Roundup: Temporary "Retirement," Olympic Disappointments, Money Streams, Homeschooling, China, Financial Advisors, Some Links & Riffs & More | #273
August, 17th, 2024: Greetings from Boulder! We are headed back to Austin this weekend and on to Connecticut for a bit. It’s been so nice to hang out in Colorado. I fully understand why people love living here now (at least in the summers!). Today’s issue is a bit of a link drop, something I like to do every once in a while. Enjoy!
Writing Retreat? A couple of friends have suggested I host something like a writing retreat. I am considering doing a prototype in Austin in October of this year. If you are interested or might be interested in something like this in the future (in various places around the world), submit your interest here.
#1 Temporary Retirement For Taking Care of Kids?
I stumbled upon this post from Ashley Colby this week:
Today my husband ended an 8 year mini retirement from full time work he took through the majority of his 30s. I ended mine last year with a remote full time job. We spent the better part of this last decade both home with our kids, and we planned this intentionally.
Having both parents take a temporary break during the “prime” earning years is certainly against the grain, so it caught my eye. But she referenced an essay she wrote two years earlier that shared more about their decision. She was inspired by her experience being a nanny for rich families in Chicago:
Before we were married, I nannied for a lot of wealthy people in Chicago, and they literally left the house at 6 a.m. and got back at 7 p.m. Kids were asleep when they left and getting ready for sleep when they got home. They often had work events on the weekends, too.
She and her husband asked themselves, “What if there could be a new model for retirement?”
We imagined a mini-retirement for a period in our life course where we want to be rich in time, and the money can be just enough. Maybe others would like to dedicate a period to caring for young children or a sick parent. Or to spend time in pursuit of a creative goal that is not paid. Maybe you want to build a home with your hands, or go on a sabbatical to write a novel.
And what they ended up doing:
"So this is what we’ve done. We worked and saved before having children, enough that we were able to buy our land and build a home outright. Being debt free with regard to a mortgage affords financial freedom because the monthly cost of living plummets.
We racked up graduate degrees that would open the door for remote work, and after our eldest daughter was born we settled into a work life wherein we both work very part time, live very frugally, and are around for these most essential years for our girls. It’s a trade off. We are constrained financially. But we are rich in time and relationships.
It’s trite to say, but does anyone look back at life and say, “I wish I worked more?”
What is the goal of life? Cultural messaging has tricked many of us into thinking it is wealth and status, or career advancement. For us, it is the project of our marriage, our family, friends, and the good we can do in the world?
It’s great to have models like this. Right now Angie and I are trying to split the middle between both working LTFT (less-than-full-time) and also being active caretakers of our daughter. It’s challenging but it’s been worth it. I’ve been surprised at how much I’ve enjoyed the parenting role. I think a lot of my surprise is connected to how I had always internalized the idea that adulthood is centered around work (something I’m exploring in my new book).
But it turns out if you have time and space to lean into “parent mode” a lot of the surface-level annoyances just aren’t that frustrating to deal with.
The full essay is worth reading: check it out.
#2 Olympian? Get A Real Job!
The most ambitious thing you can do is pursue something you care about. This often means that the people around you will shift from silent supporters to active detractors.
Like Lilian Zhang.
Here’s how she talks about table tennis:
“I play because it does make me happy, because it is one of the greatest passions in my life," she says. “I didn’t want to look back 30, 40 years from now and regret not taking that chance."
But this is her mother:
“We always try to convince her to stop playing," says her mother, Linda Liu. “We just want her to have a normal job."
“If she played at a high level, it would help her get into a good school," says Liu, her mother.
She’s 28 now and for more than 12 years, her mother has been trying to get her to quit.
At age 16, she competed at the 2012 London Games. Though she lost her first match, her parents declared it a resounding victory. “They’re like, OK, you got the Olympics, you got that on your college apps and now you can focus on studies,’ " Zhang says.
She did quit table tennis after that. But in college “she felt something was missing. She wanted to take a gap year and train for the next Summer Games.”
Her mother was not happy:
“You already went to the London Olympics," Liu said at the time. “That is enough."
“We are traditional Chinese parents," she says. “We always want her to focus on school. I always wanted her to get a job and be a regular girl."
Brutal read.
#3 Chinese Cars & US Manufacturing
It’s fascinating to see how fast China is becoming a strong global player in the car industry. When in Mexico, I saw MG and BYD ads everywhere. This is the BYD Han, a luxury electric car selling for about $30k
For a long time, however, Western brands saw China as a cash machine:
Chinese consumers swarmed into Buick, Volkswagen, BMW and Toyota showrooms nationwide, happy to pay cash for the prestige of owning a brand that wasn’t Chinese.
“China is our forever profit machine,” my colleagues at GM liked to humble-brag a decade ago, back when I ran GM’s Indonesia operations. “We can bank on an easy $2 billion dividend every year.”
Consulting for many companies in the early 2010s, China was a huge profit and growth center for many industrial companies. I suspect that is shifting now. This essay shared some of the dramatic swings in auto:
GM: 2017: 4.1 million; 2024: 1.8 million (f)
Hyundai / Kia: 2016: 1.2 millionl; 2024: 220,000 (f)
Volkswagen: 2017: 4 million; 2024: 2.5 million (f)
At the same time, I’ve been fascinated to see that the Biden administration is the first to actually “reshore” some manufacturing.
In 2010 I was in grad school in a manufacturing program and at that point, we sort of rolled our eyes at anyone who said they would “bring manufacturing back.” It seemed like an empty political slogan.
But at least based on manufacturing construction, it does look like this is changing:
It will be interesting to follow this.
#4 Retirement & The Money Stream:
I enjoyed this post from
on retirement. The whole post is excellent.I enjoyed this reflection on “returning” to work after briefly being retired, feeling like he had nothing to do while all his friends were still returning. But he changed his mind quickly:
What fresh hell was this? I was paid well, ridiculously well, and worked from home, but the work was of such disjointed inconsequence, done amidst rapid turnover and an atmosphere of random disconnection, that it drove me mad. The turning point came when a new director was named for our business unit ... and I could immediately see that he was a complete fool. I couldn’t live like this.
And then stepping out of the “money stream” - this is why I’m wildly grateful to have gone through this in my early 30s. Compared to some people I’ve seen retire in their 60s who struggle immensely with not having a paycheck, I feel much more prepared:
The money, of course, stopped right away. One day we were standing in the money stream, and the next day we were standing on the bank, drawing all our money from a finite pool, a supply we’d try to make last until we died.
We had prepared to step out of the money stream, of course. For the last several years of our working lives, we monitored our spending, the better to understand how much we’d need to live on each year. We figured we could make it, so we stepped out.
It’s one thing to live on a budget in theory, quite another in practice. When you’re standing in the money stream, you might spend too much on dinner, but you say, oh well, there’s another paycheck coming in. Standing on the bank, you know there’s no more coming in. You’ve got your lifetime supply of restaurant money right there, pal, and you better use it wisely.
#5 Homeschooling
write about the decision to homeschool his son. Very interested in following his journey:The decision to take over his education wasn’t easy. My wife and I argued in circles for hours, well into the black night, trying to find another option — something besides public school and the private school we were pulling him out of mid-year. And I begged my wife to let me homeschool him.
I also enjoyed this essay from
on famous intellectuals throughout history and looking at how they grew up. Some of his takeaways:They had time to roam about and relied heavily on self-directed learning
~95 percent.of them
They were heavily tutored 1-on-1: ~70 percent were tutored for more than an hour a day growing up.
Cognitive apprenticeships: ~90 percent did apprentice themselves at some point. ~30 percent did so before turning 14.
#6 Here’s what happens when you give your advisor “only 1%” of your annual returns
It always shocks me how people get tricked into thinking “only 1%” is a small price to pay for a financial advisor.
With average returns of 6-8% over the long term, it adds up. For $10,000 invested over 30 years, giving away ”only 1%” of your assets per year would result in 27% less wealth than you would otherwise have by just leaving it in the S&P 500 and doing nothing:
On top of this, the bizarre truth is that most financial advisors do not have to put the interests of the client first.
I think most people (unless you are very rich or have complex tax needs) should be using fee-only advisors. These providers offer services more as a consultants. Instead of giving someone 1% of ALL of your wealth, every year, you have a consultant on retainer (or just a check-in every couple of years) for much much cheaper.
#7 From Goldman to Small Busuiness Owner
A reflection from
on leaving goldman:The more time I spent at Goldman, the more I felt the reigns of my own life had been taken out of my hands. Even working in a successful and checked-out role, I felt I had almost no personal autonomy.
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Paul, thanks for linking to my retirement piece … it explains where some of these folks have been coming from in my subscriber list! (You and Khe Hy.) Interesting stuff you’ve got here, I’m a subscriber now.
I’m wondering if the comments of those Asian Olympic parents need a Straussian reading. Perhaps it was a kind of humble brag? I’ve seen Filipino parents act exasperated by their high achieving kids. They are clearly proud of them but you won’t see it with words stripped out of context.