Last week, I raved about the book Designing Your Life by Bill Burnett and Dave Evans. These two Stanford design professors have taken design principles and applied them to helping people figure out what they want to be when they grow up.
After advocating Designing Your Life to several friends, two of them suggested that we work through the book's exercises together. One of those friends is Kim, my long-term girlfriend. The other is Craig, a college classmate. I thought it might be fun to share some of these exercises as we complete them over the next couple of months.
Because I want to respect the intellectual property of the authors, I'm not going to describe the exercises exactly. Instead, I'll provide a vague overview and then discuss my own answers. (And, when it makes sense, I'll also include answers from my friends.)
With that out of the way, let's dive in! Let's see what happens as I begin the process of designing my life.
The Get Rich Slowly summer of books continues! Today's excerpt comes from Jordan Grumet, better known in the FIRE world as Doc G, host of the Earn & Invest Podcast. When he's not talking about money, Jordan is a real-life hospice doc. His new book, Taking Stock, offers lessons from the dying to the living.
I used to have a patient who was an undertaker. We had many conversations about philosophy and practicality, and it didn’t take long for me to realize that one must gain profound insights from being engaged in such a unique business. As I was often fond of saying: When the undertaker speaks, you should really listen.
Those of us who have made death and dying our business may seem unlikely investment advisers, but because both the undertaker and myself have spent extensive time in close proximity to mortality, we’ve been given unique insight into what’s really worth investing in. What investing tips could someone in my line of business have gleaned from dealing with death and dying? Believe it or not, a few quickly come to mind.
These tips weren't learned by accompanying the wealthy through this difficult journey — although the wealthy have much to teach. These tips weren't siphoned off of the personal books of those who had little interest left in hiding their secret ingredients to success. These are simple, straightforward bits of knowledge gained from walking down this lonely path with those reluctant to be making the journey.
And believe it or not, most of what I learned about investing has nothing to do with money.
Last Friday, I drove from Corvallis to Portland to help my cousin, Duane. Duane has been living with throat cancer for several years now, but in recent months things have grown worse. It feels like he's preparing for the end. And that means he's packing up his apartment (where he's lived for 21 years!) to move someplace smaller.
We spent all of Friday afternoon sorting through his office. This was a challenge because (like most Roths) Duane is messy (and a self-proclaimed hoarder). Duane and I packed boxes and boxes of collectible card games, ancient coins, books on Greek and Roman history, and outdated computer games.
While we packed, we talked. Duane is my cousin, yes, but he's also my best friend. Because we're family and friends, I feel like we share a deep connection. We can call out each other's bullshit without hurting feelings. We can sing each other's praises without becoming obsequious. Most of all, we can talk about nerdy stuff like Magic: The Gathering, The Great British Baking Show, the ignorance of history in supposedly "historical" television dramas, and so on.
At one point, I found a piece of paper buried on a bookshelf. "Can I have this?" I asked. "I want to publish it on Get Rich Slowly."
"What is it?" Duane asked.
"It's your net worth from 1993," I said.
Duane laughed. "Go ahead," he said, and I gleefully tucked the page in my pocket. I love it.
Today, I did the second-hardest thing I've ever had to do: I took away Mom's cat.
Mom's assisted living facility called last Thursday. "We strongly encourage you to consider moving your mother to memory care," the director told me. "I know we talked about this a year ago, and at that time you and your family decided she wasn't ready. We think she's ready now. She's refusing her meds. She's refusing to eat. She's wandering. She's more confused than ever."
I phoned my brother, Jeff, who has handled the bulk of Mom's care since she moved to Happy Acres a decade ago. "What do you think?" I asked.
"I think they're right," he said. "Mom has been to the emergency room three times since the middle of November. She seems relatively lucid after each hospital visit, but that fades fast. Within a day of returning home, she's out of it again. And her confusion does seem to be getting worse."
"Yeah," I said. "You're right. Even when she's lucid, she's confused. Remember when she called me from the hospital two weeks ago? She was speaking in complete sentences for once, but the sentences made no sense. She was asking to see the sherriff. She was talking about her dog, but she hasn't owned a dog since the 1980s."
Then I added, "The tough part is that she can't keep her cat if she moves to memory care. And she loves that cat."
My mother's health has been declining over the past few months, and it's produced a wee bit of year-end financial drama in our family. (The word "drama" is a bit of an exaggeration. Maybe it's produced some year-end financial consternation?)
As long-time readers will recall, my mother has been in assisted living for more than a decade now. She lives a mellow life filled with television, her pet cat, and a regular routine. Because she has cognitive problems, it's difficult for her to communicate. The doctors call her "non-verbal", and they can't explain the cause. She cannot form complete sentences (sometimes two words is tough!), and it seems as if she cannot formulate complex thoughts. It's a mystery to everyone.
Today — at this very moment — my brother is driving my mom to the emergency room. It's her third visit in six weeks, and it's always the same issue: vomiting, dehydration, confusion. During the previous two episodes, a few days of hospital rest helped her, and she returned to the assisted living facility feeling better (and actually able to carry on a basic conversation, like you might have with a two-year-old).
So, Mom's health is declining. That's important point number one.
But here's the thing. After browsing Reddit for thirty minutes or an hour, I'm left feeling unsatisfied. In fact, I'm often in a bad mood. After browsing Reddit, I have a negative attitude. My view of the world has deteriorated. Why? Because for all the fun and interesting things on Reddit, it's also filled with a bunch of crap.
You see, I also subscribe to /r/idiotsincars and /r/publicfreakout and /r/choosingbeggars — and dozens more like these. These subreddits highlight the worst in human behavior. And while viewing one or two posts from forums like these can be entertaining and/or interesting, consuming mass quantities of this stuff leaves me feeling dirty. (Plus, there's the Reddit comments which tend to be juvenile, dogmatic, and myopic. Reddit comments are so bad that Kim refuses to read them.)
It's taken a while, but I've come to believe that Reddit -- or the way that I use Reddit, anyhow -- is a net negative in my life. It causes more harm than good.
I've been thinking about his concept a lot lately. Behind the scenes, I've been making many small, subtle changes to my environment and daily routine. My aim is to decrease my depression and anxiety by removing people, things, and experiences that are net negatives and replacing them with people, things, and experiences that are net positives.
His name is Dave. A retired Naval officer, he’s written two novels and about to publish his third. His books (thrillers in the style of Dan Brown and John Grisham) have been well received and even won awards, yet he’s still a relative unknown in the competitive world of fiction.
Her name is Michal. She’s a residential and commercial painting contractor in central Ohio. She’s a natural artist, a trait she inherited from her father and passed on to her daughter. She’s truly gifted, yet has struggled to grow her young business.
His name is Rob. He wants to achieve financial freedom at a young age. Yet, fresh out of college, he has mountains of debt. He makes a good salary, but most of it goes to paying school loans and everyday expenses. He manages to save and invest $100 a month, but feels like he’s making little progress.
J.D.'s Intro
Last December, I took a trip to Europe with my cousin Duane. Before I left, I received email from a GRS reader named Matthias. "If you come through Switzerland, let me know," he said.
The stars aligned so that Matt was able to join us for several hours on a train across the Alps. He brought Swiss chocolate and a bottle of whisky. As we talked -- and became pleasantly buzzed -- he told me about how he and his wife tackle couple goals together via five-year plans for their future.
"I love this idea," I told him. "Will you write about it for Get Rich Slowly?" He did. This is Matt's story about creating a shared vision as a couple. Enjoy!
In the spring of 2006, I'd been living and working in Taipei, Taiwan for two years and my contract was about to expire. Soon, I'd be returning home to Switzerland.
On a pleasant weekend evening in my downtown flat, my Taiwanese girlfriend and I were reminiscing about all of the wonderful memories we'd made. We waxed nostalgic about the two years we'd enjoyed together. But it dawned on us that if we didn't make some bold moves, our relationship might be coming to an end.
We opened a bottle of fine wine in order to enhance the depth and wisdom of our conversation. Before long, we'd switched from sweet nostalgia to dreaming about our potential future -- together.
Imagineering the Future
My girlfriend had just graduated from college and was working in her first job. For my part, I’d just received an offer for my dream job — but it meant I'd have to move back to Switzerland.
The wine was an effective dream enhancer. We let our imaginations loose as we talked about how we could potentially live our lives together. The future took many shapes.
Where would we live?
What jobs would we work?
How could we both be as happy as possible together?
Honestly, it was overwhelming. Our lives three months ahead were like a blank slate. Everything seemed possible! Nothing was certain! Anything could happen!
In order to conceptualize our thoughts and concerns, we decided to write down all of our dreams and goals on yellow stickynotes. This mother of all brainstorming sessions took us half an hour. We each wrote down what was important to us, stuff we’d like to achieve, skills we’d like to acquire — in short, what we’d like to do with our lives in the next few years.
Next, we organized those dreams in terms of feasibility, urgency, and requirements. (To meet certain goals, we had to accomplish others first.) During this process, we tried to keep things fair. We both got the same number of stickynotes. All goals were open to debate, yet at the same time we tried to figure how to best help each other achieving them going forward! Our aim was to work together as a couple.
Step three was to put up an A3 formatted white paper on the wall, draw a timeline from 2006 till 2011 – yes, we were going to plan out the next five years of our life! – and arrange our couple goals in a meaningful way to our life’s “game plan”.
Our dreams included things like:
Get married.
Move to Switzerland.
Save for a new home.
Learn German.
Start a business.
Become parents.
In a nutshell, nothing extraordinary — the things young people usually dream of. It was clear that some goals had to be achieved before others. We agreed that pursuing them in a specific order made sense. Then we arranged them accordingly on the timeline.
Becoming a Dream Team
Planning our future was an ecstatic activity. In fact, doing so was the defining evening for our relationship.
That very evening, we actually decided to get married. We decided to chase our dreams together as a team. She was 23 years young; I was 26. Little did we know that this shared activity would help us tremendously on the path to our dream life. We had become a dream team!
Note from J.D.
Last October, I had a chance to read an advance copy of Grant Sabatier's new book, Financial Freedom, which was just released this morning. I liked it. I loved parts of it. In fact, the second chapter of Financial Freedom inspired my article about how time is more valuable than money.
Today, I'm pleased to present a (heavily edited) excerpt from that second chapter. Here's Sabatier on why time is more valuable than money -- and why you can and should retire early. (Links and photos are from me. Everything else is from the book. Note, however, I've heavily edited this chapter in order to abridge it and to make it more readable in blog format.)
If some ninety-year-old rich dude offered you $100 million to trade places with him, would you do it? Of course not. Why? Because time is more valuable than money.
The average person has approximately 25,000 days to live in their adult life. If you’re reading this, you likely need to trade your time for money in order to live a life that is safe, healthy, and happy. But if you didn’t have to work to make money, you’d be able to spend that time however you wanted.
No one cares about your time as much as you do. People will try to take your time and fill it up with meetings and calls and more meetings. But it’s your time. Your only time. Financial Freedom is designed to help you make the most of it. Make money buy time.
My goal is to help you retire as early as possible. When I say retire, I don’t mean that you'll never work again, only that you’ll have enough money so that you never have to work again. This is complete financial freedom — the ability to do whatever you want with your time.
Traditional Retirement Advice Doesn't Work
I don’t ever plan to retire in the traditional sense of the word, but you could say that I’m “retired” now because I have enough money and freedom to spend my time doing whatever I want. I no longer have to work for money, but I still enjoy making money, and it’s attached to many of the things I enjoy doing. I love working and challenging myself and hopefully always will, so checking out to a life of leisure just isn’t my vibe.
If you want to “retire” sooner rather than later, you need to rethink everything you’ve been taught about retirement and probably most of what you’ve been taught about money. As a society, we have collectively adopted one approach to retiring: get a job, set aside a certain portion of your income in a 401(k) or other retirement account, and in 40+ years you’ll have enough money saved that you can stop working for good.
This approach is designed to get you to retire in your sixties or seventies, which explains why pretty much every advertisement about retirement shows silver-haired grandmas and grandpas (typically on a golf course or walking along the beach).
There are three major problems with this approach:
It doesn’t work for most people.
You end up spending the most valuable years of your life working for money.
It’s not designed to help you “retire” as quickly as possible.
The first major problem with traditional retirement advice is that even if you follow it perfectly (and most people usually don’t), you still might not have enough to live on when you are in your sixties.
The popular advice to save 5% to 10% of your income isn't enough. You should be saving as much money as early and often as you can. If you want to be sure you'll be able to retire at 65, you need to start (and keep) saving at least 20% of your income from the age of 30.
I read a lot of books. Nearly every book has some nugget of wisdom I can take from it, but it's rare indeed when I read a book and feel like I've hit the mother lode. In 2018, I've been fortunate enough to read two books that I'll be mining for years to come.
The first was Sapiens, the 2015 "brief history of mankind" from Yuval Noah Harari. I finished the second book yesterday: Thinking in Bets by Annie Duke. Duke is a professional poker player; Thinking in Bets is her attempt to take lessons from the world of poker and apply them to making smarter decisions in all aspects of life.
"Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out," Duke writes in the book's introduction. Those two things? The quality of our decisions and luck. "Learning to recognize the difference between the two is what thinking in bets is all about."
We have complete control over the quality of our decisions but we have little (or no) control over luck.
The Quality of Our Decisions
The first (and greatest) variable in how our lives turn out is the quality of our decisions.
People have a natural tendency to conflate the quality of a decision with the quality of its outcome. They're not the same thing. You can make a smart, rational choice but still get poor results. That doesn't mean you should have made a different choice; it simply means that other factors (such as luck) influenced the results.
Driving home drunk, for instance, is a poor decision. Just because you make arrive home without killing yourself or anyone else does not mean you made a good choice. It merely means you got a good result.
Duke gives an example from professional football. At the end of Super Bowl XLIX, the Seattle Seahawks were down by four points with 26 seconds left in the game. They had the ball with second down at the New England Patriots' one-yard line. While everbody expected them to run the ball, they threw a pass. That pass was intercepted and the Seawhawks lost the game.
Armchair quarterbacks around the world complained that this was the worstplay-call in NFLhistory. (I've linked to just four stories there. They're all brutal. You can find many more online.)
Duke argues, though, that the call was fine. In fact, she believes it was a smart call. It was a quality decision. There was only a 2% chance that the ball would be intercepted. There was a high percentage chance of winning the game with a touchdown. Most importantly, if the pass was incomplete, the Seahawks would have two more plays to try again. But if the team opted to run instead? Because they only had one time-out remaining, they'd only get one more chance to score if they failed.
The call wasn't bad. The result was bad. There's a big difference between these two things, but humans generally fail to differentiate between actions and results. Duke says that poker players have a term for this logical fallacy: "resulting". Resulting is assuming your decision-making is good or bad based on a small set of outcomes.
If you play your cards correctly but still lose a hand, you're "resulting" when you focus on the outcome instead of the quality of your decisions. You cannot control outcomes; you can only control your actions.
