- Building the capacity for One Big Slow Day
- Review of Longevity… Simplified
- Training Zone Lingo
- Effective Nutrition
- Remove One Thing
- Before Swimming Harder Try This
- Getting Mentors Interested
- My Home Gym
- Late-Season Peaking & The Need To Do
- Zone 2 is Light
- Training Nutrition Thread
- Where to Spend
- Sub-max Benchmarking with Power
Top Five Threads
- The 1st step is EASY
- Bike Session (30/30s and Power Singles)
- When you feel you are behind financially
- Give your Self something useful to Prove Right
- I’m back on Strava // Post_COVID week summary
High Performance Habits
- Jim’s Series of Thinker & Prover can change your life
- Related to Jim, Top 2 Parenting Tips
- Self made, great listener, valued friend (Admiral Jonser)
- Books for what they don’t teach at Business School (at least mine)
- ABC – How To Help A Friend Change His Mind
- Help your kid find a way to win & link work-to-results
- How to blog a book
- I Study Successful People (I disagree with)
- Who to work with, and why
- Iñaki on his Why & Pro vs Elite
- Live an Open Life with Brad
Workouts & Working Out
Do you ever feel you are behind? That you don’t have enough? That you might run out?
What to do?
Make vague feelings real by writing down some specifics.
Then get to work.
ONE => Is this a Reference Set issue?
If I spend time in Aspen then my “needs” escalate, and my self-assessment “declines.”
Same deal in Boulder, but it’s from a fitness point of view.
Others might have vanity triggers in places like LA, or on Instagram!
Feelings are sensitive to environment. The same life, done somewhere else, will be different.
Feelings of envy, fear and anxiety are sensitive to images – careful with environment, turn off cable news, get off Facebook/Instagram.
TWO => Is this a Skills issue?
A 35 yo surgeon with $250,000 of education debt, is in a different position than most. The surgeon is likely to earn themselves into financial security.
- Where does my current job track lead?
- Do I need retraining?
- Armed with additional skills, it is easier to move up the income ladder?
- Do I need to do the same job for a higher bidder?
- What is the market rate for my skill set?
THREE => Is this a Spending issue?
It’s not always spending… but sometimes it is, particularly when spending isn’t generating satisfaction.
If you have the skills & the salary, but are left feeling uneasy, then a family financial review can make sense.
These discussions are HIGHLY emotional. I recommend a skilled facilitator.
FOUR => Is this a Time Horizon issue?
Back to the surgeon… highly skilled, employed, spending under control… the situation is going to play out just fine.
- Pay down debt
- Keep spending in check
- Conservative monthly investment program
15 years along, the family is in a strong position. They had doubts, I did not.
I was asked, what would I have done?
Starting over at 40 yo
Core Job matches my highest paying skill set. Medicine, tech, finance, aviation… track into something that pays well.
The Core Job enables me to borrow long for a Core Investment. Buy real estate in a zip code with great public schools and a diverse local economy.
Secondary Job in an area of personal interest. It’s what many do with coaching/consulting.
Side Projects with Equity Upside. I would be looking for opportunities to invest (primarily time) in situations with financial upside. Do enough of these and something is likely to hit.
One new skill each year – coding, online marketing, blogging, video content, copywriting, language, ministry, education, graphic design, photography… stacked across a decade… powerful.
- Core Job
- Secondary Job
- Equity Upside
- Continuous Learning and Skill Acquisition
I have a friend, who did all of the above.
- Around 40 yo, they were divorced
- Then their employer went bust
- Then they found our their pension had invested in the employer
- So the pension went bust…
Long story short, a rapid journey from “set” to “f*%^ed”.
They could see “effective net worth” was negative due to financial obligations related to the divorce.
What I saw for a decade…
Three jobs: two of the jobs had flexible scheduling. Time off was used to work continuously (7/52/365). The third job was consulting, which was done inside the daily gaps.
Modest spending: given the income rolling in, not much went out.
Heavy investment: every single month, buy financial assets. Take overtime, buy more. Bonuses and financial windfalls, buy more. Buy, buy, buy.
This path isn’t for everyone – it comes with a cost in terms of family life. You need a spouse, who is completely on board. It’s a team effort.
A decade of grinding and the family is in a strong position. Now, the challenge may be to shift away from financial assets and build multigenerational Human Capital.
Think deeply about Reference Set
- There is a weak link between financial assets and life satisfaction
- We never get time back
- Too often wants are driven by external influences
- Know what feeds your soul – write it down, take your shot
Make the target clear to yourself – for me => an active, outdoor life sharing experiences with friends and family
Stay on target.
- I Allocate Money to Create the Wife & Life I Want
- Late-Season Peaking
- Swimming better & my return
- Buddy Runs for ultras & heat
- Fast Amateur SwimRun Training
- Breaking the negative spiral
- Less than 100 days each Olympic Cycle
- 12 Books to Read in High School
- Iñaki and I are connected through space & time
- All choice is relative to what’s not chosen
- How I play Twitter – know your why
- Stay below the point where I become the problem
- Mix team members to avoid cliques
- Life is never all green lights
- Teach portion control, avoid sugar reward cycle
Workouts & Working Out
Group your spending into buckets:
The most “costly” part of the pie is whatever you happen to believe is “essential.” It usually doesn’t feel this way => you truly believe you need this stuff. I feel the same!
When you suffer your first serious setback, you’ll be surprised how little is essential. In 2009, I cut my “essential” in half, overnight.
Similarly, as we age, we may find we were giving time, money and attention to things that don’t seem to matter anymore.
Know your buckets – they will help you think more clearly.
Remember => I think of wealth in time
Specifically, Net Worth expressed in “years spending.”
$1,000,000 / $125,000 = 8 years
As we change the spending, we change the years.
Risk, and INFLATION, are easily mitigated when you understand how easily you can change spending.
Risk Concept => not all spending, or financial obligations, are created equal
Be most aware of:
Debt, including contingent – an obligation where non-payment can force the sale of an asset
Spending that comes with spending – large HOA/Club fees come to mind here – put plainly, a hotel visits feel just the same on an ego, yet, don’t require an annual membership fee
Going further => Don’t Capitalize Luxury Spending => the “luxury bucket” from above, if you turn it into a capital obligation then it can bite you, especially when combined with debt.
We don’t need to own the hotel to receive the services offered to a guest.
Same with… plane, waterfront, ski chalet… whatever you find inside your “luxury” bucket.
Staying flexible with the ability to stop spending can feel like a “waste” – even more so when highly-leveraged peers appear to be making easy money.
This feeling is false!
- We over-estimate the value of current spending
- We adapt very quickly to any level of spending
- We notice changes, not absolutes
You are paying for the flexibility to: (a) stop paying; (b) change your mind; and (c) keep your capital invested productively.
Also remember, the generation that follows will build upon your spending.
This concept is important as we age:
- We will want to spend on different things
- We will want to “do” different things
- The generation that follows us:
- they will INDIVIDUALLY want to spend differently
- they will certainly want to do different things
- they will have a thirst for more
For your future self, and your legacy, give maximum flexibility to change.
You will most certainly change your mind later.
This series has been about learning from those without financial limits:
- Who do they share their best moments with?
- What are those moments?
- Are we missing out?
Once I’m on the inside of the team, I notice that my risk preference is the lowest in the group. Frankly, not surprising when you are rolling alongside extreme skiers and mountaineers.
Here’s something about risk. Group risk rises to the level of the MOST risk tolerant member.
It’s why my investment committee has the rule “most conservative carries the decision.”
Anyhow, with two young kids and a pregnant wife, I had learned what I could and wanted to put more time into my young family.
So I opted out.
>You firing me?
>>No, most definitely not. There is no way I will be able to repay you for what you taught me.
…and off I went for a decade.
Once again on the road less travelled.
Not over, yet – most of them took up Skimo.
Best Days are defined by shared outdoor experiences with a small number of close friends – building memories that last
Peers & Teachers have a mix of kindness and competitiveness => notice this combination when you see it. These are people who tell us the truth, push us to do better and keep us grounded.
There’s nowhere to get to => I realized that between my wife, and my kids, I could create my own inner circle. A circle where we share Best Days and reduce our collective risk of ruin.
I remain grateful for the opportunity for a look behind the curtain.
G – Literally Just listened to your catalyst podcast – excellent!!!! Wow, truly good – thank you for putting that out there. I took 8 pages of notes and I have already read your writing for decades
- What’s the implied land value of the house next door?
- Mega Thread recommending Just Keep Buying (book)
- Part 2: Observations from the well-adjusted rich
- Strong HIRE signal
- Don’t wait too long – when to spend
- Giving my family an incentive to tell the truth
- How to assess your physical health
- How long to see progress?
- Parents: what’s your exit strategy?
High Performance Case Studies
- Pictures & Protocols of what/why I eat
- Intensity Domains (w/ video link) added to Zone thread
- Kiwi Training Secrets (Heavy Domain muscle group transition training)
- Race nutrition and Hydration for/from ultra champions
- Testing Your 1st Threshold
- Choose, Change and Sustain – foundations of movement
- Introducing Core Pace as a concept
- Doc Hellemans continues to redefine aging
- Mega thread: Getting Strong at 53
- Intro to Metabolic Flexibility (read the article)
- Gerry on Hierarchy of Sports Performance
- Coaching Manual I Wrote in 2004
- My bike lactate and Rx
- Link not required
- Your ability to not-eat doesn’t limit performance
- Eliminate binge triggers
- Heart rate indicates stress & lacks a metabolic component
- There is value in every sustainable protocol
- Act as if personal finance is a game where you only get ten tickets to play.
- Invest as if you are holding a checkbook with only a dozen checks inside.
- Speak as if you’re holding a six-shooter, is it worth one of your bullets to make the point that’s on your mind.
I’ve been hearing versions of the above my entire life. It’s been great advice and encouraged me to:
- Slow down
- Resist the urge to interrupt compounding
- Keep it simple
- Focus on the big decisions
- Treat small movements like noise
So, we started your kids with the allowance game.
Then, we moved onto discussing the family’s allocation of capital towards education.
With that, we considered the impact, across generations, of borrowing.
Teach your kids their financial lives will be about no more than a dozen choices.
Here are mine:
- Study finance (class of 1990)
- Save 50% of my take home (1990-2007)
- Partners investment scheme (late 90s, all in then, equivalent of 1 yr spending now)
- Work to build a startup (2000)
- Sell into the frenzy (2005-2007)
- Move into a low-cost Vanguard portfolio (2008 onwards)
- Boulder real estate (2010 & 2012))
- Downsize (2012-2013)
- Borrow long at 3.25% (2013)
- Debt free (2007 & 2020)
- Have kids with a kind woman from a humble background (on going)
Every other choice turned out to be noise. What to do?
Focus on actions, not outcome.
What does that really mean?
Do what moves you forward and have faith. Sport, marriage, money, all things… daily action is the fundamental force moving you towards “better.”
Education matters => I was given a chance in Private Equity because I had high marks in a useful field. Between my high school graduation (1986) and my youngest’s (2031) the nature of “useful” will have changed. However, the need for skilled people to “do” will endure.
The most useful part of my degree wasn’t finance! It was financial accounting, programming and mathematics => I learned fundamental knowledge in college. I learned my profession on-the-job. You learn the valuable part by doing work, for the best people you can find.
This keeps popping up over and over again (professors, partners, coaches, mentors, twitter follows). At 53, I’m learning from people less than half my age! Do work to learn.
Avoid Ruin => studying, then working in, financial accounting helps you learn when a situation doesn’t feel right. Embezzlement is an old game and it’s useful to learn the patterns. Financial fraud happens, and will continue to happen. Take steps to reduce your family’s exposure to ruin.
With the accounting, I learned the most with 9 credits spread across three courses. Financial Accounting 1, 2 and 3. Small investment, huge return. Do it when you’re young. Being forced to rely on others to do your financial math is a disadvantage that will cost you.
Let’s pull it together for you…
Starting your working life (in a useful field, with your financial accounting courses done)…
You are at least a decade away from making the shift to lifestyle sustainable, so you focus on:
- Learning by doing with the best people who will hire you
- Saving – get that first $100K banked, you will be grateful when you’re older
- Waiting for the fat pitch – once in a lifetime investment opportunities happen once a decade
- Turning yourself into the sort of person you’d like to marry, the friend you’d like to have, the parent you aspire to be => meaningful connection is true wealth
Your mind will try to trick you into thinking it’s the investment choices that matter.
It is not.
It is the four habits I outlined above, and avoiding substance abuse.
I am going to show you how to connect spending, time and wealth.
Let’s bring back my 20-something self. He was living in London, working in finance and renting a room to keep his overheads down.
Coming out of college, having more cash flow than he needed, he felt rich.
But was he?
He earned $75,000 and was spending $32,000. How wealthy was he?
Remember from last week, his net worth was $20,000.
Net Worth “divided by” Spending = WEALTH IN TIME
His WIT was 7 ½ months.
Roll forward to my early 30s. I’m a young Private Equity partner and hit $1 million net worth.
I was spending $250k a year, felt flush, but was I wealthy? Let’s find out.
$1,000,000 / $250,000 = 4 Years
Not wealthy, especially when you consider my life expectancy (>50 years).
At 31, I realized my spending was buying me NOTHING. What I liked to do was swim, bike and run. I had fantasies of leaving the corporate world. I took action.
I applied to emigrate to New Zealand. Arriving in Christchurch, I was able to buy a five-bedroom house for US$110,000. My cost of living plunged to $25,000 (NZ$60,000).
My WIT jumped to 40 years.
I didn’t return from my leave of absence. Most of my family thought I was nuts.
Best trade I ever made.
When I moved to the US, I went from a 5 to 30% tax rate.
Because it saved me money.
Taxes are one slice of your family budget
I used to live in Hong Kong, a low-tax part of the world. Thing is, it’s a high cost location – especially for school fees and residential housing.
Landing in in the US, I chose a part of the country with an excellent public school system. With three kids, that choice saved me a lot of money.
But there are trade-offs.
I grew up in Canada and my family’s basic healthcare needs were covered by the provincial government.
Not so in the USA.
My insurance, HSA contribution and dental cleanings mean I pay $25,000 before anyone’s gotten sick.
I run the $7,000 HSA contribution down against my family’s $14,000 deductible.
Anybody breaks a leg, I’m quickly over $30,000 for the year.
In my last year in Hong Kong (2000) I was living in a place that cost $100,000 per annum to rent. The senior partners paid 3-5x that amount.
School fees: friends pay up to $50,000 per kid, per annum. Mine go to public school, a $75,000 saving.
Taxes are the price we pay for living a wonderful life.
Clean air, pleasant climate, easy access to nature, an ability to avoid traffic.
As a friend pointed out, all those Californians moving to Austin are going to find out something… they’re still complaining about taxes, it’s hot as stink, they’re sitting in a traffic jam AND they lost the benefits of living in Cali.
The ability to escape tax policy is 100% in our hands.
Here’s the game.
Take your tax bill and divide it by your net worth.
In my mid-20s, I worked in London. I earned $75,000 and paid $18,000 in taxes. My net worth was $20,000. My tax bill represented 90% of my net worth.
A change in tax policy, or a move to Hong Kong, would have a material effect on my family finances.
Most of us, can’t change hemisphere’s for work.
Many of us, can work remotely from a lower cost location.
My former self, he saved 50% of his take-home pay from 1990-2008.
Year after year, his family net worth grew.
The government’s 90% take is now under 5%.
We freed ourselves from tax policy.
It’s in your hands.
Teach this to your kids.
- Taxes are one piece of the family budget
- The goal is a wonderful life
- Taxes are a cost of living well
- Over time, we control the government’s tax take
PDF Link on Dropbox
gDoc Link with view rights open, make yourself a copy.
I think these ideas were inspired by The Millionaire Next Door.
Teach your kids to become experts at applying wisdom across time.