Redefining the Good Life

Posted on August 19, 2011 by Ron Byrnes

: Return trip with Sixteen, mid-day

Wednesday, August 17th, 8a.m. Looking out my home office window at blue sky and the Black Hills. One of the best starts to a day imaginable.

5:45a trail run with the boys. 49 degrees. Semi-dark on the first loop, then dawn for reals, and a second foot-loose and fancy-free one. Can’t remember much of what we talked about–Danos b-day, the Seattle tunnel vote, Black Swan, Rick Perry wanting to use drones on the border, the eleventh grade 6’5″, 270 lb defensive tackle at Tumwater HS.

Near the end, I decided to treat the labradude to a pre-breakfast trip to the lake. He LOVES fetching in the water, but in the late afternoon he has to contend with fishing lines and swimmers. His walking partner has been at camp so he’s under-exercised. Off we went, ring tucked in the back of my shorts, three-quarters of a mile downhill to the lake.

Perfect. No-one in sight. Unleash him, pop the ring in his mouth, and he Usain Bolts it to the lake’s edge. A razor thin layer of wispy fog rests listlessly three-four feet above the water. Seventh or eighth throw goes a little farther than normal and he can’t pick it out, so he just kind of paces the shoreline, perplexed. Gradually, it drifts farther offshore. Now it’s in the low 50’s and my sweat has dried, but what can I do but strip down to the running shorts and retrieve it myself. We swim after it side-by-side, my head down, his up (note to self: become world famous by teaching Mdawg to swim with his head in the water, breathing to the side).

Shirt, sweatshirt, socks, shoes back on, I prep for the final throw, the one where once he’s got it I book up the gravel road, knowing he’ll close the gap in a blink of the eye. He’s paying such good attention, he gets to run home without the leash. Buries me on the last hill, ring still in his mouth. I pry it loose and he fetches the paper. Towel him off and he charges in the house to find his momma.

Even though I’m probably less materialistic than average, I’m still susceptible to the fallacy that our consumer culture is based upon: If I just owned x and y and z, I’d be tons happier. My x, y, and z shift over time, but are often a nice car, a house on the lake or sound, and/or a new bicycle.

Lots of research shows a positive correlation between individuals’ and countries’ economic security and happiness or what is sometimes referred to as “subjective well-being”. But there’s a tipping point, a point of diminishing returns where more economic security doesn’t lead to any more happiness. Maybe the simplest way to put it is members of the (shrinking) middle class evaluate their life situations more positively than members of the lower, but upper classers don’t report much if any more satisfaction than middle classers.

Found a nice house with amazing views of the sound a few months ago and got real close to making an offer. It’s about eight miles out of town, eleven from the start and end of our regular weekday morning runs. We still may end up moving into that hood, but that will mean a twenty-two mile roundtrip every Saturday to reconnect with the boys. That will also mean a different kind of start to the weekdays. Running with just my thoughts. Yikes.

Sure I could make new running friends, but the boys and I run at the exact same pace, their conservative politics are a constant source of entertainment, no one can bust balls as well, and now we have a history that can’t be replicated.

This morning I was reminded that it’s friendships, community, and nature that bring the greatest joy. And good health. No question about it, take my friends, my doggie, and my lake away and replace them with a nice new car, house, and bike and I won’t be nearly as happy. The only question is how long will this insight stick?

Market Volatility and the Invisible Gorilla

Posted on August 15, 2011 by Ron Byrnes

Familiar with the invisible gorilla social science research? Learn about it here. It demonstrates that although we think we see ourselves and the world as they really are, we’re missing a whole lot.

The personal finance invisible gorilla is the precise difference between your average monthly income minus your average monthly expenses. Understandably, right now, with the stock market fluctuating wildly and ultimately losing value, many peeps are obsessing on the declining value of their stocks and bonds.

Meaning they’re not paying nearly enough attention to the two things that will determine their financial well-being medium and long-term. (1) The relative difference between their average monthly income and expenses and (2) their time horizon.

Forget investing altogether until your average monthly income exceeds your average monthly expenses ten to twelve times a year every year.

A friend bought some AAPL shares during last week’s roller coaster ride and I’m probably to blame because I’m a fanboy, I own it too, and occasionally talk it up (everyone talks about their gains, not their losses, my term for this is”gain bias”). His first day of ownership just happened to be a good one so he emailed me, “Nice amount of returns in 24hrs.” To which I replied, “Dear Usain, It could hit 300 before 400. Financial independence is a marathon.”

Should probably trademark that line before I start hearing it on MSNBC. I’m learning not to sweat large paper losses during market corrections because I know that overtime, my modest income/expense differential, which translates into monthly cost-averaged investing, will lead to greater wealth in five, ten, twenty years.

Taking the long view is not a panacea because there are two other vexing challenges: 1) increasing one’s average monthly income and 2) reducing one’s average monthly expenses. People focus too much on 1 (offense) and not enough on 2 (defense). If only we could all find jobs that paid mad money or find more hours in the day to work or get others in our orbit to kick in more on the income side. Defense isn’t that complicated. Resolve to eat out less. Camp out. Buy movie tickets at Costco^. Commute by bike. Buy clothes at Costco^. And most importantly, quit bringing sh*t home you don’t need.

And speaking of gorillas, not a sci fi guy, but still ~~loved~~ really liked (moms says you can’t love something that can’t love you back) The Rise of the Planet of the Apes.

^ Full disclosure, should of held them, but I sold my Costco shares awhile back. For a loss.

My new old lunch box

21st Century Commerce

Posted on July 13, 2011 by Ron Byrnes

[I have a dream as a blogger. That someday my sissy will comment. Today’s post is written with that in mind.]

In the 20th century, when someone said, “I’m going shopping,” it usually meant they were driving to a nearby store. As a pipsqueak, I’d routinely shout to my mom as she hurried out the door, “Bring me something.”

Increasingly, we log onto to our lap or desktop computers to make purchases. I do a google search and then press “shopping” to see where it’s available and for what price.

Recently, I read a Wall Street Journal story about a young professional’s finances. He buys lots of things on Ebay that I wouldn’t have ever thought of buying on-line. Razor blades for example. So I ran the razor blade numbers and found they’re 50 cents cheaper per blade on Ebay than at Costco. Google shopping doesn’t seem to link to Ebay, so now I’m going to try to remember to search Ebay separately.

Last week I was shopping for mountain bike pedals. I decided I wanted these*. I had at least four choices on where to buy them: 1) in person at the local LBS. . . local bike shop; 2) in person or on-line at a chain/cooperative/club store like Performance Bicycle or REI; 3) on-line at the behemoth, Amazon.com; or 4) on-line at an independent bike store anywhere in the world.

I didn’t even check the local bike store because I was doubtful they’d have them in stock and they just can’t compete on price. In fact, now I stock up on chains, cassettes, and cables on-line, which cost considerably less than at the local LBS, and just pay the LBSers for labor.

They were listed as $269.99 at Performance, but on sale for $199.99 (before tax and shipping). REI, $269.00. Too expensive even factoring in the 10% or so I get back as credit as a “member”. (Of course “cooperative or club credit” is of no value if it prompts me to later purchase things I don’t need).

They were available at some independent associated with Amazon for $159.99, or $173.91 with tax. For some reason, the shipping date was late July, early August.

Finally, they were 87.17 euros or $126.39 at a Barcelona sporting goods store. No tax, but the only shipping option was DHL for $20.58, for a grand total of $146.97.

So they went from Barcelona, Spain; to Leipzig, Germany; to Cincinnati; to Seattle; to my door a few hours ago.

* yes weight weenies, 100g heavier than the normal, smaller 985s, but with these is I can more easily do short, tennis shoe-based rides around town

What Recession?

Posted on July 1, 2011 by Ron Byrnes

The World Wealth Report was just released. In 2010, the wealthiest 103,000 people on the planet controlled 36.1% of the world’s wealth up from 35.5% in 2009. The minimum for membership in that club is $30m. Imagine if those 103,000 people’s percentage of world wealth continues increasing .6% annually.

40,000 of the 103,000 are U.S. citizens. The number of “high net worth” people with more than $1m to invest (excluding primary residence, collectible items, and consumable goods) is 10.9m, up 8.3% in 2010. The net worth of those 10.9m peeps is estimated to be $42.7 trillion, up 9.7% in 2010.

The U.S. has the most families with more than $100m, 2,692. China has 393 families with more than $100m, an increase of 30% in 2010.

The number of “high net worth” people in Asia (3.3m) surpassed the number in Europe (3.1m) for the first time. China is fourth behind the U.S., Japan, and Germany.

The wealth train has left the station and it’s rolling. And if we’re to believe the Republicans in Congress, the passengers can’t afford a modest bump in their marginal tax rate.

Sentence to Ponder

Posted on June 17, 2011 by Ron Byrnes

Since its founding, Father’s Day has always been the beta holiday—created as an analog to Mother’s Day, and never celebrated with as much fanfare, attention, or money.

From Annie Lowery in Slate.com. In 2011, Lowery reports, consumers planned on spending $106.49 on Father’s Day gifts and $140.73 on Mother’s day gifts.

That’s just wrong. Where’s the rage for parent equity?

Sunday will mark my eighteenth Father’s Day. Eighteen times $35 equals $630.

Dear daughters, a $736 ($106 + $630) gift is all it will take to close the parent gap.

What If Your Street Was Joplined Tomorrow?

Posted on May 27, 2011 by Ron Byrnes

Glad or sad I’ve run out of athletes that we’re all alike?

Utter devastation. Joplin, Missouri, before and after.

What would you do if you knew, tomorrow, the place where you store your stuff and sleep at night was going to be demolished?

Not long enough to rent a storage space and move everything into it.

My approach is muddled by the wife and daughters. The daughters are locked into a hoarders-like “Queen of Clutter” competition. Whomever wins the tiara won’t be able to find it in their bedroom.

So my first decision, the family is on their own. I’m taking one car and leaving them the other. When the GalPal stuffs her Clutter Queens and all of her bulky, three-ring 1970’s and 1980’s photo albums into the Hyundai, there won’t be any room left for things like clothes, shoes, water, and food.

Already in my trunk is one of the top priorities, my new golf clubs. On second thought, I’m taking the Hyundai because the bike is going on the roof rack. Next, bike gear, the laptop, iPad, and backup drive. After that, some hard copy pictures. Also, water, dried Mangos and apricots (current addiction), and important papers—birth certificate, tax returns, personal finance deets, passport. Next, some of the CQ’s childhood artwork and the letters my dad’s friends and colleagues wrote following his passing. Note to self, scan those before the big one. Then, half of my relatively small wardrobe (of course including Puff Daddy), my pillow, comforter, and shoes. Almost forgot some dishes, the blender, and bottle opener.

And last, but not least, the third “D”. After the Digital info and Down, the Dog.

One advantage of simplifying and then choosing selectively is I’ll have ample room left over in the car. That way, when the inevitable happens and the Girls Club begins pleading with me to take some of their spillover, I’ll be able to, thus earning valuable points in the up and down game of family life.

The Satisfaction Treadmill

Posted on May 16, 2011 by Ron Byrnes

I’m a third of the way into William B. Irvine’s excellent book, “A Guide to the Good Life: The Ancient Art of Stoic Joy”. Irvine “plumbs the wisdom of Stoic philosophy, one of the most popular and successful schools of thought in ancient Rome, and shows how its insight and advice are still remarkably applicable to modern lives.”

The first “Stoic psychological technique” is negative visualization or regularly contemplating the bad things that can happen to us. There are several reasons to practice negative visualization, but the main one is “We humans are unhappy in large part because we are insatiable; after working hard to get what we want, we routinely lose interest in the object of our desire. Rather than feeling satisfied, we feel a bit bored, and in response to this boredom, we go on to form new, even grander desires.” Psychologists refer to this as hedonic adaptation. We experience hedonic adaptation when we make consumer purchases, in our careers, and in our relationships. Irvine writes, “As a result of the adaptation process, people find themselves on a satisfaction treadmill.”

He adds: One key to happiness, then, is to forestall the adaptation process: We need to take steps to prevent ourselves from taking for granted, once we get them, the things we worked so hard to get. And because we have probably failed to take such steps in the past, there are doubtless many things in our life to which we have adapted, things that we once dreamed of having but that we now take for granted, including, perhaps, our spouse, our children, our house, our car, and our job. This means that besides finding a way to forestall the adaptation process, we need to find a way to reverse it. . . . The Stoics thought they had an answer to this question. They recommended that we spend time imagining that we have lost the things we value—that our wife has left us, our car was stolen, or we lost our job. Doing this, the Stoics thought, will make us value our wife, our car, and our job more than we otherwise would.

Irvine goes on to contrast two fathers–one who periodically reflects on his child’s mortality and the second who refuses to entertain such gloomy thoughts. The second father assumes his child will outlive him and that she will always be around for him to enjoy. The first father, he concludes, will almost certainly be more attentive and loving than the second.

So far, I’m down with modern Stoicism. Even though I’m probably more contemplative than the average bear, the notion of a satisfaction treadmill resonants with me. I take things for granted that I know I shouldn’t, especially my health; my family’s health; my material well-being; my work; and a promising future. I experience wake-up calls—the literal phone call of my father’s sudden death tops that list, the death of a neighbor’s child from leukemia, stories of cyclists getting hit and killed, and more subtle nudges like illness, and job loss and home foreclosure stories.

My take-away from the chapter on negative visualization is to be much more intentional about reflecting on the bad things that can, and in many cases ultimately will, happen to me. Stop depending on being surprised by late night emergency phone calls, and instead, make time every day or week to reflect on losing the things I most value—my family’s health, my marriage, my health, our friends, our home.

And, of course, my faithful Pressing Pause readers.

Sports Mindlessness

Posted on May 11, 2011 by Ron Byrnes

Hi, I’m Ron, and I’m a sports addict.

It’s mind boggling how many devoted sports fans like me there are given the sports landscape—too many players breaking too many laws; the inability of players and owners to divide the billions of dollars in television and other revenue; exceedingly wealthy owners expecting the general public to subsidize their billion dollar sports cathedrals; the performance enhancing drugs; not to mention the tendency of too many athletes and their fans towards violence, homophobia, and misogyny.

Of course, interspersed within all those negatives are sublime moments of pure competition, athletic excellence, Nike commercials, and joy.

Maybe professional sports are like television, just a reflection of ourselves, and in some cases, our less impressive selves.

As a sports-minded person, I wonder, what form might socially redeeming sports-mindedness take? Someone who values non-violence, level playing fields, the character building effect of sports, and the amateur ideal. Maybe I should limit myself to amateur sports, college sports, or minor sports, or high school sports, or minor high school sports?

That’s it! Maybe I should return to my high school athletic roots and start a cable television channel and website devoted to high school golf and water polo (AGWP-Amateur Golf and Water Polo).

Until some VCs see the brilliance of that idea, maybe I should just substitute personal athletic activity for the time I spend reading about, watching, and listening to sports.

A Paradoxical, Pervasive Prejudice

Posted on May 6, 2011 by Ron Byrnes

Most people want to be far wealthier, but dislike the wealthy.

What do you know about the wealthy? Do you know many well-to-do people? Know enough, well enough, to generalize about them?

Like old age, the notion of “wealth” is of course relative. Since 1970, Boston College’s Center on Wealth and Philanthropy has conducted several studies of the wealthy. Mostly recently, they asked 165 households with at least $25 million in assets to write freely about how prosperity has shaped their lives and those of their children. Their average net worth was $78m, with two being billionaires.

The results of the study are not yet public, but The Atlantic was granted access to portions of the research which form the basis of Graeme Wood’s April essay titled, “Secret Fears of the Super-Rich“.

Fascinating read. The bottom line, to paraphrase Woods, the respondents turn out to be a generally dissatisfied lot, whose money has contributed to deep anxieties including a sense of isolation, worries about work and love, and fears for their children.

A few excerpts:

• A vast body of psychological evidence shows that the pleasures of consumption wear off through time and depend heavily on one’s frame of evidence. Most of us, for instance occasionally spoil ourselves with outbursts of deliberate and perhaps excessive consumption: a fancy spa treatment, dinner at an expensive restaurant, a shopping spree. In the case of the very wealthy, such forms of consumption can become so commonplace as to lose all psychological benefit: constant luxury is, in a sense, no luxury at all.

• Among other woes, the survey respondents report feeling that they have lost the right to complain about anything, for fear of sounding—or being—ungrateful.

• The poor-little-rich-kid retort is so obvious—and seemingly so sensible—that the rich themselves often internalize it, and as a result become uncomfortable in their interactions with the non-wealthy. Once people cross a certain financial threshold, they have a tendency to hang out with one another, to enjoy the company of other people who know that money relieves some burdens but not others.

Interesting how clearly the poor-little-rich-kid retort shapes the comments at the end of Wood’s essay.

Our church has recently updated its “welcoming” statement which reads: We welcome all people—the poor and the rich; the young and the old; people who are single, married, blessed, divorced, separated, partnered, or widowed; people of all abilities; people of all sexual orientations and gender identities; and people of all nations and ethnic backgrounds.

Some probably assume the rich may not need as warm a welcome as the other referenced people and groups. But Boston College’s “The Joys and Dilemmas of Wealth” study suggests they do.

Understanding, care, and empathy shouldn’t be rationed out as zero-sum qualities.

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