100% CostCo 85% Vegan

2015-05-03 18.09.49I bought Rich & Julie’s new book, The Plantpower Way, and we’re looking at increasing the nutritional quality of our diet.

To get a start point, I thought I’d share how I’ve been eating over the last year.

In running through my diet, I realized that I could buy everything at CostCo! That made me smile. I do love the place.

I also realized that I’m ~85% plant based, at least under my own roof.

I have three meals that I eat most days. I’m not all that particular about when I eat them.

Fruit salad – chopped apple, berries, granola, vanilla soy milk, plain greek yoghurt

Veggie salad – mixing bowl of veggies, avocado, seeds and nuts – served with salmon, chicken or nothing – dressing is hummus or a miso-based product

Eggs and quinoa – scrambled eggs cooked in coconut oil, quinoa, olive oil – toss in 2 cups of reheated frozen broccoli – sometimes I toss a handful of shredded cheese on top

Snacks are: apples, dark chocolate, popcorn, unsalted premium nut mix, toast with almond butter/jam, my wife’s banana bread.

No sports drinks, colas, sodas, juices or sports bars.

I don’t eat processed food and won’t eat anything with trans-fat / hydrogenated oils / artificial sweeteners.

We eat out often. I’m not dogmatic (any more). Over the last three months, I can remember eating pizza, burgers, curries, steak and french fries.

When my wife’s out of town, I’ve been known to crack a couple beers and eat a pint of fro-yo from the freezer. My binges are a fraction of what used to happen as an elite athlete and a finance-guy.

My weight has been stable for a decade, my energy is good and my health markers are excellent.

I have a longstanding habit of zombie eating with electronics. I’ve passed this along to my kids (!) and am trying to sort in myself, first.

Effective Wealth – Due Diligence Results

tulipsThis series started with a definition of effective wealth and a due diligence exercise for your family.

I’ll share the best tips that I received from my due diligence work:

A general liability umbrella policy can be an effective way to insure against ruin – in my life, hosting events (where athletes might die) was the source of my greatest liability. Due to my other insurance coverages, $5,000 per annum bought me $5,000,000 of coverage.

Have an expert read your insurance contract to ensure you’re covered for your key risks. I’ve reviewed draft policy documents that specifically ruled out the only reason I was buying the policy!

Paying $5,000 per annum got me thinking that there might be a better way to structure my life. There is a better way and I’ll share my family legal structure in a future post.

Hosting athletes is a low-margin business and my need for multiple insurance policies greatly reduced the profitability of the events. So I handed the events off and removed myself from their promotion and management.

In speaking with successful families, three things stood out.

#1 – the advice to share information widely and control the structure narrowly. As much as possible the family is involved and consulted on family matters. However, not more than two individuals from each generation are involved in governance. Write out the process for a family member to become a fiduciary, or trustee.

#2 – each generation must decide their own values. It’s impossible for elders of the past to influence third and fourth generation family members. The best tip here is a reminder that no matter what you do, what you decide, what you structure… there will be aspects of life that you find disappointing – in yourself, in your spouse and in your kids.

#3 – young family members should be given the opportunity to learn from mistakes early in life. No family member should be given the opportunity to bring down the entire family and individuals should experience the impact of their poor decisions.

The Village in my Sienna

mobileMonday’s article touched on a trait that makes me an effective investor: the capacity to see the options inside the deal.

My ability to see second and third order effects isn’t limited to finance.

Last week, Mr. Money Mustache published an article about the cost of buying more assets than we need.

I confess that I am an expert at living above my needs.

The fact that I have earned the “means” does not change the reality of my choices.

A story!

Our local hospice has a partnership with an organization in Tanzania. One of their joint projects is building houses for widows and orphans.

It costs $600 to sponsor a house.

These days, I drive a 2011 Toyota Sienna AWD van. The Sportsmobile (pictured above) was sold when my kids arrived.

$600 is the semi-annual cost to insure and register my Sienna. Two houses a year.

Last week, I spent a house on new tires!

The good people at Mint.Com tell me that my Sienna is worth $21,499.

Swapping my Sienna for a cargo bike, would net 30 houses and save my family 6 houses annually, forever.

Over a decade, this choice could help 500 people with the loss of their spouse or parent.

I have been to Tanzania and these are good people to help.

The cost of this change is inconvenience when the weather isn’t great and a reduced ability to go on driving vacations.

The benefit would be knowing that hundreds of kids ride with me each day.

I told my wife that I’m going to wait a year on selling the Sienna.

However, the cargo bike arrives this month. I financed it by selling items that I put to one side last spring.

Change slowly.

How To Make Money At Real Estate

taxiEffective last month, my family owns a house in North Boulder for a net cash cost of US$100,000. It took me a decade to get that deal done. I did a similar one in New Zealand in 2001.

When I buy, I look for a good asset, at a fair price, with built-in options that can create upside.

If you’re going to make superior returns then it will be due to an option embedded in the deal.

For example:

  • Excess land gives the option to subdivide (Boulder 2010)
  • Buying outside my “home” currency of US dollars gives the ability for international arbitrage (New Zealand 2001)
  • Buy homes for less than their cost to build (Tucson 2010)

The goal is not having a property that you would be proud to show off to your friends. Until recently, I owned a “pride” property. A 6,000 sq. ft home that earned my family nothing for the time we lived in it. Truly fantastic house, mediocre investment.

Likewise, the option should not be created by using a ton of leverage. High leverage is appropriate only when you’re using other people’s money in a non-recourse vehicle. More here.

When should you buy?

#1 – Buy when you need the asset. You rarely need the asset! Be patient.

#2 – Buy when the cost to own is FAR less than the cost to rentsee my free ebook for how to do this calculation.

#3 – Buy when banks are foreclosing – banks, governments and trustees often sell for less than fair value.

#4 – Buy when the local debt market has collapsed – a cash buyer in a liquidity crisis will receive favorable terms.

Note, these tips apply to every asset and you’re going to need substantial liquid assets to take advantage.

All of the above, imply that you should study your target market for a decade before you buy. I also recommend that you limit your equity investment to 15% of your family’s balance sheet.

Right now, we’re in a bull market and you probably feel like you will never get another chance to buy at distressed prices.

You’re wrong.

In my working life, I remember bear markets in 1990 (UK), 1997 (Asia), 2000 (US) and 2009 (Global).

Take your time and remember you don’t need to do the deal.

Once a decade, the patient investor will be sent a fat pitch.

 

Correction Without Resentment

2015-04-01 16.55.13

A coach is someone who can give correction without causing resentment.

— John Wooden

Coach Wooden hits the nail on the head. Looking deeper, I ask myself, as the corrector, “What am I seeking to achieve here?”

Constant correction, mostly non-verbalized, floats through my head.

Criticism, dissatisfaction, endless tweaking and optimization… what purpose does it serve?

What is the source of this correction?

  • Is it habit?
  • Is it altruism?
  • Is it a desire to alleviate the pain I see from watching you suffer?

Too often, my correction-by-habit makes my family suffer.

Sit quietly in a room full of children. Notice two things…

  • How little the master teachers correct.
  • How much the novice parents correct.

The frazzled parents beg for the children to listen.

When I catch myself, I slow down to see if the situation will resolve itself.

It’s humbling to realize how much of the distraction I create by hurrying.

How do the masters get through to us…

  • Fix myself first
  • Shared laughter
  • Wait until asked
  • Keep it short

When I am tempted to carpet bomb my Facebook feed, I remind myself that the world is filled with good people, particularly in the homes of my enemies. What might those good people need from me?

Share a laugh, keep it short and remember…

…the important stuff happens under my own roof.