There were times in my life when today’s article seemed impossible.
I’m thankful my younger self persisted and made time his ally.
Inside last week’s article, I wrote:
I’m grateful I didn’t build a portfolio to suit any of those periods of our life.
“Those periods” being the four developmental blocks for raising a family.
What can we build?
Before getting into that, a bit on mindset.
When our first child is born, we are influenced by our recent past. It took years to realize I wasn’t going back to my old life, anytime soon. By the time I understood the time scale, we had three kids.
Family is a 20-year time horizon
When we “get our time back” we will be different, and a whole lot older.
If you are a young parent, then thinking in 20-year blocks will not come naturally. I’m 55 and it still doesn’t come naturally. Good news, we don’t need to figure things out. The main tasks involve keep our options open.
No Secondary Assets - my best decisions involved:
Not Buying
Simplifying
Avoid Assets that increase family fixed costs.
Invert that…
Apply the minimum capital to meet the need, whatever the need appears to be.
Do not capitalize luxury spending.
Invested capital must generate a financial return for my future self (when I get “time back” in ~20 years).
The simple rule is don’t buy any asset that increases Family Core Cost of Living.
If I want to violate that rule then I must pay cash and, hopefully, that nudges me to keep luxury spending variable.
These rules constrained my life, and my portfolio, during the most stressful period of my marriage. They are simple, easy to remember and reduce a family’s risk of ruin.
There were times when I didn’t enjoy my constraints but remember…
Families operate on a 20-year time horizon.
Our time is best spent improving our career, or business.
These rules generate peace-of-mind in a stressful time.
Negative-cashflow assets require time (and emotion) to manage.
Finally, watch peer & elders…
Notice… the thought of buying is more attractive than the reality of owning.
That’s the “not do” side of my strategy.
20 Years
That’s a BIG chunk of time.
What can be accomplished?
Debt-free place to live.
Long-term capital appreciation in college accounts.
Deep connection, via shared experience, within the marriage.
Let’s dig in a bit.
1/ Place To Live: before our kids started school, we downsized into a house that is a two-minute walk to an elementary school. Our choice paid us, in time, when our house was at “peak chaos.”
2/ College Accounts: I invested heavily when the family was in The Crazy Years. Our choice paid us with years of tax-free compounding, and lack of worry.
The financial legacy I will offer my kids is debt-free education. It’s something my family gave me, and it made a huge difference for my financial outcome. Because it made a big difference, I was willing to inconvenience myself (see the “rules” above).
Point 3 deserves its own section.
The Kids Will Grow Up
When you’re “in it” with lack of sleep, getting yelled at by a toddler (Every. Single. Night.) and all the other joys of parenting little ones…
…it can feel endless.
It isn’t.
Rather than worrying about the portfolio, soothing ourselves via luxury experience, picking up a negative addiction, or any of the other distractions available to us…
Take time to prepare for the knowable aspects of the future.
Who do I want to be?
What type of person do I want to be with?
…in 10 years, in 15 years, in 20 years.
The answers to these questions are absolutely knowable.
It’s about people, not portfolios.
The most important person is yourself.
The most important traits are health, strength and vitality.
In the pain & chaos of the first ten years of family life… it is easy to lose sight of these truths. It’s the reason for the subtitle last week.
Start By Saving Yourself
I was an “old dad.”
The advantage of being 40 when our first was born… I’d spent my 30s “saving myself” (after a divorce). Saving did not mean indulging, that’s how I spent my 20s.
Saving meant:
Figuring out how I wanted to live.
Placing myself in an environment that reinforced my desired lifestyle.
Replacing my many poor habits and “idiosyncrasies.”
Finding a life partner.
Creating a life together.
A Desire For Better
A doctor-friend observed…
Not Everybody Wants To Get Better
It was not a criticism of his patients. What he meant was…
Our true desires are usually hidden from our conscious minds.
Many of his patients were not motivated to heal themselves. There was another need driving their behavior.
To flush these out I pay attention to:
Who I Respect.
When I’m Surprised.
When I Laugh Out Loud.
Jealously & Envy.
Envy is a wonderful signaling mechanism. I talked about it with Rich Roll when I was on his podcast. By learning from our “negative” emotions, we can better direct our lives.
The Future Arrives
I consider myself a master of deferred gratification. It’s a useful trait in finance and endurance sport.
Thing is… …at some point, the future arrives.
Growing up, 30 years-old was the distant future.
I turned 30 in 1998.
I’m 25 years past the furthest I could contemplate as a young adult.
I’m a decade beyond the age of my grandparents, when they appear in my memories.
I’m five years away from 60, the beginning of the transition to “old.”1
So what’s valuable?
Living in a house surrounded by love.
Time to self-direct my life.
Health, Strength & Vitality.2
A certain level of wealth is extremely helpful to achieve the above. But don’t confuse something that’s useful (to achieve goals) with the goal.
Love - Time - Health
When we are “in it” we will struggle to think through the second half of this article.
Something we got right was the tactical use of childcare to support Love, Time & Health.
Another thing we got right was following the rules (at the top) so we didn’t constrain our future selves.
Forgive everyone for the difficulties of raising a family: your spouse, the younger version of the kids and yourself.
I am NOT an “age is just a number” guy, but I understand why people say it. I tell my kids, “This is what 55 looks like. If you want to look a certain way, then you’ll need to live a certain way.” It’s the same for wanting to live a certain way. Certain paths imply certain actions.
Don’t let short term goals rob you of a lifetime of vitality. The compromises I made to protect my health have paid off handsomely.
Thank you for writing this.
I’m 20 years behind you on the path. At 35 years old & rebuilding life for my family (child) after the pain of divorce from a now-convicted criminal. All that experience definitely has me reflecting on the future, in light of the past.
In particular, your wisdom to take caution when acquiring assets that will add to family living costs is extremely timely. Extremely.
I want to set life up for my child & my husband (13 years older, different considerations there as well). I want to buy our future time and choices with my/our choices now & in the next decade. We desire to travel far & wide as a family. I know this is possible with concerted efforts to plan and prepare.
I found you through the Rich Roll podcast in 2022. You’re uniquely gifted to share these messages of what truly matters in the world - family, love, health, time, choice. Please keep sharing… I read every Tuesday.