Finance – Winning at Dadding

Change Your Actions, Change Your Mind

I haven’t had much time to work on the blog lately. I got a promotion at work a few months ago, which was kicking my butt until I accepted an even better offer out of state. After giving my notice at work, my employer decided to let me go. So I have a couple extra weeks to get our house ready to list, pack up, and move to Kansas City, Missouri for the new job.

At first I was bummed about their decision to not let me finish out the last two weeks, but let’s look at the positive side. I get to spend more time with my family for the next few weeks. I don’t have to go to work tired when our daughter isn’t interested in sleeping through the night. And my wife is pretty happy to have me around the house more, too!

I was let go from my job today. When I told my wife she said, “Let’s celebrate!!”

I love this woman!!
— Schlueterism (@schlueterisms) March 4, 2020

And thank God we decided to prioritize our spending and build up our emergency savings. The situation would have been different if I had made the decision to live paycheck to paycheck and suddenly found myself with no income for the next four weeks. There are actions I have taken to change the way I think about the world, to practice forgiveness and acceptance, and to accept responsibility for any situation in which I find myself.

For some people, getting let go would have resulted in the feeling that a great injustice has occurred, and a few years ago that is exactly how I would have reacted. But it became apparent that the world is not happening to me, but the world and I are symbiotic. As German philosopher and psychologist Ludwig Klag says, “[T]he world pushes back as we push through it, no mind is an island but always with other ‘things’ from the world.” Which brings us to the difference in the way optimists and pessimists think about the world. A broken leg means not being able to walk and lost wages for the pessimist but the optimist thinks, ‘Oh, joy. I get some time off work to pick up that book I haven’t had time to read!’ Optimists and pessimists react differently to the same situation, which tells us that the problem is not ‘out there’ in the world, but ‘in here’ in our minds.

Ludwig Klage — ‘The world pushes back as we push through it’

Rather than think about how the world affects me, I have to think about how I affect the world. There is so little we have control over, but one thing is certain, we have control over our own actions. I ask myself what is my motivation when I make a decision. Is it out of self interest do I think about how it will affect others? For example finding a way to have an emergency savings account rather than buying myself something I don’t need. Even better is taking the time to discuss these decisions with the people who will be affected. My wife and I spent a lot of time discussing the decision to leave my job and move back home. And the decision was based primarily on what was the best thing we could do for our daughter.

If this is something you have struggled with, just know that over time you will get better at thinking about others the more you practice doing it everyday. If you change your actions, you will change your thinking.

One more thought before I wrap up. With my schedule unexpectedly opening up, I’m already filling it with things to do. I love to work, and I’m always thinking about how I can be more productive. Which brings me to this; When I was in college, an architect that we interviewed in our professional practice seminar said we could either be great with our families or great at our jobs, but we couldn’t be great at both. Ever since I heard that I wondered if it were true and what kind of person I would be. It wasn’t until I heard Ramit Sethi talk about the stories we tell ourselves that prevent us from reaching our full potential that I knew it wasn’t. Many times our self doubt is the result of what psychologists call cognitive distortions. These cognitive distortions are created by our often imperfect perceptions of the reality around us and an unquestioning acceptance of what we expect our lives should be. There’s a really great book on this subject, The Lies We Tell Ourselves by Jon Frederickson.

Support Independent Bookstores - Visit IndieBound.org — ‘Embracing life on its own terms can be difficult. As we embrace life as it is, our illusions collapse. We need emotional courage to bear the pain without running, explaining, or justifying.’

What is stopping me from being a great father and husband and being great at my job? When I find myself thinking that I have to make a choice between one or the other I have to question if I even have to make a choice! I have found that these decisions are most often driven by selfishness. ‘I don’t like my job so I can use family as an excuse to get out of work.’ or ‘Hanging out with the family isn’t that fun so I hide out at work.’ Truth is the only choice I have to make is to not be selfish. I can be great at my job and great with my family if I choose to. The only thing that can prevent me from being great at anything is me and my own silly mind.

Top Books for Better Dadding

How early should you start reading to your baby? You can start the same day they are born if you are so inclined. The psychologist in the NICU told us reading to our baby is one of the most important things we can do for her cognitive development. Newborns are taking in a lot of information so read to them and let your baby hear your voice and the variety of sounds that it produces. If you are running out of things to say to your baby (after all it is a one sided conversation for many months) and find your vocabulary is limited to few sentences repeated over and over you can just read books you enjoy outloud to your baby. It’s a win-win situation!

What to Expect: The First Yea r

Heidi Murkoff; Sharon Hazel

My wife and I read this book together while she was pregnant. There are a lot of myths and other misinformation that we pick up through life about being a parent and how to take care of our children. For example, I always thought you had to pat your baby on the back to make them burp after eating. Not so at all. Most of the time babies burp on their own, just make sure you are holding them upright should more than air come up with that burp! This book is a great starting point for knowing what to expect when you are a first time parent and how to just about any situation that you can think of during your first year as a parent.

The New Dad’s Survival Guide: What to Expect in the First Year and Beyond

Rob Kemp

The New Dad’s Survival Guide was one of the first books I picked up while getting ready for our daughter to arrive. If I were going to write about book about what you need to know as a first time, I wouldn’t, because Rob Kemp already wrote an excellent book to cover what you need to know. It’s about more than how to change diapers and burp your baby, but also covers things to like how to communicate with your partner and a heads up for some of the mistakes we make when trying to adjust to this new way of life.

The Gardener and The Carpenter

Alison Gopnik

What is your approach to parenting? Are you trying to shape your child into a specific person following strict guidelines or do you allow your child to come into the would and learn to flourish on their own? I think Dadding teaches me as much about myself as I can teach my daughter Parenting is a fairly new term. In the past thirty years, the concept of parenting and the multibillion dollar industry surrounding it have transformed child care into obsessive, controlling, and goal-oriented labor intended to create a particular kind of child and therefore a particular kind of adult. Gopnik shows that although caring for children is profoundly important, it is not a matter of shaping them to turn out a particular way. Children are messy and unpredictable, playful and imaginative, and very different both from their parents and from each other. The variability and flexibility of childhood lets them innovate, create, and survive in an unpredictable world.

The Consolations of Philosophy

Alain De Botton

I read this book to my daughter in the NICU. There was a local bookstore down the street from the hospital and this book was mentioned in an finance book I was reading at the time (Hagstrom). The book is an insightful look into how philosophy helps us to understand ourselves and the world around us. I read his book The Architecture of Happiness while I was in college and it completely changed the way I felt about what I could accomplish as an architect. Consolations changed the way I felt about what I could accomplish as a human being by changing my perspective.

Investing: The Last Liberal Art

Robert G. Hagstrom

In the year leading up to our daughter’s birth I was trying to learn as much as I could about personal finance and investing. I knew enough to know that the more money I invested the greater my annual income would become. I didn’t expect this book to be such a paradigm shift in the way I thought not just about investing, but innovation and insight. Hagstrom uses Charlie Munger’s ‘Latticework of Mental Models’ as a basis for understanding business models and how we can take the principles from one discipline and apply them to others. Depth of knowledge is great, but breadth of knowledge is where true innovation comes from.

Check out IndieBound.org for children’s books and support local bookstores

Countdown to the New Year! …And New Decade!

The countdown to the New Year is begun! As we usher in 2020, this is a good time to reflect on the last ten years. How is life different today? What did I do with the last ten years? Am I where I want to be and if not, what could I have done differently? Just as I try to reflect on the day I have just finished, I think this is good opportunity to reflect on the past year, and the past decade.

This could be a very depressing exercise. Thinking about the failures and successes of the last ten years, I tend to get hung up on the failures. In 2010 I did not give a single thought to the idea of 2020. I definitely never thought I was capable of being a father. And I’m not convinced 2010 me thought I would live to see it! Thankfully, I did survive despite many mistakes along the way and it is those mistakes that I have learned from. Learning to learn from my mistakes gave me the opportunity to make corrections and reevaluate my direction. So maybe 2010 me was a complete tool, but I can look back at the last year and feel content knowing I did my best.

Let me share some of those mistakes from the past ten years and how I intend to improve over the next ten:

Be a good custodian of my financial health

At the beginning of 2010 the future never looked so bright. I saved a ton of money in my high yield ING Orange Savings account while I was in the Army and I had built up a decent portfolio investing through Sharebuilder. Both accounts were bought out by Capital One, who coincidentally also owned my high interest car loan on a 2004 Nissan Sentra that I would sometimes fall behind on. I did pay off that car loan six months early in 2012 after working a summer job painting houses.

I burned through the savings and investments within two years, mostly spending it at bars and on alcohol. I bought anything I wanted as long as I knew it wouldn’t overdraft my account (occasionally my knowledge was mistaken) and ended up living in a house that looked more like a storage unit. And I somehow left college with over $90k in student loans. WTF?

After I finished my internship 2017, the first decent pay I received since leaving the army, and still didn’t have any money I started to realize I couldn’t keep living that way.

I’ve jumped from job to job all my life but I found a decent job after college even though I didn’t complete my degree. I started to get serious about managing my money. I started to measure how I spent it with something kind of like a budget and I started to focus on the psychological reasons why I kept acquiring so much crap. Cleaning up our cluttered space (my wife had to live in that mess too!) was like an overweight person getting into shape. First I stopped getting more stuff and then I slowly started getting rid of stuff that I did not need.

I started to be more mindful about my spending habits because of an investing app I was using and I started to use that money I saved from not buying things I didn’t need to pay off debts. First thing was the credit card, and today I pay off my credit card in full every month. Over the last ten years I slowly built my credit back up. Now I have a credit card that pays me! I have only just begun to put a dent in my student loans, but the total owed is shrinking now rather than rising. And I have a small emergency savings and the beginnings of a retirement fund.

I started trying to be a better employee and co-worker which is a real effort for me. And for some reason they decided to give me a chance. I got a raise and a promotion this year!

If I can keep it up 2030 me will be grateful for 2020 me.

Be the best husband, father, and friend I can be

When I came home from the Army in 2010 I had no friends welcoming my return. If I wanted to hang out with people I went to the bar and made friends for the evening, assuming I didn’t run into people I used to know. I’ve had a drink thrown in my face before, and I wish I never lived a life that was so selfish and arrogant that someone would want to throw a drink in my face, but that’s who I was and I have to learn from it.

I always thought being a loner was an asset. I hated going out to eat or going to movies with friends because they could never decide where to go. Or when they did I didn’t care for their choices. It was easier just to go by myself because then I could do what I wanted to do. It seems obvious now, but it didn’t at the time. What I was saying to my friends was that being in their company was an inconvenience to my wants. I thought I was a good person if I did anything nice for anyone. Truthfully, If I did anything for anyone it is because I expected something in return.

I never realized how selfish I was until a couple of years ago when I had to sit down and rethink my life. I certainly could not blame other people. If people who had never met each other all had the same reaction to me then the only common denominator is me. It’s not like I set out to be a crappy person, I just didn’t know how I could be better. Somehow I needed to change the way I acted and I had to accept my mistakes.

This is where I learned to think of mistakes not as blemishes on an otherwise clean slate, but as indicators that I needed change direction. Think of life as a canvas. At birth there isn’t much there but as time goes on marks are made with paint brushes, pens and pencils. Maybe glue and scrapbook clippings are added and the occasional puncture. At some point in life we take a look at what is on the canvas make the decision to be more intentional about what we apply to that canvas. When we make mistakes we have to practice our brush strokes more to get the desired result. There is no tabula rasa waiting for me, I have to continue painting on the canvas I I was born with.

I’m not a perfect husband, but I actually put in the effort to learn from my mistakes. I won’t be a perfect father, but don’t use that as an excuse not to try. And I’m not the best friend anyone has ever had, but I try to be there for them and expect nothing in return. I will never give up trying to learn how with the help of others.

If I can continue to make progress everyone in 2030 will be happier with me!

Take better care of my body

When I got out of the army I was in the best shape of my life, except for maybe right after airborne school. But I got complacent. I put on the freshman fifteen followed by the sophomore fifteen and so on. I was rocking the Dad bod before it was cool and I wasn’t even a dad yet! 2010 me didn’t think about being in shape to keep up with his kid, or living long enough to see her graduate from college. I think about those things now!

My wife and I met smoking cigarettes which is the funny part about our relationship. I considered quitting in 2013 and talked her into quitting with me. I lasted two weeks and she hasn’t had a cigarette since. It’s been a little over a year since I smoked regularly but not without getting nicotine from alternative sources. I started vaping a year and a half ago and when our daughter was in the NICU all the news about people dying from vaping was everywhere in the news. I switched to nicotine gum for a little while, but went back to vaping using one stressful day as an excuse. I hope to be completely nicotine free by this time next year. I really don’t want any of this stuff to be in my house while my daughter is growing up!

And I haven’t had a drink in over two years now, which has been the biggest contributor to my betterment as a person. People just don’t make good decisions when they drink and they certainly don’t consider the future. I wish that ordering stuff from Amazon and eating a whole pizza were the worst decisions I ever made while drinking, but sadly that’s not the case.

How to change the past and make a better future

I hope that 2020 me is laying the groundwork for a successful future, because I know that 2010 me was not. I can get angry at myself and point out the monumental mistakes I made, or dream about what you have happen to my 2010 investments if they had stayed invested in things McDonalds, Microsoft and Target. Or better yet, I had made those investments in Netflix and bitcoin!

That just isn’t being fair to myself and it ignores the lessons life was trying to teach me. 2020 will be the past eventually and it is up to me to do the right things today so that I don’t look back in 2030 wishing I had done things differently. You got the rest of your life to get it right, don’t waste it on yesterday.

Use this New Year to make progress, and don’t worry if you don’t get it right the first time. Life takes practice just like learning to play the guitar you’ll hit the wrong note or playing football you’ll fumble the ball. If you stop practicing you cannot expect to get any better. Start with one thing and when you get good at it use that success as motivation to move on to the next thing.

Wishing you the best in 2020.

Back to Winning at Dadding

The Basics: How the Economy Works and What is Your Part

This is probably the best summary I have seen on understanding the economy. Knowing how the economy works on the macro will help you make better decisions on the micro by knowing how you fit into the bigger picture. If you haven’t seen the video before check it out and then read on to see how these rules can help you excel in times of economic boom and bust.

Ray Dalio’s 3 Rules of Thumb from How the Economic Machine Works and How you can apply them in your life

Rule One: Don’t Have Debt Rise Faster Than Income

Spending and Debt are the same thing. Spending means what was once your money is now someone else’s money, it’s gone forever. And when you spend the money you do not have, that is future income that is gone forever. Seeing how this can spiral out of control is not difficult. To keep up you will have to increase your income in the future and there is no guarantee that will happen.

Sit down and sketch out a plan determining how hard you want to work today and how much harder you want to work tomorrow to make up for the lost productivity of today and think of debt as lost productivity. To me it makes more sense to work harder today so I can enjoy tomorrow. Achieving that goal comes down to spending.

Prioritize what you spend your money on with three simple categories and be honest with yourself.

This is something I need. Whether you like it or not you have to pay the rent-gas-electric-water-whatever.

This is something I enjoy, a want in other words. If you don’t buy it you won’t die. Try it sometime.

This is unnecessary. It is the mindless, thoughtless, not-even-sure-why-I-bought-it things that we buy. Never spend your money on those things.

Take Away: Take control of your Spending.

Rule Two: Don’t Have Income Rise Faster Than Productivity

This one is more difficult to think about on the personal level, but here’s how I am applying it. Let’s say I land a high paying job, or finally get that promotion and my income suddenly becomes greater than my current standard of living. Assuming I am following rule one I won’t have a problem with lifestyle creep and increase my spending. However,what might happen is that I decide to rest on my laurels. Suddenly feeling like I have arrived might lead me to believe there is nowhere else to go. Hence, I acquire an attitude of thinking I know it all and miss the opportunity to learn new things increasing breadth of knowledge or depth of skills. Over confidence in myself leads me to believe that no one else can do what I do.

Opportunities are missed. I fail to adapt.

Someone hungrier than me comes along with new ideas. Better ideas. Innovation swoops in for the win and disruption happens again. Stay humble, my friend. Learn something new everyday.

Take Away: Don’t become Complacent

Rule Three: Do all that you can to increase your productivity

In economics the rule of productivity is that what you do not produce today cannot be made up tomorrow is difficult to recognize in our personal finances. Think of it this way: If I produce 100 units of something today when I could have produced 200, producing 300 units tomorrow does not make up for lost productivity. It means that I missed the opportunity to produce 500 units.

Inevitably, many of us learn how to increase our productivity because we failed at Rule One. Our productivity rises because we are playing catch-up! Now we have a mountain of debt we’re trying to get out from under. The thought of climbing to new heights does not even sound like an option anymore.

Getting spending under control and taking advantage of every opportunity to grow will put you at an advantage. Since many of us are starting at the cavern beneath the mountain rather than at the base it can seem like an impossible task.

I used to feel that way too and I can assure you it is not. Getting today done right will free up the ability to take advantage of tomorrow’s opportunities. And I mean literally today and tomorrow. Thinking about five, ten, and fifteen years from now will do nothing but discourage you in the beginning. That’s like thinking you can leap to the top of the mountain.

Put one foot in front of the other. Tackle one thing at a time. Every step is one step further from where you started and one step closer to where you want to be.

Take Away: Don’t put off until tomorrow what you can do today!

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