Four Skills

In the course of a life, one is constantly presented with the opportunity to learn things. Sometimes one is required to learn them for school or for work and sometimes we are drawn to them because of interest or passion. We often ignore the optional opportunities because of time constraints or laziness. But sometimes we take up a learning opportunity and pursue it until we reach a level of competence. For those with talent (or more likely extreme perseverance), a level of mastery may be achieved. Though far from mastery level, these are four useful skills I have acquired and which I continue to try and improve after decades of application. I offer these not as a boast nor to suggest that you pursue these but rather for you to consider what skills you are practicing and be alert to what you might want to take up next. 

I am not including in this list the skills that are essential and that virtually everyone learns. These are so universal as to be taken for granted. (obviously, I understand that they cannot nor should not be taken for granted.) These include, reading, writing, basic math, driving, dressing oneself, etc. I am speaking of optional skills that while anyone might learn them not everyone does. Everyone, I suspect has a list that is unique to them. Here are mine.

Accounting/Double Entry Bookkeeping

Easily the most useful skill I learned for my work life and for understanding and managing my personal finances. As an English major, I assiduously avoided classes that involved business or math. But when I found myself in my first nonprofit job there was a vacuum in the finance function of the organization. I made a deal with the executive director that if she would buy me a Macintosh to work on, I’d get the organization’s books squared away. To be clear, my motivation was getting a Mac to use at work (I already had one at home) not to learn double-entry accounting.

I didn’t know the first thing about accounting. With the help of a college textbook, the organization’s external auditor who was generous with his time, and a lot of trial and error, I taught myself accounting. It opened incredible pathways and opportunities in the course of my career. I used the same professional level accounting software that I used at work to manage my personal finances as well and thus gained a level of understanding that allowed me to make better decisions about investing and our household finances. To this day, I track all our household income and spending to the penny as if it were a small business, which it pretty much is. This level of control is not for everyone, but I can’t imagine not doing it after all these years.

More importantly, I have come to appreciate double-entry accounting as one of the most beautiful and perfect systems devised by human beings. It is also the closest thing we have to a near universal system adopted around the world (but for the U.S. the Metric System could be that). Virtually, every business in the world that has an accounting system double-entry bookkeeping.

Bread Baking

Ever since that first loaf, I baked to write about for Freshman English in 1980, I have been an avid baker. I conservatively estimate that I have made more than 2,500 loaves of challah, hundreds of bagels, and countless loaves of wheat, rye, and kamut, breads. Last week, I obtained a portion of sourdough starter from my dad, I have begun a sourdough journey with four loaves having already come to fruition. Two of them were good and two had disappointing oven spring. They were still quite edible notwithstanding.  Aside from the few who eschew gluten for health or theological reasons, people love bread. Friends and family are always delighted to receive a loaf of bread. It is an easy way to make people happy and the process of turning flour, water, and salt into bread is rather magical. In most cases any bread you bake at home will be better than anything you can buy at a grocery store. Far less expensive as well. It is a rare week that I don’t bake at least one loaf.

Knife Sharpening

I love to cook and nothing makes cooking more enjoyable than a good sharp knife. It is hands down the most important tool in the kitchen.  If your knife is sharp, you work faster and more effortlessly. You will cry less over your onions. A sharp knife is safer to use since it is less likely to slip.

The best way to sharpen knives is with a set of whetstones but finding the process somewhat intimidating, I avoided them for years. I tried every other sort of sharpening system including manual handheld sharpeners, electric sharpeners and a system where the blade was held in a fixed position and the sharpening stone was pushed against the blade. None of these systems proved satisfactory. I wanted a blade so sharp I could shave my arm hair with it.

Around 10 years ago, I broke down and bought my first set of Japanese whetstones. I watched countless YouTube videos on sharpening, and I made many a knife worse before I started making them better. But after a few hours over many months, I got the hang of it. Now I sharpen my knives every six months or so and in between I hone them on a ceramic hone that brings them back to razor sharpness with a few strokes. My favorite knife is a fussy santoku with a carbon steel blade that will rust if not washed and dried immediately after use. But it is fast to sharpen, holds and edge, and is perfect for my hand. Let me tell you it glides through food. Keep your fingers away from the blade! Why, it’s sharp enough to shave the hair from your arm! But don’t. Safety first!

American Sign Language 

We found out our daughter was deaf when she was 10 months old. A week later, we left on a family vacation, a road trip to Montreal, with a brand-new copy of The Joy of Signing open in the front seat. That week my wife, my daughter and I learned our first signs and a few weeks later my daughter made her first sign. It was a request: “Milk.”

If the only thing learning sign language allowed me to do was to communicate with my kids, dayenu. It would have been enough. But it did so much more. Learning ASL opened me to a world that a scarcely knew existed. The Deaf world is a vibrant and robust subculture.  It also led me to an involvement in Jewish life that I had previously been a stranger to. (That is a story for another day.)

Some of my most fulfilling experiences were the twelve Birthright Israel trips where I staffed the ASL trip. The Deaf students and Israelis that I had the opportunity to get to know over those 10-12 day trips changed the way I see the world. I was on one such trip when Apple announced that its new system software would allow iPhone users to make video calls “FaceTime” allowing Deaf people to have synchronous conversations over the phone as hearing people had had for more than 100 years. I don’t know that I have ever seen anyone so excited about a new technology as those students were.  

My ASL skills have stalled in recent years. With my kids far away and no opportunity to sign every day, my level of competency, always more conversant than fluent, has stagnated somewhat. Still, I can mostly keep up my end if my conversation partner is patient and slows down for me. It is the closest I come to a second language.

Check out the new Deaf President Now! movie on Apple TV+ to see how Deaf people took control of their destiny at Gallaudet University the year before my daughter was born.

Each of these skills took between 10 and 20 years to attain a level of competency. In none of them am I even close to among the best. In fact, the most I would claim to be at any of these is adequate. Still I am always on the lookout for the next learning opportunity that might present itself. I might just have enough time to get pretty good at one more thing.

The world’s a narrow bridge; fear nothing.

Whatchya Readin’?

Summer doesn’t officially begin for another week or so but with the humidity rising in the D.C. area after an unusually cool May, I feel that it is already here. If you are headed to the beach or the lake house, you may have a stack of books (or a loaded iPad) to take with you but perhaps you are looking to fill out your list with some additional material. Here is what I’ve been reading, listening to, or watching that I can recommend.

Reading

I am just finishing up This is Strategy by Seth Godin. Though I found this shelved with the business books in a bookstore near Fort Worth, Texas, the short chapters offer insight not only into the minds of your potential customers but also into your own thinking. Thought provoking for those trying to understand their business’s, nonprofit’s, or their own personal life’s mission. I found it easy to read and it gave me a lot to consider.

The Wizard of the Kremlin by Giuliano Da Empoli is a beautiful novel about an ugly topic, Vladamir Putin’s rise to power and how he was propelled by the human tolerance for or even desire to live under authoritarianism. Lent to me by a friend who insisted that I read it, it sat on my shelf for months. The topic just hit too close to home. Finally, I grabbed it as we were leaving on a trip. It is one of the best novels, I’ve read in a long time. I felt that I gained a deeper understanding of why dictators can take hold, how we empower them, where true freedom lies, and why it is so hard to preserve. The version I read was translated from French. I can’t read it in the original but perhaps you can.

Same as Ever, by Morgan Housel. In world in which change scrolls across our eyeballs like a stock ticker, Housel uses a series of short vignettes to illustrate that the most important things like values, relationships, and even tastes can change very slowly or not at all. For example, search the web for a list of the most popular candy bars in the U.S. and the results are identical to the most popular candy bars when I was kid. Milky Way, Snickers, Hershey Bars. There are lots of high quality confections that no doubt taste way better than those but year after year the old standards top the charts. I finished the book wondering if anything ever really changes at all.

Listening

I listen to podcasts mostly when I am walking or driving but that is a lot of the time. Here the the podcasts that come back to again and again.

Money for Couples – Remit Sethi Each week Sethi interviews a couple about their money problems. Sometimes the couple is overspending and struggling to make ends meet. Sometimes, they are millionaires who can’t bring themselves to take a vacation. The podcast drills down into the psychology of money and the stories we tell ourselves about it. It helps me understand my own attitudes and pathologies. I never miss an episode.

The Rest is History Dominic Sandbrook and Tom Holland This is a lively deep-dive into human history spanning thousands of years. I just finished listening to a three-part exploration of the first European emperor, Charlemagne (circa 800 CE). Called the father of Europe, Charlemagne is key to understanding everything European from Napoleon to the Third Reich. The European Union of today owes a debt to Charlemagne. And that is just one of the hundreds of fascinating episodes and series this podcast has to offer. Dan Snow’s History Hit is another good history podcast. He recently had a fascinating series on the end of the (Western) Roman Empire.

For Heaven’s Sake is produced by the Shalom Hartman Institute in Jerusalem. Each episode features Institute president Donielle Hartman and scholar and writer Yossi Klein-Halevi as they discuss Israeli politics and the war in Gaza. I avoid most mainstream media and this is my primary source for understanding what is happening in Israeli and the Middle East. Having had a good fortune to have spent a year as a Hartman Fellow while I was working at Hillel, listening to Donielle and Yossi is to learn again with two beloved teachers. They are often critical of Israel and its government and often disagree with each other but I know it comes from place of deep love for Israel and each other. I trust them completely.

Watching

I don’t subscribe to any streaming services except Apple TV+ (of course) as part of the Apple One Premier Bundle. I get the package mostly for Apple Music, and the 2TB of iCloud storage and backup space. I don’t know if I’d pay for the Apple TV+ alone but at $40 per month the bundle is a reasonable purchase since I share it with five other family members. Having said that, there is not much I watch but here are two shows I think are fantastic and one that I found amusing.

Severance This is the best show currently being produced and perhaps the best since Breaking Bad. In case somehow you haven’t heard of it, the premise is that an evil company called Lumon has created a chip that they can implant in the brains of their employees that spatially separates their memories and their consciousness. There is one consciousness for work and one for outside of work. Neither consciousness has access to the memories of the other. Imagine two separate people sharing the same body. The show explores the meaning of identity and consciousness and the role those play in being human. There is also mystery, dark humor, and a compelling story. The characters seem very real and quite preposterous somehow at the same time. Producer Ben Stiller knocked this out of the park. There are two seasons so far. I watched the first season all the way through 5 times and the second season 3 times so far.

Silo Ten thousand people live in an underground Silo in the not too distant future and can’t leave because the air outside is said to be poisonous. There are secrets and a mysterious meritocracy that maintains order. Those who dare to ask questions can be arrested or even sent outside to their death. Incredible production values. The set is completely believable. The acting is fantastic. There are two seasons so far each of which I have watched just once.

Your Friend’s and Neighbors This dark comedy set in a wealthy suburb in Westchester, N.Y. stars Jon Hamm (Madmen) who plays a recently divorced financial high roller who gets fired for having a relationship with someone below him on the org chart even though the relationship was consensual and she filed no complaint. Out of resentment and perhaps boredom he turns to robbing his wealthy friends and neighbors of their jewelry, watches, artwork, and cash. Hilarity ensues.

There is some thought-provoking commentary on class, friendship, and the pursuit of wealth for its own sake, but mostly I just found this to be good fun with a few laugh out loud moments. As an added plus, the actor who plays Mr. Drummond in Severance Season Two makes an appearance as an evil art collector. Jon Hamm is a droll and hilarious actor. In this series he has upgraded his signature Old Fashioned cocktails in Madmen to The Macallan 25 Year-Old Single Malt Scotch as his drink of choice (neat, of course). At $2,500 a bottle, it tells you all you need to know about “Coop” the character he plays.

Oh, I just thought of a fourth one. Made for the BBC in 2005 and picked up by Apple TV+, Long Way Round follows actor Euen McGreggor (Obi-Wan Kenobi) and his buddy Charley as they ride motorcycles over a period of 100 odd days around the world starting in London and heading east through, Europe, Kazakhstan, Mongolian and Russia. They fly to Alaska and continue overland to New York City before arriving back in England where they ride back to their starting point. It is an incredible adventure and makes one appreciate a trip to the market on a paved road in a car with AC. I like Euen McGreggor. I love motorcycles and I enjoy seeing people be devoured by mosquitos from the comfort of my screened porch. This series pressed all the buttons.

My summer travel plans are decidedly less ambitious. No ride through Mongolian desert. No dicey border crossings. Just an action-packed weekend in Cincinnati to celebrate my mom’s birthday with the family and then a week in the Adirondacks with a stack of books, podcasts and a maybe a movie or two. If you’ve got any suggestions for reading or watching to ramp up the thrill level, please do drop a comment below.

The world’s a narrow bridge; fear nothing.

My Biggest Money Blunders and How You Can Avoid Them

Note: I am not a financial advisor. I have not a single financial credential to my name. I am neither a CFP nor a CPA. My degrees are in English literature and Jewish Studies. I know nothing about your financial situation and even if I did, I am in no position to tell you what you should do with your money or your life. The following is for entertainment purposes only. You and only you should do you (perhaps with the help of a financial advisor whom you do NOT pay a percentage of your assets under management.

Like many I grew up knowing little to nothing about how to manage money or invest. My parents showed me the very basics. I had a savings account as a teenager (the balance was recorded in a little book that was updated when you when to the bank). I was taught that credit card debt was a most grievous sin and that you should spend less than you earn and that was about it. My parents had money trauma from the Great Depression burned into their DNA from their parents who had lived through it. The only thing they “invested” in were FDIC insured bank accounts and Certificates of Deposit. I learned through trial and often, as you will see, through error.

I got a checking account when I went to college and taught myself how to reconcile it from the directions on the back of the statement. I never gave investing a moment’s thought until at the age of 26 I had the opportunity to begin making contributions to my organization’s 403(b) retirement account. A rep from the firm came in and gave me and my co-workers a presentation on the various investment options offered and noted that she had all her money in the “High Growth Fund.” High growth sounded good to me, so that is what I did with the $20 per paycheck that came out of my salary. Later the organization also made a contribution on my behalf.

Thus began my little hobby of trying to grow a nest egg for a retirement date that seemed very, very far away. Early on I read a few books, like a Wall Street Journal primer on personal finance and The Only Investment Guide You’ll Ever Need, by Andrew Tobias and I tried a bunch of stuff some of which worked and much which didn’t. Here is a list of four worst money decisions I made and one more that while bad on paper, I am still glad I did. So (as they say on the YouTube vids) let’s get into it!

1. Buying Individual Stocks

Early on in my investment journey I thought myself a genius who could pick winning stocks. I tried many methodologies: value investing (buying companies the stock price of which is low compared to its earnings), growth investing (buying companies that seem to be growing rapidly), and the “walk around the mall and see where the teens are shopping” strategy. These were all abject failures. Most of these stocks I later sold at break even or a loss. Here are some of the stocks I owed at one point or another: Alcoa Aluminum, IBM, American Airlines, Lands’ End (before it was bought by Sears) and lots of others. Fortunately, I was protected from my abysmal instincts by the fact that I couldn’t invest in individual stocks in my 403(b) plans. I was restricted to my modest brokerage account and my Roth IRA.

Eventually, I learned that I had no talent for picking individual stocks and that I would never have access to the kind of information that large money managers have which give them a leg up. I realized that I would be better off just investing in mutual funds and leave the investing to those smarter than I. When I came to that conclusion, I sold all my individual stocks. Except one. I kept the one not because I expected it to do anything. The company was in shambles and looked like it might go out of business. The founder had been brought back in a last-ditch effort to save the company, but no one gave him great odds. I kept the stock because owning it was part of my identity. Perhaps the worst reason for owning a stock there is.

2. Using Actively Managed Mutual Funds

As I said, I finally realized that I should leave the investing decisions to those smarter than me and I began investing in mutual funds. Mutual funds are big pools of money and investors that buy lots of different things. Each fund manager has an idea or a philosophy that guides their decisions and if he or she is right, the individual investors make money. These are called actively managed funds. Well, it turns out I was wrong. Not about my conclusion that I was a horrible stock picker; I was quite right about that. I was wrong in thinking there were those who were better than I. It turns out over the long term (ten years or more) virtually no actively managed funds beat the market.

John Bogle looks at this in depth in his Little Book of Common Sense Investing. This book is one of the best books on investing and perhaps the only book on investing you ever need (sorry Mr. Tobias) but if you don’t have the time or patience to read even one, here is the take away: No actively managed fund will do better than the market as a whole in the long run so just buy the market as a whole. Enter passive funds. Passive funds surrender the decision making to an algorithm that simply replicates an existing index like the S&P 500. In other words, if you invest in an S&P 500 Index fund, you returns will replicate the performance of the S&P 500 year in and year out. Does that mean you will make money every year? No. It does mean you will match the performance of the market over time and in most lifetimes of investing that ‘average’ return will be sufficient to meet your goals assuming that you are saving and investing enough. And you will beat almost every kind of investment there is from bonds, to gold, to real estate. Eventually, I figured out average was good enough for me and I got out of active funds and into low-cost passive or index funds where I have been ever since. Low cost means that the company who manages the fund takes a very tiny amount for their work of managing the fund. For example, some of my funds charge just .06%. Compare this to many actively managed funds that can charge 1% or more. 1% doesn’t sound like a lot but over time paying 1% in fees versus going in your pocket can be tens or hundreds of thousands of dollars when you take compounding into account.

3. Thinking It is Always Better to Buy Than to Rent

In 1988, believing that we were “throwing money down the drain by renting” my wife and I bought a one-bedroom condo (really a coop). We bought it knowing that we were planning to have children soon. The price was too good to be true (We later learned why. Coops were very hard to finance and therefore to sell) and we grabbed it thinking we’d sell it for a tidy profit in a year or two and move up to a house. Two years later with one child and another on the way and a coop we couldn’t sell, we bought a house and rented out the coop. Being a landlord was a huge pain and went on for years until we finally sold the thing at a loss to a nonprofit housing corporation. Renting can often make more sense than buying unless you are pretty sure you are going to stay put for seven to ten years. We’ve been in our current house 25 years and even now after considering the interest we paid on the mortgage, the cost of maintenance, and the opportunity cost (of investing) I am not sure it was a good decision from a purely financial perspective.

4. Jumping In and Out of Bond Funds and Chasing Yield

For most of my working life, I invested only in equity funds, that is active or index funds which bought stocks rather than fixed income investments like bonds. But as I got into my 50s it seemed prudent to add some bonds into the mix. At the beginning I bought an index bond fund without really understanding how they work. What didn’t realize was that as interest rates rise the value of bond funds fall and vice versa. As interest rates rose in the mid-2010s, I saw the price of my bond fund fall and was rattled I was buying bonds to avoid volatility! What I didn’t understand was that though the price of the fund was falling it was because it was paying larger and larger dividends.

So, I sold the bond fund and built a CD ladder instead. Of course, as soon as I did that interest rates reversed and each time a CD rolled over it was generating less interest than before. Finally, during Covid when rates sank to near zero, I was getting close to nothing and looking longingly at the bond fund which had soared and was still paying more than 3% annually. Finally, I understood the pros and cons of bonds fund. As my CDs matured I bought back into the index bond fund and am staying put! It was an expensive lesson. As long as you are buying and holding, an indexed bond fund will match the return of its index and do as well as individual bonds over time with a lot less effort. If you don’t need to sell it anytime soon, the short-term price fluctuations shouldn’t worry you.

5. Paying Off My Mortgage Faster Than I Had To

My last mistake wasn’t exactly a mistake. That is I knew while I was doing it that it didn’t make financial sense and I did it anyway. The spreadsheet said no. My brain said no. But my instincts told me to do it anyway. I paid off our home faster than I had to.

We bought our current home in 1999. At the time, I had quit my well-paid full-time job to go to graduate school. I was working about 3/5 time making a fraction of what I had been making at the trade association. My wife was also working part-time as she had been since the kids were born. We could barely afford to make the payments on the house. But a year later I returned to full-time employment and as interest rates continued to fall, we refinanced our mortgage not once but twice. After the second time our interest rate was around 4.5 percent. It was a decent rate and after deducting the interest from my taxes, the effective rate was probably in the threes or even twos. My investments were generally returning way more than that so what I did made no sense. I paid off my 30-year mortgage in less than 15 years.

We made the last payment on our Mortgage sometime in 2013 and it was accompanied by an incredible sense of freedom. The next year, I quit my job (again!) and took another paying a fraction of what I had been making. This time there was no financial stress. On paper it had made more sense to keep paying the scheduled payment and invest the difference, but the sense of freedom after making the last payment was worth whatever it cost me. I am in no way saying this is the right move for everyone, but I have no regrets. We’d still be paying that original 30 year note today if we hadn’t accelerated the payments. Instead we’ve been mortgage free for 12 years.

In spite of these missteps, we came out alright. I retired (mostly) at 58 and my wife two years later. I guess we did more things right than wrong. Here are a few mistakes we didn’t make.

• We never borrowed except for a house and our first few cars (those were low interest factory incentive loans we paid off quickly). We never had any credit card or any other consumer debt.

• We never paid someone a percent of our assets to manage our money.

• We always lived well below our means saving at least 20 percent of our income (in later years up to 50 percent) and maxing out our retirement accounts every year that we could.

• We avoided “lifestyle creep” and live today pretty much the way we did when we were young and broke and yet I can’t think of anything that I want that I can’t afford. (Lack of imagination?). Small luxuries are everything. For many years, travel meant sleeping in a tent. Today we sleep in our minivan!

Still, lots of people do “all the right things” and still find themselves scraping by. Credit must be given to a large amount of luck as well. For example, that one stock I held on to when I sold everything else and moved into index funds, as you’ve probably already guessed, was Apple. I bought a handful of shares shortly after Steve Jobs returned to the company as it teetered on the brink of disaster. I reinvested the dividends and even added to my position a few times. That little gambit resulted in the highest return of anything I invested in over the last 38 years -- far out pacing the S&P 500.

Stupid. Irrational. Dumb. Luck.

The world’s a narrow bridge; fear nothing.