes better than 5:05am.
I began to wake up in the “4s” in February. After two weeks my body adjusted and I don’t need an alarm to do it.
Monica asked me “why” => “All I was doing was scrolling social media for 90 minutes after the kids went to sleep.”
I was wasting a key advantage => I need less sleep than my kids.
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The game is “do whatever before 5am then one useful task.”
As the family wakes up… it’s on and I’m drawn back to the family (sometimes from the middle of a workout).
Jocko’s point –predawn is the only time we truly own.
Other tips…
If you want to go to sleep then wake up – same time every_single_day – with travel, I stay on my home time zone.
I always have a cushion of sleep available by going to sleep at the same time as my kids and waking up at the same time as usual.
Four recent reads.
A neat concept from Pasricha is to view a week as three bins of time.
The author encourages us to have a look at our allocation. Here’s mine…
When I bring energetic action, time and expert instruction to an area of my life… I get results.
If it’s not happening then it’s not a priority.
Better to tell the truth — especially to myself!
Younger Next Year was written for Baby Boomers but I found it entertaining and useful.
Around 2030, I’m going to have a 40-hour slice of time land in my lap. Leaving my desk job in 2000, I have been through much of the author’s story. What I haven’t dealt with is aging and decay!
This winter, I learned to ski well. Learning to ski was humbling — I found myself lacking in absolute power, power endurance and quickness. Add that experience to the gradual deterioration of my vision. Aging and decay!
Through an explanation of Harry’s Rules, the book reminded me of other potential gaps in my life — connection, commitment, passion.
“Kids” have taken a big slice of time in my forties. Because we’re likely to have another 15,000 hours to come, I’ve been working on up-skilling everyone.
Some day the “kid” slice will be gone. My marriage will remain.
The two books by Gray (as well as The Soul of the Marionette) were fabulous and challenged the narrative my local community tells itself.
When I’m doing, connected and engaged…
…I don’t overthink any passing emotional state.
It’s worth making an effort to fill-the-gaps.
Last 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.
HUMILITY – 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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PARACHUTES – 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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EXPECTATIONS – 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:
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.
Part of being human is a tendency to over-react to small losses.
As this error has cost my family (big) money, I’m going to share a case study that illustrates the point.
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One of my jobs is to manage a small portfolio of local real estate. From time-to-time items come up that need to be sorted. Each of those items represents a small dose of unexpected pain.
In most years, there will be a dozen items that require action. Total cost of these items is on the order of one-month’s living expenses.
To give an idea on scale of the “pain”, the portfolio is worth ten-year’s living expenses and, annually, it generates cash equivalent to seven-month’s living expenses.
Combining the above, you could calculate that the portfolio has a cash yield of ~5% on net realizable value.
When compared to all of the alternatives, this investment is one of the best places to invest.
But the random, little bits of pain hurt — jammed sewer lines, flooded basements, six-foot high marijuana plants, missing tenants, leaking toilets… none of this is unusual, or unexpected.
The small doses of pain hurt so much I’ve been considering selling the portfolio and switching into a less attractive investment.
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To escape the small and random pain, I am willing to accept certain, large and immediate pain! A discount on market value and payment of significant tax liabilities. The total cost would be more than two-year’s living expenses.
In a fantastic investment, with less attractive alternatives, I’m willing to pay 25x more than the cost of the pain to make it go away.
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Rather than pay two-years living expenses to make the pain go away, I’ve hired a property management company to insulate me from the pain.
Annual cost is 0.6% of net realizable value and less than a month’s living expenses.
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Beware of quick reactions triggered by small, negative surprises.
They are often irrational.
Rich Roll and Julie Piatt have a new book, The Plantpower Way.
I loved it.
The book reflects a way of life Rich & Julie are seeking to bring to their marriage and family.
At it’s heart, “The Way” is similar to what I’m seeking to offer my own family.
However, my home life doesn’t involve tranquil meals after a serene afternoon shopping at the local farmer’s market…
So, I caught myself muttering there’s no way their life’s like that…
Then I started laughing.
I was laughing because their reality doesn’t matter and, like Rich, my reality is far removed from the craziness of years past.
The book is filled with proven advice:
If you’re already preparing meals then this is a must-have resource. The recipes are simple, quick to prepare and taste great.
If you’re not preparing meals then start by creating a habit of eating real food. After 20 years of better choices, I arrived at three basic meals. Nutritional liberation doesn’t require complexity.
If, like me, you find yourself intimidated by the thought of 100% compliance then remember weak implementation of plant-based nutrition offers strong results.
Rich did an AMA that lays out the basics of his philosophy. His humility, tolerance and lack of dogma shine through. It’s a refreshing read.
Practicalities:
Understand why you are motivated to make-the-change.
If you can transcend your (food) choices then you will have a roadmap to apply throughout your life. Letting go (of animal products) may be similar to releasing ourselves from other habits.
It takes courage to live an open life.
Respect to Rich & Julie.
Three questions for your next family meeting, or your financial adviser:
Today, I’m going to take you into the future of your retirement, your children’s retirement and your grandchildren’s retirement.
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Retirement
If I make it to 63 then my wife will be 55. At that point, there is a 50% chance that at least once of us will last another 31 years. Here’s a calculator that you can use.
It’s worth repeating – as a couple we have a joint life expectancy of 31 years when I reach 63 years old (17 years from now). Today, my wife and I have a joint life expectancy of 47 years.
That’s a heck of a long time for inflation to act on our cost of living.
Inflation of 2.5% for 47 years brings each $10,000 of current expenditure up to $31,917.
In other words, despite being middle aged, our core cost of living is likely to triple across our lifetime.
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Children
The joint life expectancy of my daughters (6 and 2) is 90 years. Their cost of living is going up 8-10x over their lives.
Can I insure against the risk that my surviving children run out of money late in life?
Let’s look at a case study.
At the end of last year, I was considering an expensive vacation. I couldn’t justify spending the money on myself and the calculation that follows is part of the reason.
As a family, we can make the decision to invest $10,000 per annum. There would be no impact on my quality of life.
What could it do for my children?
Let’s talk in 2015 dollars. I have no idea about future inflation, let’s assume 2.5%.
In case I’ve lost you.
The payment is calculated with 5% rate of return, over 30 years, with $763,379 starting value.
It’s never “too late” for compounding to work for your family. I’m closing in on 50 and can leave a valuable form of insurance to my children by changing my current habits.
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Grandkids
Run the exact same scenario except I have 85 years to grow the capital.
30 years of $90,705 per annum in 2015 dollars ($1.4 million of present value, 5% rate of return).
It’s worth the effort to learn finance and tweak your wealth behaviors.
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This post inspired by Nick Murray’s book, Behavioral Investment Counseling
Link to a google doc that let’s you tinker with my assumptions. Make a copy before editing.
I came across a finance blog asking about the limits of statistical proof in the world of investing.
It reminded me of an old surgeon who shared, “Half of what I learned in med school turned out to be wrong.”
So I ask you…
What do YOU know but can’t prove?
You may talk about your faith.
But for me, the lesson runs deeper.
What is the ONE thing of which I can be certain but can’t prove?
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I start by asking myself, what did my grandparents believe that we now know is false?
I came up with smoking and trans fats. You’ll probably get a more exciting list!
Anyhow, the lesson isn’t to switch margarine brands…
The lesson is to be skeptical with my own beliefs.
I can be certain that some of what I now know will turn out to be incorrect for my grandchildren.
However, I can’t prove which of my current facts are incorrect.
I can only be certain that some of my knowledge is wrong.
So I should be careful when I find wise people on both sides of an issue.
I might be best served by acting as if they were both right.
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This article influenced by Russell: Sceptical Essays (first edition 1928!).
The Lindy Effect is a good way to sort knowledge. The longer an idea lives, the greater its life expectancy.
Feel The Byrn 
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