Month: December 2019

The snorkeling in choppy waters analog

We were out snorkeling on a beach with choppy waters recently. Given the strong waves, it was a fascinating process trying to get further into the water.

As attempting to swim hard when the tide is against you is futile, you have to wait out the wave – either staying in the same place or moving slightly backward when it happens.

This is followed by a period when the water recedes. That’s the golden opportunity – any swimming done at this time capitalizes on the existing momentum.

Next, we have that brief period between waves – again, good opportunity to make progress.

In summary, start by deciding where you want to go.

Pay attention to the natural momentum of the waves.

Stay in the game when things are going against you.

Make good progress in the quiet periods.

And, capitalize when you see momentum in your direction to make meaningful progress in spurts.

Sounds a lot like life.

2/10 effort for 8/10 outcomes | Personal Finance

The list of areas I seek to optimize has become fewer and fewer over time. As I reflect on the year that’s gone by, I’ve come to realize that this list is down to just two areas – work and family. As much as I’d like to include self-care/fitness on the list, I can’t do that with a straight face.

For everything else, I’ve operated with what I consider the satisficer credo – expend 2/10 effort for 8/10 outcomes and make peace with the fact that these outcomes will never be a 10/10.

In practice, this means accepting that, in areas like personal finance or travel, I’ll likely not have the best credit card or flight deal. Instead, I work with a collection of simple solutions that I don’t need to change very much.

So, I thought I’d document these solutions in a series of posts – my hypothesis is that there’s a series in here that culminates in a post with an updated set of life principles/mission statement (this might not work :-)).

And, I thought I’d get started with Personal Finance. The tactics in this one will be most applicable to folks in the US – that said, I’m hopeful the principles will hold. Also, I choose I and we interchangeably to mix it up – in our case, all “I” decisions have been”we” decisions since we got married.

1. One primary credit card – Chase Sapphire Reserve. I use one primary credit card – as of this year, it is the Chase Sapphire Reserve. Some optimizers I trust said it is among the best credit cards out there and I can see why – I have been impressed by the rewards. I was loyal to AmEx for nearly a decade – especially as they were generous with credit limits when I first came to the US. But, their rewards weren’t working out for us and I only have place for one primary credit card. I took a 20 credit score hit when I shut that card down. But, that’s the price I pay for simplicity. I’m sure it’ll work out fine in time.

2. Secondary credit card – Amazon Prime Rewards Card. This was a 2019 experiment as it seemed like a no brainer to get 5% back on Amazon purchases. It is here to stay.

3. 2 bank accounts – a physical and online high yield savings: We set up a Bank of America account when we first moved – this remains our primary physical bank. We added an online bank account for high yield savings – Marcus by Goldman Sachs. This is another in the no-brainer category. 

4. Treat equity like a Cash Bonus: Many companies offer equity compensation. I choose to treat equity compensation as I would a cash bonus – rationale as explained here on the Wealthfront blog.

5. Simplify long term investing – 401(k), backdoor Roth conversions, and automated transfers for investments with Vanguard Advisory Services: We max out our 401(k), use backdoor Roth conversions, and automatically transfer the rest into Vanguard Advisory. Vanguard helps us  to help us with investments at a low cost ($3 for every $1000 under management). I’m not expecting them to help us beat the market and generate jaw dropping returns. But, I’m expecting them to help us save us from ourselves and do an 8/10 job in the long run.

6. 1 Google spreadsheet for all the math: As I’ve shared before, we maintain a simple Google spreadsheet to keep track of all our expenses and investments.

Now, here’s the interesting part – there are ways to optimize every one of these steps. You can have many credit cards which accumulate points in fascinating ways. You can do the same with a myriad of bank accounts. If you receive equity compensation, you can aim to buy and sell in ways that maximize your gains. And, of course, the biggest optimizations come in the area of investing – there are literally millions of possibilities.

But, there’s also limited time in the day and infinite ways we can spend this time. So, we are left with no perfect decisions. All we can do is understand the trade-offs and thoughtfully choose our path.

Implicit to the decisions we’ve made above is an acknowledgment that we’re not going to measure our lives by the amount in our bank accounts. We’re not going to be the folks with impressive year-over-year growth rates on our savings and investments. We’re also not going to be the folks who made millions of dollars with simple investments in crypto/insert-cool-new-thing.

Instead, the goal is to do the essentials, avoid stupid mistakes, and use the money we earn from our work to create the sort of life experiences that maximize quality time spent with loved ones, learning, and a positive contribution to problems that we consider meaningful.

This gets to the power of pursuing simplification in all but a couple areas in our lives. It helps us avoid time spent optimizing the things that don’t matter so we can create space for the things that actually do.

Appreciation as a second tier activity

When you remove the segment of folks who’ve sadly never learnt – as a result of either nature or nurture – to appreciate what they have going for them, we are left with two kinds of people.

The first kind prioritize appreciation as a second tier activity. When we fall into this category, we remember to appreciate things and people from time to time – typically when we  have a rare burst of free time, the odd reflective conversation, or (most commonly) after a painful experience. During these moments, we find ourselves appreciating the many good things we’ve experienced since the last such reflection.

And, since painful experiences are the most common trigger, most of this appreciation happens long after it should have happened. We remember folks we should have thanked when they were around, appreciate processes that worked without us paying attention to them, and situations where we had more going for us than we realized.

The second kind simply prioritize appreciation high enough to appreciate people and things before they are forced to. They find the time to do it every day until the practice becomes habitual.

It is a seemingly simple choice.

But, more often than not, it replaces a longing for happiness with the presence of the real thing.

PS: Something weird happened with this post on WordPress – a draft version showed up on RSS but didn’t show up on the blog yesterday. Sorry if this reappears on your RSS feed/email for the second time.

Kicking off reflection season

I call the period between thanksgiving and new year “Reflection Season.” It marks the time of the year when I make it a point to slow down and take stock.

I’ve been lucky to work in places where the last week of the year is a “shut down.” However, in addition to that, I’ve made it a tradition to take most of the weeks leading up to the final weeks of the new year off. It is my yearly attempt at prioritizing an extended period of rest and reflection.

This period generally means a marked shift in priorities. While I increase the focus on time with family, the biggest shift is prioritizing self-care and reflection in place of time spent working. Since becoming a parent 3 years ago, such periods are rare and are, thus, treasured.

So, as I write this, I look forward to plenty of reflection on the year that’s gone by and look forward to synthesizing everything I’ve learnt.

I hope to have more time to think and write as I hit refresh. I’m excited about that… and hope you’ll be able to carve out time to set aside some time for reflection and rest as we approach the end of 2019 too.

Internalizing the sine wave

One of the multi-year projects I committed to in the past decade was improving my equanimity. I struggled with equanimity in my late teens and early twenties and wrote about my struggles on this blog.

While awareness is a good first step, regular practice is quite another. And, of the many experiments I tried, the one that contributed most to the improvement I’ve made has been internalizing the sine wave of life experiences.

The idea is simple – I visualize life in terms of a series of ups and downs. When I have an up, I gently remind myself that a down is likely around the corner. This reminder injects that touch of paranoia to make sure I’m not getting too carried away.

Image result for sine wave

Similarly, when I experience a down, I remind myself that an up is likely around the corner. This reminder helps inject that touch of optimism that carries me through.

Over the years, I’ve come to think of the sinusoidal nature of this life experience as a fact of life. The gap between an up and a subsequent down may vary – sometimes, we move from one to another in a matter of days and, during other times, it may be a matter of months.

But, the pattern of ups and downs remains. And, understanding and internalizing that pattern changes our experience of those ups and downs in a wonderful way.

Making peace with limits

Much of learning to prioritize is learning to make peace with limits.

Limits on…

…how much time we have in a day.

…what we want to accomplish in that slice of our life.

…how much we can get done in the time we have.

…how much we control.

The more we replace any time we spend complaining about them or wishing they went away with time spent acknowledging them and figuring out how we can do our best within them, the more productive we’ll be.

Wasted envy

A reminder for the next time we entertain envy – a large proportion of the envy felt around the world is wasted.

It is wasted because we lack context of what that other human being is going through. We think they have the perfect life, the perfect family and the perfect career. However, it is only when we get closer do we stumble onto the fact that the reality isn’t anywhere as rosy as it seems.

Every once a while, we might stumble upon a person we consider successful in their career who is also a success in their life. But, it happens less often than we might think.

The stuff we tend to envy – wealth, prestigious degrees, power, and fame – don’t guarantee happiness. Instead, they often make it that much harder to find it.

If we must do so, envy folks who are happy. Find out how they design their lives to be so and channel any energy from that sort of envy to applying it in our own lives.

The rest is wasted.

Getting feedback on that workshop

Large group meetings and workshops are expensive and, thus, important to get right (or at least as right as possible). A simple technique I’ve found useful to keep honing those large group meeting/workshop skills: carve out 5-10 minutes at the end to ask for feedback.

Sending a survey can work for massive events as we’ll likely end up with a large enough sample. But, for most of us, organizing a massive event isn’t the norm.

So, in these 5 minutes, we can choose to either request folks to fill up a simple survey or just ask folks for 1 thing that went well and 1 thing they’d improve. I’ve seen both work really well.

Regardless, the main thing isn’t so much the technique of asking the question (this can be tweaked) – instead, it is to simply prioritize it enough to ensure it is on the agenda.