25 September 2006

Pre Season

Tomorrow marks the end of my most recent cyber retreat and I managed to take the longest breaks yet from email and (even) opening my computer. I'm tapping on M's machine right now. I thought that I'd share some observations from this period. It's been my longest chosen break from training _and_ work that I can remember.

It's pretty tough to truly do nothing -- I had a fortnight of pretty low output and found myself getting a bit tense with not taking any action. That surprised me but, I suppose, that it shouldn't have been that surprising to discover that I am hooked on action. The three people that know me the best have (in their own ways) told me over the years that I have an action bias and, often, the best action is no action.

I was very interested in that stuff that I wrote about last time so I reviewed the full length director's cut of What The Bleep as well as watching the supplemental interviews. I also got myself a copy of The Quantum World (2nd Edition, By Ford) to read. The last time I read a physics text book was when I was 17. It was a good mental exercise to try to follow along with taus, quarks and neutrinos.

While the film's suggestions (implied to me) about the wisest way to live one's life make complete sense -- we create our own experience in any situation. I didn't feel the same scientific basis for bridging quantum physics into our experience of reality. My experience is the same as the main players in the movie -- my views are very similar -- but -- I didn't see the scientific underpinning (yet) for the step to quantum reality. Still, I was remined of a very good lesson in the form of a question...

How often do we reject a good idea because of our view of the messenger?

Far too often, I think.

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Following my foray into physics textbooks, I needed a bit of a break and pretty much stopped reading for a few days. The next book that I picked up is called The Anatomy of Peace. I suppose that peace is interesting to me right now because I sense that more and more people are thinking that escalating war is inevitable. It certainly is if nearly everyone starts to think it is (creating our reality).

Quite a few famous Asian authors talk about breaking the cycles within our lives and the book shares some ideas about how we can stop feeding the conflicts within ourselves and our own lives. It was a great reminder of a few things within my own life as I've been thinking a lot about the patterns and habits that I've been following with regard to my work & athletics. Many of these patterns have been highly successful but which ones have been holding me back. I'm off on a retreat this coming weekend to gain some ideas on where I hold myself back.

I've also trimmed my Top Ten list -- actually I've made a sub-set. I chose the two things that are most important to me from October 2006 to August 2007. The internet and my site didn't make the cut -- so you'll see me taking a much lower profile. I'm going ahead with... Early November, Colorado Springs, CO -- USAT Long Course Clinic, see the USAT website or email me for details. I have a few more things planned -- Epic Camps and Talks but I will be creating more space for my Top Two as one of my patterns has been extremely high productivity from high scheduling. I'm going to schedule less so that I can achieve a deeper success in my two areas of focus.

What is success? More than 8:20, I've come to realise that the true nature of the game is to see how close I can come to my ultimate potential. I sat down and mapped it out and came up with 8:17 in Penticton.

Why do it again? It is a search for the deep satisfaction that came in 2003 & 2004 from knowing that on-the-day, I had a race that came very close to my personal potential on-the-day.

So that's a point on the Top Two. The other one is M and I've been thinking a lot about her Top Two list -- atleast how it appears to me. In my heart, I know that we have alignment between ourselves. If you read any David Deida then (my view) of our relationship falls into some (but not all) of his concepts. M tends to experience "us" more than meditating on "us" like I do.

I'll be around a bit less over the next few months. I won't be ending anything. Rather, I'll be focusing on a couple of other areas that will enable me to make a deeper contribution when I return.

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05 September 2006

Personal Planning

I had a buddy ask me about my annual planning process. This might be useful.

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For a few days (I need 7-14), I get myself somewhere with no internet hook-up, no telephone.
I sit down and figure out where I spend my time -- each day, each week, each month.
I write down a plan. Key headers...

  • Big Picture (3-4 most important things)
  • Key Likes (3-4 areas that most drive my personal satisfaction)
  • Geography (where I will spend my time — key due to all my travel)
  • Body — key points for my body
  • Mind — key points for mind/knowledge/education
  • Spirit — when and how I will rest (from training, from work, from everything)
  • Places I want to visit
  • Personal Asset Allocation (today, five year, ten year)
  • Next twelve month expense projection
  • Next twelve month income projection
  • Personal Top Ten List — the ten most important things in my life that require focus, effort and time
  • Actions — what actions/habits are most important to me
  • Hazards — what items need to be watched to avoid roadblocks

In the process of doing this review, without distractions, you'll learn a lot about whether your effort is aligned with your goals. As well, you'll learn if your goals are consistent with your main satisfaction drivers.

I build that out annually and review it quarterly. It's been an immensely valuable tool for me.

Lots of folks resist the idea that we create our own reality through thinking about it. I always ask myself “how can I achieve anything without constantly thinking it about it”?

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Boulder Swim Facility

Hi --

If any readers have contacts that would be able to assist with initial capital costings for a 50m swimming facility then please drop me a line. gordo at byrn dot org

We have a draft scheme and need more accurate capital costings to build into an overall feasibility/business plan.

I'll be offline from September 10-27 so replies could be delayed

Cheers,
g

Channeling Success

I had an interesting DVD sent to me last week – it’s called “What the bleep do we know?” I was chilling in my hotel room and quite pleased with myself for being able to get my inbox into single digits and decided to treat myself to a movie.

The film (for me) is about “quantum living”, applying the thoughts of quantum physicists to our own world. It must be seven years now but I was fortunate to spend a week with a quantum physicist on a business trip to CalTech. Some of the things that he said to me on that trip made a lot more sense when interpreted with the aid of the film.

Whenever I listen to physicists explain the quantum world (in terms that I can understand), I’m always intrigued about how close their description mirrors the views of Krishnamurti; Zen; Buddhism and other people/philosophies that are, generally, associated with the spiritual, rather than material world.

I included an HTML link in the first paragraph if you happen to be interested in checking it out. Paul sent me the full boxed set of DVDs so I could review when I am flying around the globe (I logged over 250,000 air miles on BA in the last 20 months – I will be trimming that in 2007).

There are a lot of concepts discussed in the opening DVD. The one that most rang true to me was this:

***Emotions are chemical and electrical responses to stimuli;

***The chemistry is felt in our bodies and the electricity experienced in neurological pathways;

***The pathways most often stimulated in a neural net become hard wired over time;

***Repeated emotional chemical stimulation in our bodies dulls our cellular experience of these emotions. In order to generate the same physiological effects, we need more extreme and more frequent cellular dosing;

Now consider how certain emotions “feel” // also consider how certain people, places, experiences “feel”. Think about your boss, a specific friend, the house you grew up in, anything at all…

In our lives, many of us find similar patterns, responses and emotions repeated time and time again. Probably the two that cause the most damage within us are anger and victimization (the sensation that we are helpless victims).

If we accept that emotions are electrical and chemical stimuli created by our bodies…

If we accept that emotions are only experienced by our bodies…

…then who is responsible for our emotional patterns?

Even emotions triggered by our autonomous nervous system, we can certainly magnify or moderate them through conscious effort.

Further, one of the speakers on the DVD queried, “what is addiction”? If you click through then you can read what Wikipedia has to say on addiction.

Overlaying the Wiki thoughts with current thinking on the source of emotions… I’m left with the DVD’s inference that many of us are chemically addicted to our repeated emotional responses. I don’t know about you but that sure explains a lot of what I see in myself!

This gave me a wry smile because I can clearly see my success in channeling my emotional addiction in the direction I want to experience life – there is no more socially acceptable addiction that personal excellence.

Thinking more closely, I have two areas where I constantly try to redirect my emotional experience and one area where I have a more automatic and subliminal redirection.

Conscious redirections – harmony and optimism

Unconscious redirection – success

How do each of these three words “feel” to you? Within me, I know exactly how they feel to me. I also know that I have a deep and profound attraction to the way those words are experienced in me.

Harmony – feels a bit like exhaustion but more peaceful

Optimism – a pure form of love; a clean happiness

Success – feels like work; working being experienced as an efficient application of my talents towards a series of goals

These feelings are fascinating to me. Why? They explain so much about what I find in my life. They also explain my reaction (and effect) and many folks that I come across.

The first example that I didn’t consciously realize. When I think about M, there are two characteristics that I experience through her that I find lacking in many people around me. Kindness and a lack of anger. These two are essentially – harmony and optimism – the two items that I have spent the last seven years cultivating in myself.

As I run through the people closest to me, about two-thirds of them share a similar association in my head. They may not think of themselves in that light but I experience them through the prism of harmony and kindness.

Many people resist the idea that we create our own reality, that our thoughts have a direct link to our experience. There are advantages that accrue to chronic victimhood in our society, generally, personal satisfaction isn’t one of them.

Reflecting on the people around me, the situations that occur in my life, my flaws, my successes… it is tough for me to avoid the conclusion that I am creating every single experience around me. There are daily example of my experience being more satisfying than folks that are right there beside me.

This conclusion is very empowering for me. The implications:

***People and situations that are actively working against my desired reality need to be quickly and permanently removed from my life.

***Repeated undesirable patterns have their root within me.

***The high quality of my personal life experience is due to a relentless on three emotive elements (harmony; optimism; success) and dulling my emotive response to undesirable emotive elements (lust; lechery; anger; fear).

***Practicing emotional channeling (steering, rather than totally controlling myself) is the most effective way to gain control over my life situation.

***Every moment of every day provides me with a chance to enhance these skills.

Folks that are held captive by their emotional addictions – I feel empathy towards them. While I may seek to educate the world to how I experience it, my ability to change the experience of others is highly limited.

One last favor for me would be to read slowly and think about this phrase…

Gordo Byrn 2007 Ironman Canada Champion

Thanks for that,

g

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02 September 2006

Value & Return

If you are reading this entry then you are part of my extended circle. We might never meet or… we might swap an email or two… or we might meet at a race. Last week in Penticton, I was fortunately to meet quite a few new people. If you did then thanks for coming up and saying "hi". The combined effect of everyone greeting me was really positive.

Some of you probably sensed that I wasn't really missing my Tri Forum -- to be honest, I wasn't missing it at all! I appreciated having the extra ten hours per week of time. Still, chatting with a few folks made me come to realize that it is a great vehicle for us to get to know each other a bit. As well, the value received by everyone (including me) is hundreds of times the effort that I put it. The internet provides massive communications leverage when used appropriately.

So the Tri Forum will return, eventually. We're going to rebrand to something like the gForum and get the rotating yin-yang sign in there somehow. I'm leaving that to my web-guy. How long to get it all running? I'm not really sure but it will be coming back -- I need to wean myself off some alternative boards that run the risk of infecting my mind with chaos and noise! Just like big cities, popular sites often reflect the disfunction apparent in many societies (reflecting the fear and lack of self-love of many participants).

Race week was a hoot and I nearly lost my voice from talking so much on Wednesday. M started laying ground rules on me for my own protection. You see, once I get rolling, I am liable to stand around in the sun for hours offering ideas on topics such as run durability and training with power!

Now that more people know what I "do for a living"… I find myself engaged in conversations about investments, property and finance. When my business and triathlon lives were black boxed from each other, I never really had a whole lot of conversational overlap.

Not surprising but very interesting (to me at least) how conversation is guided by association. I need to keep working at listening better because people tell you quite a bit about themselves as soon as they start talking. Five more years and I hope to be much more accomplished.

M has this gift for making people feel comfortable so she does quite a bit of my listening for me. In our relationship, we delegate roles to the person that does them the best -- in that sense we are quite "traditional" in our marriage. Our skills fall clearly into male/female generalizations and we like it that way.

However, with listening, I see the ability to get a real edge on life. Not so much an edge over the competition, but an edge over myself in being able to "see" what's really happening around me (seeing is the first step towards controlling). For me, listening is linked to observation. When I am hearing others quite well -- I am also able to observe myself clearly. This observational skill leads to good emotive control which greatly increases my influence over the world around me. In a sense, we can control people by listening to them.

After a two year break from the Okanagan, I was amazed at all the development that had taken place. I hope that I get a chance to live through another economic cycle where the Fed cuts rates way low following a stock market crash. It all seems so easy in hindsight. Of course, I need to watch my personal “fear of missing out” that we all share. Envy and Sellers’ Remorse are big drivers.

They have a saying in Hong Kong that when your secretary starts writing cheques for IPOs then it is time to exit the market. What I noticed in Penticton was that _everyone_ was talking about property. If you are new to investing then here are some concepts that you might find useful.

An example:

Let’s say that I own an apartment that rents out at $1,000 per month. We’ll say that there is no mortgage against the property and my maintenance costs are $2,000 per annum. So I net $10,000 per annum from the property. Further let’s say that I paid $100,000 for the place, so my yield is 10% per annum. In an environment of 4-5% deposit rates that is a nice return. You are getting a great income return on your capital and have the upside for future appreciation.

However, in many markets residential and vacation yields are closer to 5%. So let’s adjust the assumptions a bit and say that I have a mortgage of $80,000; the yield is 5% and the cost of debt is 7%.

Where does that leave us?
$5,000 in rent
$2,000 in expenses
$5,600 of interest

This leaves a net cash outflow of $2,600 or a net yield of -2.6% against value.

I was 80% debt financed so my down payment was $20,000. My return on equity in this case is equal to -13% on equity (ouch).

However, in a property market that is rising by 10% per annum we would have “received” a valuation increase of $10,000. So our net position would be a cash outflow of $2,600 but an asset appreciation of $10,000 – a net move of $7,400 on our equity investment of $20,000 (+37% on equity, yippee).

Further if we manage to convince the bank to stump up some further debt finance against the increased valuation then we won’t even be out of pocket. When inflating valuations combine with high liquidity, it seems like easy money and it is, sort of.

The trouble starts to come when valuations stagnate and/or you get caught with the bank asking you to cover the cash shortfall out of your pocket. In those situations, things can start to look pretty crappy…

Three years rent is $15,000
Three years expenses are $6,000
Three years interest is $16,800

The accumulated cash deficit would be $7,800 (a 39% reduction in our initial investment value – or – a 39% additional increase in exposure).

At a 5% deposit rate, we would have forgone a 16% (compound) interest – the money we could have earned by having the cash in the bank instead of in property. The swing is equal to 55% of our initial investment – on an asset that didn’t move at all over three years. So while we may get our money back in three years – we had to pay 39% holding costs and missed out on 16% interest.

These calculations are interesting to me because often we fail to factor in additional cash calls when we think about an investment. In the second example above, you’d be shelling out each month to cover the deficit – but – the value of the property would not be increasing.

Many people purchase vacation and/or larger primary residences under the assumption that they worst they will do is “hold their value”. In those situations, there is no rental yield on the property so the income gap is even higher. As well, vacation properties are (by definition) non-essential purchases. So our ability to sell is much more volatile.

When we are holding a non-yielding asset that requires maintenance, there is the cash outlay that we have to pay as well as the opportunity cost of the capital being tied up in the asset.

I wanted to lay out a simple example because I was sensing that many people now believe that property investing is a one-way bet, the worst you do is a nil return. In fact, like any depreciating asset – in a downturn you can find yourself locked in and paying money out.

Another common point of view is that it is worth owning any property that we will use ourselves. Well, that depends. I spend quite a bit of money renting properties around the world. The calculation that I do is to compare the total number of nights that I use a property with the capital cost (plus the running costs; plus the hassle) of owning that property year round. If you own then it is tempting to tell yourself that you can always rent it out. But do you really? Most potential renters will want to use it at the same time as you (holiday and peak times). Even if you are renting to friends, tenants are a pain.

Finally, beware that we all have a deep fear of missing out. Hearing about other people making money... Seeing other people own assets… …these things triggers automatic “envy” responses in many of us. So we’re hardwired to want to own “our” assets.

It takes a massive amount of discipline to sit on cash and wait.

Property can be a great investment. I simply get nervous when a see a lot of new people entering a field late in the cycle with an attitude that they can’t lose.

In a flat market, much of the “cost” is hidden from view. Property stagnates more often than it tanks and if you aren’t in a prime-prime location then you can be faced with crystallizing a short term loss or shelling out for a few years through a dip in local conditions.

In my business we have two mantras that we live by. We want to be able to: (a) sell in any market condition; and (b) find tenants in any market condition. This greatly limits the locations where we can invest and means that we pass on seemingly attractive deals in secondary locations. We invest a bit slower but the risk profile of our portfolio is reduced.

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