Sep

26

Honesty Is Sanity

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Great message from Harun I., a frequent contributor to Charles Hugh Smith’s website, OfTwoMinds.com I include his quote and then provide my thoughts at the bottom.

It is not under-education or an inability to think critically which part people from their money, it is their uncontrolled emotions. Faced with purchasing a house which they know is unaffordable or choosing to rent they will not bother to run the comparison as long as it is their dream and “someone” told them they could. Had grumpy old Mr. Critical Thought been allowed to show up and run a spread sheet or put the numbers into Quicken they (the cold, emotionless reality of the numbers) would have irrefutably deprived them of their “dream”.

This drama plays out everyday at different levels across the spectrum of human psychology, the food you should not eat because you are morbidly obese, the years-old but never used exercise equipment in the garage, the spouse or partner who is abusive but you can’t leave, the dress, shoes, house, boat, car you have to buy but cannot afford, the candidates we vote for because we like the way they part their hair. The inconsistencies, contradictions and convolutions are endless and mind-boggling to the point of madness to the observer.

Facing your inconsistencies and contradictions is a never-ending battle.  To avoid succumbing to negativity and false senses of happiness (mindless consumerism, distractions, addictions/vices), I’ve found the following help:

  • Surrounding yourself with friends, family that support and encourage your growth as a human.
  • Feeding your brain positive information (listening to and engaging your mind in positive thoughts).
  • Being introspective (journaling, silent thought) and determining your own value system, not one that your parents/your society gives you.
  • Being consciously aware of your own strengths, weaknesses and limitations.  Actively working to tilt the playing field in your favor.
  • Being honest with yourself, your lifestyle and those around you.  Honesty is sanity.

Takeaway:  Life is too short to waste time with distractions.  Since your mind can be your best friend or worst enemy, it makes sense to work on your attitude/worldview/values to have more peace of mind.

Jul

20

Model T’s and Loved Ones

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I saw a beautiful Model T the other day.  This 90 year-old entry-level vehicle is shown below.  It amazes me that a caring owner can keep something this old in such good working order.

Model T2

Since America is an instant gratification society with an ever-declining attention span, I was delighted to see this piece of human accomplishment so well-maintained and well cared for.  It brought to mind some important facts.

There are many parallels between taking care of a motor vehicle and taking care of your loved ones.  For husbands and fathers, it is important to know that the values that make cars last also make relationships last.

Preventative Maintenance - The Model T obviously required an inordinate amount of maintenance over the years from its owner.  Preventative maintenace is part of being a great husband and great father.  It takes years and years of daily care and attention in any relationship to build up a level of trust.

Patience - A loving relationship requires extraordinary amounts of patience and work.  It is easier to get into flings and shallow relationships/friendships, but the rewards aren’t as great.  The rewards of an honest, patient relationship are worth it.  A high level of trust makes it easier to get through the rough patches.

Pride - The man who owned the Model T took time out of his day to explain to me the nuances of his vehicle.  He showed me the old-fashioned horn, the gears and the antique headlights.  His actions and demeanor spoke for themselves.  Pride in your loved ones comes from patience and mutual respect.  Pride is not buying an expensive ring, it is holding the door; fifty years later.

Takeaway:  There are some cars that are new and flashy that never satisfy an impatient owner for very long.  A luxurious Buick or Cadillac, well-maintained and well-cared for, only gets better with age.

Your family is with you from the time you are an infant until the time you have children or grandchildren of your own.  Treat them them with pride and your investment will last a lifetime.

Model T4

Jun

25

Mid Year Goal Review

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As we approach the end of June, take some time aside and see how the year has gone thus far.

This time to reflect is important since if we are working hard,  but not smart, all our effort is for naught.

There is nothing so useless as doing efficiently that which should not be done at all. – Peter Drucker

Likewise, it is important to take a step back and think about our everyday habits and behaviors and scrutinize whether or not those daily actions are bringing us closer to or farther from where we would like to be.

If we are dissatisfied with our direction in life, we must CHANGE something to achieve different results.

If you always do what you’ve always done, you’ll always get what you’ve always gotten.

Growth only comes from exiting our comfort zone.  As men, we should always seek to improve ourselves:  on the job, at home, wherever you have a prescence.

Coasting, resting on your laurels, counting your chickens are all forms of cancer which will kill even the most talented among us.

Complacency Kills

With that, I am displaying a very simple goal exercise which takes a few minutes, which can shed light on your progress.

Simply list in plain English that which IS working and that which IS NOT working.

Things that have been working

  • My relationship is healthy; I proposed to my girlfriend, now my fiancee.
  • I created and expanded my website, inthon.com
  • I am still exercising regularly and I have increased my strength dramatically
  • I am continuing to feed my brain healthy, positive, life-affirming messages and doing my best to avoid negative thinking.

Things that have not been working

  • I still read too much, write too little.
  • I do not take as much time as I should to be reflective and journal.
  • There is room for improvement at work.
  • My sleep patterns have been off since December due to late nights and napping.

This is a very rudimentary exercise, but it forces you to be honest and assess what is working and what isn’t.

Takeaway: Growth does not happen until we exit our comfort zone.  This simple exercise can give you a good idea of where you are progressing and where you are stagnating.  Please give it a try.

Jun

9

How to Prepare for a Depression

Filed Under Intellectual Honesty | 2 Comments

I’ve spent a great deal of time this weekend thinking about my financial future as well as what trends which will emerge in an upcoming Depression.  I feel like reading all sides of the economic spectrum (good and bad) from a variety of sources (technical/fundamental analysis, Bloomberg, blogs, Fortune, CNBC, talking to people in finance/banking) gives me an Accurate Model of Reality and a good sense of what I should do to prepare.

It is easy to read a lot of economic and financial blogs and realize the awful shape the economy is in and then do nothing.

My mind tends to race when I read about this and it is good to slow it down and think about exactly what I need to focus on to increase the safety of myself and those that I love.

I’ve been in situations like this before where I have a good idea of what I see happening, but I don’t take the necessary, decisive action to prepare.  The time has come where the benefits of taking action now outweigh the costs of not taking action.

After thinking about national issues last weekend, I realized a few major trends:

  1. I am doing a great job of thinking about this and I should maintain my state of awareness.
  2. I realize I have a fairly decent situation compared to most, which is comforting.
  3. I realize that a healthy attitude beats money in the bank everyday in terms of who will adapt best to the next 20 years.
  4. Complacency is the enemy. I keep coming back to this idea since it is a theme I find emerging in every aspect of my life (work, relationships, investing, etc).

I began my weekend watching some of Chris Martenson’s Crash Course.  If you haven’t seen it, I highly recommend it.  He provides a very realistic scenario of what can happen if the macro trends (economic, energy, demographic) do not change.  I am adding his blog to the blogroll since he has a useful site and honest commentary.

After viewing this, I began listing things that can be done to increase my level of actual or perceived safety.  Among these:

  • Improving my performance and distinguish myself at my current job
  • Improve relations with neighbors/family that are nearby in case of an emergency.
  • Eat healthy and take care of my body.
  • Start a second job or find a second source of income.
  • Spend less money, save more money.
  • Take time to appreciate my good fortune.
  • Buy a handgun and ammunition.
  • Optimize my investments to profit from a collapse.
  • Buy hard assets and “junk gold” (jewelry) in the event the dollar loses its value.

Assessment of factors:
Job – Needs improvement.  I work for a bank which is extremely risk-averse.  They have been in business almost 200 years.  It is a partnership, which means the company does not have to “beat earnings”, is not subject to moronic “upgrades/downgrades” and they could also not be the victim of any insane shareholder activist campaign.  My division has high visibility and is run by a rising star within the firm.  The firm is well-managed and very down to earth.  The risk is that I am not indispensable.  I have decided to make a concerted effort to improve my performance and contribution at work since I know that no company is immune to layoffs.

Bad/Expensive/Stupid habits – Good.  I do not drink, smoke or gamble.  One of my worst habits tends to be reading too much of the same thing and writing/contributing too little.  Wasting time is a bad habit, but it will not wreak havoc on my financial situation.

Safety – Needs Improvement.  I live in an extremely safe town in Massachusetts and the people are quite soft and easygoing.  I do not know basic self-defense or own a handgun, which could be problematic.  In a disaster, buying a gun will be nearly impossible.  It would make sense to purchase a firearm and ammunition before a disaster happens.

Food safety/Water safety – Needs Improvement.  I consume mostly fruits, vegetables, meat, and water.  I consume few packaged food products, which are unhealthy and expensive.  Unfortunately, I am totally reliant on the grocery store and my apartment complex for food and water.  I have no access to any farmers and no one I know grows their own food.  I have no excess food/water stored anywhere, when I probably should.

Health – Good.  I am not on any medication, I eat sensibly and I exercise regularly.  I do not have any dangerous hobbies like hang gliding, rugby or rock climbing.

Temperament – Good.  I learned from being around rich, miserable people that money does not buy happiness.  I cannot express how grateful I am for learning this lesson at such a young age. I also realize that we are in a unique period in history that could very well be the start of a new depression or ugly stretch of history.  I am not naïve enough to think that my generation or my country or my lifetime will be immune from diseases, famine, war or other events that have plagued human history.  This grounding is one of the things that gives me the most peace of mind.  I have gotten over my teenage angst and I realize that life is luxurious in the United States.

Ego – Good.  If the only jobs available were manual, I would see no problem taking a manual job.  I obviously feel better about working in an office, but if tragedy happens and I need to earn money in a different way, I can do that without a crushing blow to my ego.

Level of frugality – Good.  I have owned the same one suit since about 10th grade.  It is 11 years old and still going strong.  I am a slight foodie, but I always wince at the mention of an expensive dinner.  I have a high threshold for boredom and a weekend reading books suits me fine.  I am not worried at all about impressing others with a fancy apartment, fancy clothes or fancy car.

Transportation – Good.  I have access to a car is fully paid, reliable and insured.

Dependents – Good.  I have no children/parents/pets/friends to support and I do not plan on adding any in the near future.

Cash on hand – Needs Improvement. I do have savings in the bank, plenty of month’s worth, but none of it is at home.  If there was some idiotic “bank holiday”, I would be temporarily unprepared.  I need to save more money at home in small bills in case of an emergency.

Credit -  Good.  I have access to a large line of credit; however, everyone’s credit would dry up in a large economic meltdown so it is a moot point.

Debt – Good.  None material.

Entertainment – Good.  I don’t need to get drunk/high to have a great time.  Watching Seinfeld reruns or reading is highly enjoyable and I don’t need constant stimulation/distraction to feel at ease.

Retirement – Good.  I have no plans of retiring anytime soon and I would prefer to work until I die.

Overall:  Good.  I need to focus on my primary job since I have a great amount of control over my performance and it is, by far, the most important source of income/safety.  I also need to focus on saving more money, keeping larger food buffers and having ready access to cash.

Other thoughts from the weekend:

  • My main concern is that too many people fall on the dependent side of the equation.  Municipal payroll/pension obligations, government healthcare, government schooling/day care, food stamps, government housing and other services are all facing severe pressure as the market declines, taxes rise and dependency increases.
  • To fund these dependencies, property, income and business taxes will rise.  Rising taxes will kill businesses which will put more people on the dependent side of the equation.  This vicious cycle will lead to far fewer small businesses, which are the biggest source of jobs in this country.
  • The only way out is permanent decreases in entitlements and people coping with a lower standards of living.
  • The underground economy will thrive.  Marijuana use will increase due to futility of jailing violators.
  • The Armed Forces/Peacecorps will swell as scores of college kids find no jobs available for them.  Degrees are ubiquitous and an older workforce, unable to retire, will fill remaining jobs.
  • A lot of people’s opinions are driven by whether or not things are going to get better or worse.  I am firmly planted in the “worse” category based on data.  Better seems to be driven by optimism.

Takeaway:  It is always good to do a self-checkup and see how well you can withstand an economic catastrophe.  Please give it a try.

Thank you for reading.

Apr

26

Being Grateful for Music

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I listened to George Gershwin’s Rhapsody in Blue on my iPhone today and I made a conscientious effort to listen as carefully as I could.  As I listened, I couldn’t help but ask myself some questions:

  1. How did someone hold such a harmonious melody and accompaniment in their head?  Was this whole production stored in the composer’s mind?
  2. How could anyone take such thoughts and translate them onto sheet music so that musicians could play it?  Did the composer due this all at one time, or did he have to conceptualize each part separately?  How did he know what it would sound like when finished?  How was this even possible before computers?
  3. How much practicing and trial and error went into the final product?  Months?  Years?  Decades?

Just listening to the first 30 seconds (click link above) is enough to impress upon you the amount of effort and soul that went into producing this work of art.  You can hear it right from the beginning as the clarinetist manipulates the clarinet to produce the emotion that starts the song off on such a wonderful path.

There is so much richness to experience in a simple YouTube video it is truly remarkable.  To be able to listen to the world’s finest musicians playing at their peak is something that we have the luxury of having at our fingertips.

The modern is world is filled to the brim with luxuries; if only we take the time to appreciate them.

Albert Einstein said it best when he said:

There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.

Thanks for reading.

For more on gratitude, click here.