What To Do

2016-06-26 12.45.44We can be trapped into thinking that one person can’t make a difference…

…that there’s no point in bothering

…that we will be punished for good deeds

A bias towards inaction enables the enemies of a civil society to screw things up for personal gain.

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This is what I got done in June:

  • Sent in my naturalization papers
  • Wrote an elected official
    • Introduced myself and my kids
    • Told him where in his constituency I lived
    • Pointed out an issue where he had done a particularly good job
    • Told him my #1 issue for his consideration
    • Thanked him for his service to us
  • Continued my home-based practice of de-escalation — when my family watches me improve myself then our entire community is better off
  • I selected a political group and a politician that “don’t get it”
    • I picked an area from each where they “do get it”
    • I shared my areas of agreement with my wife
  • Consumed less violence – whatever your favorite source… MMA, NFL, CNN, hate speech, movies, video games – choose less – I pay particular attention to visual violence as well as violence I can feel in my body – the NFL scores uncomfortably high in terms of pleasurable, tribal violence
  • Generated less anger – I can hold emotions, rather than feeding them – my mantra is don’t act on anger – the “holding” is done while breathing calmly because speaking when angry merely feeds it

Each of the above was inconvenient but, collectively, improved my life.

I need to remind myself of the overall improvement because it takes sustained effort to create the life I want to live.

Indeed, it takes sustained effort to create the mind in which I want to live!

Do we care enough to change?

One small step, daily.

 

Fame, Meaning and Risk

2016-06-21 16.41.25A buddy asked me to have a look at the movie, Meru, a compelling account of climbing at the highest level.

What an amazing movie.

It reminded me of the themes that challenge my daily living.

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Fame

We share a need for connection and approval.

When I see someone with an extreme need for approval, I feel compassion for the child within them. I feel this because growing up with addiction, abuse or abandonment will crank up our need for approval/fame. My kids are lucky to have parents that are present and loving.

Try this antidote.

Lots of small acts of kindness.

I’ve been at it for more than 5,000 days.

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Meaning

Young people thrive when working together on a challenging mission.

In middle-age, many of your fondest memories will be a result of this reality. Remember that memory is a chemical signature of a story we tell ourself.

Coming back from the mission, or simply growing up, can leave a HUGE void in your life.

Applying the kindness tip gives you a dose of meaning but you’re going to long for a stronger fix.

Surprisingly, the mission might not need to be that much larger.

  • Build a veggie garden for your son
  • Teach your daughter to use an inflatable dinghy
  • Take your wife camping
  • Drag your son on a sled to a mountain lodge

I’m constantly giving myself missions. Recognizing that I’m larger than myself, my missions have an ever lower risk of death.

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Risk

Teach your kids to recognize, and be wary of, risk-seekers – especially the criminal variety. Risk-seekers are exciting when your under 25. They are a disaster as a partner in family living.

Another antidote…

Gradually expand your sphere of influence…

  • Your future self
  • Your marriage
  • Your kids
  • Your family
  • Your tribe
  • Your community
  • Your country
  • Your planet

At times, I found it useful to take a break from my risk-seeking pals. I’ve tried learning new hobbies. I’ve resisted the urge to constantly benchmark myself against others.

It takes courage to make better decisions.

Wisdom

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

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.

 

 

The Blue Flame Years

blueflameLast week, I might have left you with the impression that it’s always a good idea to trade money for time. Here’s a counterpoint.

What do you plan on doing with that time?

As a young adult, I had the opportunity to travel before graduating college. I spent much of that summer drunk. A dangerous trade for a young man with a family history of addiction and mental illness.

Later, I dialed down my drinking and discovered a big increase in time on my hands. I was fortunate to fill this void with sport.

As a coach, I often saw athletic performance decline when an athlete gave themselves more time to “get serious” with their sport.

A high-powered lawyer shared his fear of retirement. He was terrified at the prospect of increasing his non-working lifestyle (sleep, booze and high living).

With a bit of luck, your parent’s helped guide your focus. If not then you would be smart to channel that energy into areas that you’ll value in later life…

…but what the heck are those things?!

Here’s what the young man (in the picture above) got right.

An education that you can apply to help other people – this could range from finance (helping myself) to engineering (building things with others) to medicine (helping others).

A habit of lifelong physical activity – if your parents didn’t pass this on to you then you’d better start immediately – don’t get wrapped up in performance, focus on touching nature every day.

World-class peers and mentors – when you are burning bright, it is more important to learn, than to earn. During a two-year apprenticeship, I was paid peanuts by one of the best firms in the world.

An ability to live cheaply – this accomplishes three things: (a) gives you the flexibility to take any type of work; (b) minimizes debt from your education; and (c) enables you to continue an early habit of saving money for freedom.

A fear of debt – assume that every $1 you borrow before 25 is $10 that you won’t have at 40. Frankly, if you don’t quickly establish a habit of living within your means then it will never take hold. Ask your parents and study their friends.

A love of work – here’s what my wife gets right about endurance sports for kids – growing up active, my kids are associating output with fun. If you have an alpha child then sports are an essential part of not ruining, or drugging, what makes her great.

I have made a ton of mistakes.

A handful of good habits mitigated the damage.

Family Investment

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.

Family Risks

cargobikeWhen you consider risks to your family’s capital, what sort of things pop up in your mind?

  • Stock market crashes
  • Unemployment
  • Death of main breadwinner
  • Divorce
  • Underperformance of family business
  • Change in political situation
  • Change in interest rate policy
  • War and civil unrest

If we broaden the scope to human capital, what might you add?

  • Addiction and Substance Abuse
  • Remittance dependence
  • Health and wellness
  • Dementia and eldercare

I’ve known five generations of my family and we’ve experienced all of the above.

Surprisingly, the top-of-mind risks are not our source of greatest loss.

Aside from mental illness, our greatest source of turmoil has been due to developing an abnormal sense of normal. More specifically, we’ve looked up to friends & family that led us astray with regard to our financial aspirations.

DaddyGIf you happen to be a self-made individual then you will, quite rightly, say “it’s my life and I’ll live the way I darn well choose.”

You are right.

I commend you.

Self-reliance is a wonderful gift to our communities and I hope to teach it to my kids.

…but I remind myself of the cost of benchmarking at ever higher levels of achievement.

  • The cost comes in time not spent with my spouse and kids.
  • The cost comes from choosing work that is ethically ambiguous.
  • The cost comes when spending time becomes spending money.

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This caution also applies to risk.

As a young man, I tracked into higher and higher levels of “acceptable risk.” A good friend died. Another went bankrupt.

Teach your kids to notice risk-seeking behavior in themselves, and others.

  • Mountaineers => good, great, dead
  • Property Developers => good, great, bust
  • Professional Athletes => good, great, disgraced

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Finally, consider the impact of neighborhood and peers.

A friend jokes that his daughter was one of the few kids at her Bay-Area school that didn’t have an elevator in her home.

What’s my children’s definition of normal?

Choose wisely.