Decisions? Mistakes?

Every meaningful decision you make has risk. Each one benefits you, whether emotionally, spiritually, or educationally. No regrets! Photo by Suna

This post originally appeared on the Hermit Haus Redevelopment website on 2019-12-25.

Author and publisher Michael Hyatt—who apparently has nothing to do with hotels—thought enough of a quote from Catherine Cook to put it on page 99 of his Full Focus Planner, which I have been using for a full quarter now. (It is just the best!) That quote is, “If you’re not making mistakes, then you’re not making decisions.”

While I kind of agree with the sentiment of Cook’s statement, I have a couple of issues with it, including a superfluous “then.”

At the risk of making a semantic argument, you can and do make decisions every day without the risk of making mistakes. Should I wear the dark blue shirt or the black one? Which sides do I want with lunch? Coke or Pepsi? Maybe iced tea.

For most of us, there are no wrong answers to these questions—setting aside the Coke employee whose job was jeopardized when his wife brought him a Pepsi with lunch because she didn’t realize that’s what the fast food place served. Only someone with a very fixed, authoritarian mindset—like a fashionista or a marketing executive—would consider any answer to these questions wrong.

What I like to think Ms. Cook and Mr. Hyatt meant is: you’re either not taking risks or you’re not making important decisions—probably the former. After all, rewards are usual corollary to the risk. Higher credit risks pay higher interest rates. Federally insured savings accounts (usually considered low risk) pay almost nothing.

On the other hand, you don’t want to take unwarranted risks. You’ve heard me and thousands of other investors say we take only about 1% (sorry, Bernie) of the deals that come our way, but we compete very hard for the deals we accept. I try not to take risks that outweigh the potential rewards even though you really can only how big the risk was in hind sight.

The takeaway is this: Weigh your options. Judge the risks against the potential rewards. Make your decision, and only look back to see what you could do better the next time. Ever decision you make—no matter how it turns out—contributes to the person you become. And remember, batters can get into the Hall of Fame hitting only 30% of their times at bat.

Brody Brobro Brodybro

This is the inspiration for the children’s rhyme.

This poem started out with Brody and a “fearsome bug.”

When wrote this doggerel in 2018, I thought it might be a good “book” for a kids’ book. I don’t know an illustrator, though.
So, here it is:

Brody has a pretty face.

His name means, “from a muddy place.”

 

With all his friends, we have a pack,

Brody always has my back.

 

He takes really good care of me.

He tries to protect me from everything

 

Like snakes and sticks and fearsome bugs.

He knocks me down and gives me hugs.

 

When I am away, he misses me.

When I come back, he licks my face and kisses me.

 

He’s always having lots of fun.

He loves to run and run and run.

 

When he gets hot, he likes to swim.

He finds the pond and jumps right in.

 

He likes to go on long, long walks.

He tells me things. It’s like he talks.

 

He always tells me what he’s done.

“I chased the cows, and it was fun.”

Annual Goals, 2020 Edition

A well crafted goal is Specific, Measurable, Attainable, Relevant, and Time-Bound.

This post originally appeared on the Hermit Haus Redevelopment website on 2016-07-00.

It’s been a while since I’ve talked about goal setting, but this is the time of year when we traditionally review what we’ve accomplished and figure out what we want to do next year. So, I thought it appropriate to review goal setting now. Especially since that’s what I’m doing.

Russell has also written on SMART goals, so I’m not going to rehash that topic. Instead, let’s talk about how we actually pick our annual goals.

1. What do you want to do?

My first step is to make a wish list of everything I want to accomplish in the next year—whether it is personal, financial, operational, or spiritual. This is a stream-of-consciousness exercise. I don’t focus on anything except identification of what I want to do. Grammar, spelling, logic, achievability, timing—everything else is irrelevant for this part of the process.

Here are a few of the many, many items from my wish list:

Flip some houses. Make a horse pasture. Renovate the old church as an event center.

Renovate the Gillis house for the Hearts, Homes, and Hands office. Improve our cash flow. Keep all of our businesses profitable.

Spend more time at the ranch. Spend more time with family. Help people.

2. Clarify and combine objectives.

You’ll notice these wish list items are not very specific, and some of them could be grouped together. So, that’s the next step: clarify and combine my goals. For example: “flip some houses,” improving cash flow, and the two renovation goals could be considered parts of the profitability goal. That goal now becomes, “Improve the profitability of the businesses by 10% year-over-year while maintaining a positive cash flow.”

The horse pasture can be combined with spending more time at the ranch and with family. That goal now becomes, “Spend more time with family by working with the horses at the ranch.” Building the horse pasture is an enabling goal for the annual goal. But “more time” is not very specific. Let’s make that “three Saturdays a month” to leave some time for activities other than horsing around.

Finally, everything in the list falls under “helping people.” So, I’m going to call that an underlaying motivation rather than a goal.

Sometimes one task or goal must be completed before another one can start. For example, we have to move the retention pond (big hole) in the foreground before we can put up the fence that needs to go through it. The silage and hay in the distance have to go elsewhere before the horses can be put in this pasture. The rocks can stay where they are.

3. Create a goal hierarchy.

The goal hierarchy helps you understand which of your goals need to be attained in which order and establish their relative importance to you. For example, we have to renovate the old church before we can use it as an event center, and we have to generate rental income from it to improve cash flow and profitability. Also, the businesses have to be making money to enable me to spend more time with my family.

• Spend three Saturdays each month with family at the ranch.
• Build a horse pasture by the end of the fourth quarter.
• Fence the pasture by the end of the second quarter.
• Build stalls by the end of the third quarter.
• Move the hay.
• Move the horses.
• Improve the profitability of the business by 10% year-over-year while maintaining a positive cash flow.
• Generate income from event center rentals by the end of the first quarter.
• Begin renting the conference room by the end of January.
• Renovate the conference room to a rentable standard by end of the first week in January.
• Begin renting the Sanctuary for bigger meetings by the end of the first quarter.
• Renovate the pulpit area by the end of February.
• Complete ceiling demo downstairs by the end of the first week in January.
• Reduce vacancies and leasing expenses by converting all rentals to two-year leases by the end of the year.

By doing this exercise, I reduced nine random wish-list items to two specific annual goals. You should never have more than three to five annual goals. The more goals you have, the less you can focus on achieving any of them. Focus is the key to success.

4. Remove any remaining ambiguity from the list.

You can have some ambiguity in your goal statements so long as you have clear definitions of what the terms mean. For example, “build a horse pasture” could mean a lot of things. But we have specific plans in place for:

Where the fence should go What kinds of fence material should be used Where in the fence gates need to be placed

Where the horse stalls will be located and how they will be made How to get water to the stalls How to light the stalls

Where and how to store feed.

All that’s left is to figure out where the money comes from.

I’ve recently started to use the Free to Focus planner. I find it a lot more intuitive and “focused” than the Covey system. It is one of the things that have me focused on goals right now.

5. Review the timeline to make sure the dates are attainable.

“Attainable” doesn’t mean “easy.” The timeline should cause a little stress. If it doesn’t, you’re probably not pushing yourself hard enough. In business terms, you’re leaving money on the table.

6. Set a schedule to review and revise your goals.

I review my annual goals at least once a week. The priorities shift as the year goes on, and you have to be flexible. For example, a project going seriously over budget can delay other projects and affect the attainment of goals. That doesn’t mean I rewrite my goals weekly, but keeping the goal line in view means I can understand and communicate how projects relate to and affect each other. (Actually, improving this communication is one of my goals for next year.)

I’ve recently started using the Free to Focus planner. That planner requires me to transfer (by hand) my goals from one quarterly planner to the next. That process also gives me an opportunity to clarify and reprioritize my goals. Writing the goals out by hand reinforces them in my mind in a way that typing them into an online planner does not.

In the end, the way you set and track your goals is as individual a process as what your goals actually are. This process works for me. I hope it helps you, too.

Sarita Is Sold and Closed!

There are lots of ways to get free advertising. Doing a great job like Dana Wissink, the Realtor® who handled the transaction for us, is the most reliable way.

My mom always said, “Everything always works out for the best.” Even the flooded pasture I used for the background of this meme.

This post originally appeared on the Hermit Haus Redevelopment website on 2019-12-05 and on the Hearts, Homes, and Hands blog on 2019-12-04.

We have learned a lot from the Sarita project. It feels like almost everything that could have gone wrong did…but that’s not really how it was. We had one major pain in the ass, and that was the buyer’s lender. Even the buyer’s agent said she will never use that lender again. Here is a brief rundown of what we learned.

You never know where you’ll find a deal.

I never expected to find a good deal on a property in my own family, but my brother and his wife just wanted out from under a house they could no longer maintain.

People first.

We ended up making a little money outright for handling the sale and taking over the debt, but most of the profits are going into a fund to help take care of my brother and sister-in-law going forward. As I said, they would have been happy to let us take it all, but that’s not how we roll. They actually objected to taking a promissory note to cover their future care, but we insisted on taking care of them.

You need a local team.

Redevelopment is a team sport. You can’t do it all yourself. You need good contractors, which we didn’t have in the Brazosport area.

Since this house is well outside our area of operations, we decided on the prehab exit strategy. We cleaned up the house and maintained the laws to keep the HOA happy. But we did not go looking for contractors. Instead, we offered the house at a substantial discount to its after repair value (ARV).

We offered the listing to an old Realtor friend, but she had also moved out of the area. (I may have mentioned, I grew up there but left as soon as I could.) While we were trying to find a Realtor, we were approached by an investor who found the house while driving for dollars. We couldn’t find a place where the numbers worked for both of us, but we did list the house with her. She turned out to be a great person to work with, and I hope we can do stuff together in the future.

There is a new type of FHA loan.

FHA now offers a loan—the FHA 203(k) Rehab—for homeowners wanting to renovate, either to make the home more affordable or to participate in a homestead flip. I don’t believe the loan is available for investors since it is an FHA vehicle.

Because FHA allows for up to 100% financing, FHA lenders are notoriously hard to deal with. So, we usually don’t accept offers with FHA financing, but we were intrigued with helping someone obtain a family home for renovation, instead of just turning the project over to another investor.

It’s not closed until it’s closed.

We learned that this type of financing doesn’t make the FHA any easier to deal with. In fact, the lender arbitrarily delayed closing now fewer than five times. One of these times caused me to miss a trip to Hilton Head we had planned for more than a year. The next one, move closing out of that trip window and came the day after going on the trip became impossible for me to arrange.

They also refused to authorize closing until seconds before it was schedule for the penultimate time, knowing I had to travel four hours to close. We thanked them very much, and I drove down the next day anyway.

Okay. We’ve already talked about most of that, but it never hurts to go over lessons learned. And as of now, the deal is done. The money is in the bank. We have helped a homeowner get a (soon-to-be very) nice home. We have helped and can continue to help my brother’s family. And we have additional resources to start hiring staff to help others stay in their homes.

Up- or Down-: -Sizing, That Is

A Del Webb survey found a smaller percentage of people approaching retirement plan to downsize than previous surveys.

This post originally appeared on the Hermit Haus Redevelopment website on 2019-12-03

And Home

Sings me of sweet things

My life there has it's own wings

To fly over the mountains

Though I'm standing still

— Karla Bonoff

Will your retirement home be smaller or larger than your current home?

The last of my generation—technically (I’m a Baby Boomer, although I often feel closer to Generation X)—is approaching that magical time, retirement. It is a goal many of us have been planning and working a long time to achieve. Others of us never thought we would or planned to “work until I die.” I was in that last camp, so I found more work to do once I “retired.”

One constant throughout our lives, however, is the need for housing. Babies, teenagers, young adults, middle-agers, retirees, and elders all need a place to live. A traditional strategy of the nuclear family has been to downsize their homes at retirement, but a growing number of retirees are upsizing now instead. Del Webb of Sun City (which my naughty fingers always want to spell with two I’s) recently conducted a survey of people in their 50s and 60s who plan to move again sometime. Bucking recent trends, 43% said they plan to move into a house of similar size to their current one while 22% said they planned to upsize.

Before I go on, a couple of caveats. A single survey should never be used as a market indicator. I also suspect that Del Webb’s choice of a sample population may have significantly influenced their results. Del Webb markets to very affluent retirees. If their sample was exclusively from their target audience, it would be like using the population of Clute, Texas to predict the results of the next election cycle. There probably isn’t enough diversity to represent the general population.

That said, let’s look at some reasons why people might choose to up- or down-size.

Downsizing

A good view can be an important consideration in selecting a retirement home, regardless of up- or down-sizing. Photo by Suna

Using the equity in your existing home

For many people, the equity accumulated in their homes is their retirement plan. That’s why home equity loans used for anything other than home improvement is a bad debt. When people look to downsize in retirement, they often use their home equity to pay cash for a smaller home and the rest to maintain their lifestyle in retirement.

Maintenance

Smaller homes are cheaper and easier to maintain than bigger ones. The costs of everything from painting to flooring to a new roof are proportional to the number of square feet in the home. And there is simply less to sweep, dust, and mop, giving you more time to enjoy your retirement—unless you look forward to those chores. Then maybe you should upsize.

Upsizing

Moving to a less expensive area

If you’re moving from NYC to Florida, LA to Houston, or Austin to Cameron, you can buy more house for the same price in your new city. While tax laws don’t currently encourage or discourage this behavior, having the ability to buy a bigger house can be its own excuse.

Room for visitors

Many retirees hope their children and friends will spend time with them. Some even move to resort areas to encourage visits. If so, you’ll need a place to put those folks, and a bigger home can be just the ticket.

I wish everyone could be as independent and active as my dad. In this picture he is experimenting with a new grass varietal for his cattle. He is 88 and undergoing treatment for the cancer that would eventually claim him.

Parents

Many boomers and Gen-X’ers have parents to take care of. This move toward a more traditional extended family is awesome. My mom and dad lived in their own house until they died. They refused any offer of cohabitation until near the end. But not all of our parents have the means or the health to maintain their independence so long. I firmly believe we should help our elders stay at home or move in with us—whatever they choose.

Parents

Helping elders stay independent at home is why Sue Ann, Kathleen, and I co-founded Hearts, Homes, and Hands to provide non-medical personal assistance. Suna and I will eventually be clients as well as principals of that company. Our goal is to provide the services and care our clients want and to uphold the inherent worth and dignity of all our elders.

Thankful Thursday

If you have any interest at all in instrumental classical music, this album needs to be in your rotation. Photo from Amazon

Warren Zevon recorded The Wind while in the process of dying. The music is understandably contemplative and melancholy, and still uplifting. Photo from Amazon

Thank you for the music, the songs I’m singing

Thanks for all the joy they’re bringing

Who can live without it, I ask in all honesty

What would life be?

— Benny Andersson, Björn Ulvaeus

I was really busy earlier this week, so instead of Grateful Monday, here is Thankful Thursday.

I was listening to a Hidden Brain podcast on how we change our beliefs Tuesday. In it a woman was on her way to an appointment where she would be diagnosed with ALS. She was listening to Warren Zevon’s “Keep Me in Your Heart,” which is from an album he recorded while dying. It got me thinking about how we build soundtracks for our lives.

Music is a universal language. Many of us like songs in languages we don’t speak. Sarah Chang’s performance of Chopin’s “Nocturne #20” proved (to me, anyway) that a performance doesn’t have to have words to bring us to tears. Then there’s the whole genre of rock, where you’re hard pressed to understand the words, even with a libretto.

Unfortunately, most of us are not open to new forms of musical expression after our mid-twenties.

Even so, I’m grateful for music.

• For the opportunities it gave me to travel and grow and get over stage fright
• For the learning opportunities of life on the road
• For the ways it brings people together
• For its ability to communicate complex ideas and build empathy or movements

Aging: Denial, Acceptance, and Heroism

Dad never did let that rockin’ chair get him. Here he is stretching fence at 90.

This post originally appeared on the Hearts, Homes, and Hands blog on 2019-11-27.

So buy him a drink and lend him an ear

He's nobody's fool and the only one here

Who remembers the smell of the black powder smoke

And the stand in the street at the turn of a joke

— Guy Clark

There is a perception that getting older means we are somehow less than we were when we were younger. The memories and stories of our elders get discounted as ramblings, the lessons they could teach lost to many younger listeners.

While we eventually reach the point where we need help, a long life is an accomplishment, something to be proud of. Perhaps that’s why people go to great lengths to deny their true age. For example, Suna’s father cared for an elder woman who claimed to be 104. When she died, it came out that she was really 108, but she felt it was important to she maintain the fiction of being younger than she was.

And my dentist is the same age I am, almost to the day. But I sometimes have trouble taking him seriously. His hair is the color of shoe polish, and he has obviously had “work done” on his face—probably a combination of face lifts and Botox®. According to MedicalNewsToday, “Botox is a neurotoxin … used to reduce fine lines and wrinkles by paralyzing the underlying muscles.” Why anyone would poison themselves in a failed attempt to look younger is a mystery to me. And it undermines his credibility as a health advisor. But he is an excellent oral surgeon, and I keep reminding myself of that fact.

When we get older, we get older. I’m eternally grateful to my parents for instilling this sense of realism in me. I am the youngest of six. My mom was 36 when I was born. So, by the time I was in high school, they were looking seriously at retirement. Our kitchen table was lined with forged trivets conveying such messages as, “Don’t regret growing old. It is a privilege denied to many.”

Admittedly, I thought this aging advice was embarrassing at seventeen. But I still remember it in my sixties. Maybe that’s why I feel accepting of my own aging. Thanks, Mom and Dad.

Even without denying our aging, we can still take steps to prolong our health and independence. My dad worked hard his whole life. He always advised me, “Don’t let that rockin’ chair get you.” The Spring before he died at 92, he planted 40+ acres of corn. His last hospitalization came at harvest, and he was more concerned about the harvest and yield than his own treatment. He knew he was dying and accepted it. So, he focused on what mattered to him.

This grandma fought off a home invader by herself! Not all of us have the ability or the confidence to do that. Photo by ABC News

This morning, I learned of an inspirational woman on the news. At 82, Willie Murphy beat a home invader badly enough to put him in the hospital. When the cops showed up, they took selfies with her. She said, “He picked the wrong house to break into.” Amen, sister! “I think he was happy when he went in the ambulance.”

Not all of us are body builders, but we can all do something. My neighbor across the road walked three miles a day—every day—well into her eighties. When she succumbed to cancer, she went down fighting, but she went down with grace.

All of us face challenges every day. These basically fall into two categories: those that are within our sphere of control and those that are not. All I can hope is that I continue to work on thing things I can change and accept those I can’t. I hope I’m never too proud to accept help when I need it.

If you find you need help with some of the things you used to be able to do, Hearts, Homes, and Hands is here to provide that help.