About Gordo Byrn

I write for my kids

Being Wrong

IMG_4015Some of what I know to be true is false.

Being (somewhat) wrong is a natural state of being.

It rarely harms me.

But when it does…

Boom!

What to do?

Pay careful attention where error has the greatest impact on my life.

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Blindspots – what are the areas where I am unlikely to be right?

In a marriage, a business partnership, an investment, a sport… the greater our personal, emotional investment… the bigger the fall when a new reality slams against our old beliefs.

Often a feeling of righteous anger comes forth, and along with it, a desire to lash out.

When these feelings arise I remember:

  1. I fooled myself. Make a note! It is going to happen again!
  2. Acknowledge, we all want to be fooled. I am not alone, nor am I the first to experience this situation. Nothing personal, bro.
  3. Further energy invested into a (clearly) losing situation is better spent creating the life I want, within my new reality.

It is easy to get hooked into a cycle of mutual retribution – it might even feel good, for a while…

…but you might not be aware of the harm you are creating.

Sleep, skin, hair, mood swings, cravings… all useful signals when we are off-the-path.

Tough to point this out directly to someone! The people who have been effective with me have said something along the lines of…

“I wonder if there might be a better way to handle this…”

“You’re right, of course, but you might feel different later…”

Attention

What’s the penalty for being wrong?

  • Marriage partner
  • My last haircut
  • Sports with a high degree of concussion risk
  • Sunscreen
  • Business partnership
  • The shirt I wear
  • Personal guaranties
  • The color of my socks
  • Borrowing money
  • What I am having for dinner
  • The ability of my children to teach themselves
  • My choice of car
  • My temper

Be willing to talk about what matters, with the people who matter to you.

Real Estate Review 2018

Screenshot 2018-10-19 10.14.26

A starter home in Boulder is about $1 million => if you can find one.

How do I look at rent vs buy?

Because it is so expensive to sell real estate, I consider a minimum five-year block. I ignore inflation and future predictions.

For our starter home, I assume that five-year rent is $180,000

My alternative uses of the funds, with five-year income shown:

  • Five-year treasury bond $150,000
  • Yield on Investment Real Estate $100,000
  • Yield on Vanguard Portfolio (using my 40/20/40 mix) $100,000

If I buy then I don’t get the income (from the alternatives) and my cost of ownership is $75,000 across the period (maintenance, taxes, insurance).

To keep things simple, I haven’t assumed a mortgage. I didn’t buy my first house until I could pay cash. I earned a premium on my career by being able to easily change cities.

What does the above say to you?

Here’s what it says to me… if you think there is a good chance you will be able to buy during a market decline then rent.

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The last time I bought a house (winter 2012/2013), the rental map was bare. Here it is this week…

Screenshot 2018-10-21 09.09.55

Real estate and equity investments have the potential for capital appreciation/depreciation. Real-economic growth drives long-term asset values. I’m bullish for Boulder, Boulder County, Colorado and the US.

With real estate, my capital is locked in and it will cost me ~$55,000 to get out (exit costs are about 5.5% of sales price).

With real estate, you can get priced-out of a market. Relative to what I can afford in Boulder, I am priced out of London, Hong Kong and San Francisco (three cities where my skills are highly marketable). This “pricing out” happened within a five-year window.

Beware of FOMO (fear of missing out), after three years of rapidly rising prices, our minds will extrapolate never-ending appreciation into the future. It won’t happen. Your goal should be financial independence, not real estate ownership.

Inflation, future asset prices, vacancy risk, insurance hazards… can’t be known. Sometimes they can be hedged, insured or mitigated.

I don’t seek to predict an unknowable future. I ask myself, “Is this a good price, today?”

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I have a few friends that sell real estate. I watch their their high-end sales to understand the mood of the market.

Nobody needs a 5, 10 or 20-million dollar property. So…

When the ultra-luxury deals start closing with regularity we can assume that we are on the upswing. The last 18 months has been a great time to be selling high-end real estate in Colorado.

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I force myself to review: (a) annually, (b) prior to making any new investment decision and (c) prior to changing strategy.

For now, I’m not sure what to do.

My rule-of-thumb, when unsure, is rebalance, watch and wait.

A cash buyer in a credit crunch can count on a 10-20% discount from pre-crunch prices. Given the magnitude of the last downturn, deals were available at 25-40% discounts.

fredgraph

Letting Go

I was asked for advice on “successfully letting go, when you know it’s time to let go.”

The context was athletic identity but this applies to everything.

There are three components of how I deal with my attachments.

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Understand that mortality is going to force me to let go of everything.

In the context of physical power, we are forced to deal with this in middle age. You’d have to be a very out-of-shape twenty-something not to notice a shift as you move from 40 to 60.

Every transition in our lives can be used as preparation for the Big One that awaits us all.

Another example, from the preschool years. Parents dealing with grief from the disappearance of their babies. Our kids growing up is an opportunity for continual letting go. I miss our babies (but it’s ok).

My greatest attachment is to my kids. Some day we are going to have to say goodbye to each other. Preparing for that day is part of what remains for me.

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Acknowledge that the strength of my attachments is due to chemical signatures deep within me. I can feel them.

The transcendental experiences I had, while racing, live within me. When I speak of racing, my skin electrifies and my muscles warm.

Same deal with thinking deeply about my leaving my kids – though not as pleasurable! I feel them below my heart, just in front of my spine.

If you look deeply into these experiences, these attachments, they can be a source of tremendous energy. There is a lot of power here.

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Counter my grasping by meeting my obligations to those closest to me.

Put simply, my antidote to my mind is to be a good guy.

With a deep feeling of goodness, it’s easier to let negative thoughts pass through me and not get caught up in the opinions of others.

I deeply know that my current life is aligned with my core values.

If you’re (secretly) wigging out then it’s information that you’re out of alignment. Start acting better and your mind will follow.

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To see the power of these techniques, consider the times of your life when you’ve done the opposite.

What were we thinking?

IMG_0501Late-cycle is when we tend to make unforced errors in our financial life. My spidey-senses have been tingling due to a series of macro-events that I’ve noticed.

  • Wars of choice (trade, diplomatic and conventional) on multiple fronts
  • Tax cuts and borrowing increases into a strong economy
  • Rising interest rate environment — across all durations
  • Blockchain implosions
  • A study noting 76% of newly-minted IPO companies were loss-making at listing

I last felt like this in 2005. Then, and now, the party can continue for a long time.

What to do?

Rebalance – once a quarter, reset to my target weightings.

Consider leverage – don’t borrow to buy stuff you don’t need. Pay cash, or wait.

Stay invested – Stay the course. Each time you make a change, you introduce an opportunity for error to enter your life.

Do you remember 2009-2012? It probably seems like ancient history to many. There will be great times for new investments in all of our futures.

Aggression isn’t Violence

If it turns out you brought home an Alpha Babe then you’ll know for sure by your child’s second birthday.

With our first kid, the challenge we faced was our cluelessness lived in a black box. We were unaware of how our lack of skill was making our lives FAR more difficult.

More than worrying about toilet training, speech development, when the little fella is walking… the #1 mission is early socialization.

If socialization fails then then life is going to remain very challenging for decades, rather than years.

Our approach was a minimum of three years at a well-established preschool, with wise, veteran lead teachers (Alaya).

We protected our marriage by carving our time for ourselves — hire patient, firm, college aged women.

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Dominance
If you score low in assertiveness then don’t panic!
Be cautious of falling into a fantasy of fixing the aggressive nature of your little one. We were a lot more successful with teaching how to channel their drive in a socially acceptable manner.

If you score high in assertiveness then resist the urge to attack your kid!
You won’t like the person that comes out the other side (you or your child).

Don’t tolerate other kids taking proxy-revenge on a challenging kid.

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Five Commands my kids learned very early…

1 – Baby on the ground (hand flat, palm moves toward ground)

2 – Easy, Tiger, Easy Tiger (palms facing out, gentle pushing motion)

3 – Breathe with me (exaggerated breath, shoulders rise and fall slowly with a smile x3)

4 – No hit (index finger points up)

5 – Slow it down, Slow it down (same as Easy, Tiger)

Of course, I needed to be working on these in all areas of my own life as well!

I still use these commands today… “but Dad, he’s not a baby anymore…”

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I’ve had ZERO success at changing the nature of my kids.

I have had a lot of success at:

A – keeping my exposure below the point where I start to dislike them

B – using the buttons they push to improve myself

C – improving my marriage and home life

Something for my kids, when they’re 21

I didn’t listen to much when I was younger.

These might have gotten through…

Save half of what you earn – you will not miss the spending you avoid and this constraint will have a positive impact on the rest of your life => first in appreciation for what you do buy => second in the ability to easily constrain yourself when life’s inevitable setbacks arrive.

Pay attention to what bothers you about others => fix it in yourself.

Ghost – resist the urge to justify yourself. You’ll feel different later. Personal truth changes with time and circumstance.

Climb your mountains – my time for large physical exploits is gone, I’m happy, content and satisfied with how the physical side of my life played out. Don’t wait to be great.

Be wary of the prettiest girl in high school, the star athlete, the charismatic sociopath – We are all fooled by appearances. LEARN from your inevitable mistakes. This tip is not about dating cheerleaders, it goes into every aspect of my life and is extremely hard to override.

Barbell your life – learn about your weaknesses but do not worry about them => You will do much better parking yourself where your strengths can shine. Fear ruin => my big three are substance abuse, leverage and toxic relationships. You will find yourself defenseless in the face of certain people, substances and situations. The two strategies that worked for me were avoidance (stay a mile away) and replacement (with healthy addictions).

School’s Out For Summer

…and preschool’s done for_ever!

It was the toughest phase of my adult life – deeply satisfied at the end!

Some thoughts…

Teachers make a HUGE difference!

I learned so much about little kids, myself and relationships from applying their advice across my entire life.

I have a lot of empathy for the couples that don’t make it through the preschool years. If it hadn’t been for one woman, in particular, we would have struggled. She was our guide for SEVEN years!

Don’t expect family life to be easy. Again and again, I simplified my life to increase my emotional capacity.

Racing, hard training, consulting projects, even sad movies… anything that would tap me… went by the wayside.

Strangely, for how awful I told you it was, I have pleasant memories. A great lesson for the rest of my life.

If I don’t act on my negative experiences then they flow away.

The other day my eldest asked me why I don’t yell at people. Already, she knows some yellers – sometimes she’s one of the them.

I said, “Sometimes I want to yell but I use my mind-strength to avoid yelling.”

Truth be told, I do raise my voice and I’ve been known to growl.

But I’m improving and you’ll struggle to get much of a rise out of me with personal angst.

In addition to lots of love, constant forgiveness is another gift from my kids.