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The Lucky Country
++ A little over a year ago, I was a director of a company (highly leveraged) that found itself in a position where the board invited the bank to appoint an insolvency practitioner. It was a British company and that is how the Brits describe "going bust". For those of you familiar with the technical aspects, the company is in administration so it lives on. At the time that we made that decision, I knew that I was (likely) firing myself from my role with the company as well as putting the jobs of the entire local team at risk. However, the law in the UK is pretty clear and the directors face unlimited personal liability if they fail to take action. So, despite the large downside for everyone involved, the decision seemed pretty straightforward to protect the creditors. Something I had been told when I moved out to Asia was "always be willing to make a little less money, to preserve your values". I think about that advice often and have adjusted it in my head to... "be willing to trade a little success today, for an enviable life tomorrow". It doesn't come naturally for me but it does come easier with practice. About seven weeks after that board meeting, on my 40th birthday no less, I was reviewing a huge stack of Statements of Affairs. These are legal documents that have to be prepared/reviewed/commented... by the directors when a company goes into administration. That was probably the lowest of the low (December 26th, 2008). My new business (this site) came on line two weeks later and things started perking back up. ++ What does that story have to do with Australia? Well, if you shift backwards to my 39th birthday then I was down here enjoying the pinnacle of my financial life. So I went peak to trough in a year. Speaking from experience, sudden financial reversals aren't so bad -- providing you insulate your family from the impact. My ego took a beating but, frankly, that is a good thing. My lifestyle took a much bigger hit but, in my view, that is the way it needs to be. You can't call yourself a leader if you expect your team to take all the pain. So about the time I hit rock bottom (financially) Monica asked me, "Where would you buy a second house if you could buy one anywhere in the world?" Having insulated her from the true impact of what was going on, I had to temper my response. My answer was practical, "I can't afford another house." At the time, I was trying to figure out if I could afford to live in my own house! She pushed me to "just play the game"; so I did. I think I started by saying Vail, I've always enjoyed visiting the Vail Racquet Club - very nice outdoor 25 meter pool. At 8300 feet you get some real altitude training AND bright sun! Then the practical side clicked in and I decided that the cost of ownership would wipe me out so shifted my geography (to the other side of Vail Pass) and said.. "a cosy house in Frisco, with no home owner's fees". I figured that I could work on my Nordic skiing in the winter and that's a good base for summer riding. Monica said, "I'd have a place in Noosa." I heard that.
For those of you that followed my triathlon career from 2006-2008, comebacks have not gone all that smoothly for me. In fact, over that period, I managed to achieve everything with the exception of my goal (winning IM Canada). Definitely, shows that it was a good goal! So we have made it back to Noosa and, so far, things are going well. I thought that I’d end by sharing some thoughts about Australia. It is a place worth visiting for those of you in the Northern Hemisphere. The sun is INSANE down here! I spend 15 minutes screening up every morning. The UV is rated “very high” from 7:20am to 3:50pm. It will melt the skin right off you if you aren’t careful. Eight days in and I am darker than at the end of the summer in Colorado. My friends at masters swimming make jokes about the amount of skin protection I wear. Hardness - through many aspects of Aussie society there is a hardness. You see it in the toughness of the people. As an Aussie mate of mine likes to say, “if we were armed like Americans, there’d be real trouble down here!” The hardness translates to realism when it comes to athletics. The locals accept the link between longterm work and performance. You’ll NEVER hear an Aussie asking how he can swim a fast 1500m on three 45-minute sessions per week. As well, Australia is fundamentally a sporting nation. The Sunshine Coast (where Noosa is located) is a very active place. Aussie Dollar Cross Rate - Hands down, the US is the best value in the developed world right now. There are many distortions happening due to the US Federal Reserve’s massive monetary stimulus. These effects are much easier to see in other countries. Somebody is making a lot of money using leverage and cross rates – I have no idea on the magnitude but the international carry trade isn’t doing me any favors. For those of you not familiar with the carry trade – what you do is borrow in, say, US dollars and invest in, say, Aussie dollar bonds. When the Aussie dollar is appreciating, and the bond yield is greater than your cost of borrowing… you make a lot of “free” money. Of course, you can get wiped out if things move the other way. I had to stop looking at the exchange rate because it was impairing my life satisfaction! The true cost of being down here is invisible. The price I pay is what I won’t get done. By being smarter, I managed to hold the net cost of the trip to ~1% of the family’s net worth. That is a good deal for us in the current environment. The real cost of the trip is lowered productivity. I’m writing this blog in the basement, sitting in a chair, with my feet propped up on a bed. While that’s comfy, it isn’t the most productive office environment! The flip side is that I’ve noticed that I replaced future business development with current life investment. My losses in business productivity have been made up for in marriage investment. I joked to M that I like to make a strong move towards the end of the year. Christmas and my birthday are coming up and this is an easy environment in which to be a good husband. M played another game a few days ago and asked me what I would do differently if I only had a year to live. Given that my answer was work a bit less, I probably made the right call with my return to Noosa. gordo
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Monica and I are back in Noosa for the winter and this time we have a little surfer girl with us. How the heck did I manage to end up back here? This week I'll chat you through it.
So I spent the last year figuring out how I could get myself back to the Land of Under!