farewell to the Adventure Van, quality real estate and cheap hobbies
Greetings from the University of New Hampshire! Today I unpacked my gear from the Adventure Van and took the kayak racks off the roof for the last time. I bought the Adventure Van for my wife in 2004 when my eldest child was only 7, so we raised our family in her through elementary and junior high, cruising in style to soccer games and drive throughs. With the flip-down DVD player in the back, she was the coolest thing since parachute pants. I inherited the Adventure Van in 2012 when we upgraded my wife to our "new" car - a 2012 Pilot (which was actually new in 2012, but now has more than 100K miles). Since then I've driven the Adventure Van from New Mexico to Georgia to the Canadian border and everywhere in between (last summer we clocked almost 2,000 miles driving around New England to visit my students on their internships). At 5,500 pounds she is fantastic in the snow, and with a 300 hp V-6, she still takes off like a rabbit. She's the perfect size to pull out the seats and put a cot in for camping, and she's carried my kayaks faithfully for years. She smells a bit of mud flats and smoke, which to me is just a reminder of what is important. My wife and I agreed to sell the Adventure Van to a friend, and last weekend we ordered a new car for my wife (I will get the Pilot), so today I took the kayak racks off for the last time, and pulled all my gear out of her. She's been a faithful companion for 18 years and almost 200,000 miles, and I'll be sad to see her go.
A couple of weeks ago I was listening to one of my favorite podcasts, Conversations with Tyler, which I have shared here on RWL several times, and Tyler (Cowen) had Chuck Klosterman on for an interview. I don’t think I’d ever heard of him prior to the interview, but I thought he was funny and well-spoken and had interesting ideas, but what really struck me was toward the end of the podcast when Klosterman and Cowen started talking about investments and risk. Klosterman claimed to be risk averse, and Cowen made two points that I thought were interesting: 1) the US is a counter cyclical asset, and 2) if you want to insulate yourself from financial risk, buy high quality real estate and find cheap hobbies.
So to the first, Cowen made the claim that living in the United States (and being a US citizen) is a “counter-cyclical asset”. Counter cyclical assets are valuable to investors because when the market is doing poorly, a counter cyclical asset does well (and vice versa). On average, both do well, so if you can hold counter cyclical assets in your portfolio, you can insulate yourself from risk. What I took from this comment was that the US has so much opportunity that if you work hard and have modest luck, you should do well. So you can afford to take more risk than if you lived in a place with less opportunity (like most of the rest of the world - though certainly outside of the developed West).
Regarding the second point, to insulate yourself further (if you really want to protect yourself), buy high quality real estate and find cheap hobbies. Shelter is one of the basic needs of all animals (including humans), and also one of the largest expenses paid by a family unit. Owning can stabilize and sometimes reduce shelter costs, so this is a way to provide financial protection. Regardless, we all need to control some real estate - either as a renter or owner. Owning has real costs that renting does not, but it also has investment value. From my personal experience, owning real estate requires the ability to be a very long-term investor (i.e., 10 years plus). The shorter your investment horizon, the more risk you are taking. From what I have seen, real estate tends to run in roughly 10 year cycles. I think we are approaching the end of one now, though it is hard to say given the inflationary pressures that the Trump and Biden administrations have unleashed over the last two years in the name of saving us from COVID, and Putin smashing the post-Cold War peace in Europe. Owning real assets like real estate is probably the best hedge against inflation that the average person can take on.
The second part of the second point, find cheap hobbies, goes to quality of life, and this is where I tie back to my little story about the Adventure Van. Even for someone as lucky as I am to have a job that allows me to do things that I consider recreational (and I would do after work if I had a real job - like mentoring young people or writing a newsletter, for example), we all need leisure activities in our life that provide us a sense of meaning, connection, and purpose, but also a chance to unwind. With all three of our children now adults, my wife and I had just started to indulge in some international travel in the before-times (i.e., before COVID). In short order, we had visited Rome, Paris, Dublin, and some other great places, and we hope to get back to that soon - maybe even this summer. But we can’t afford to do that sort of travel all the time, nor do our lives allow for that. The main reason we can afford to do that some of the time is we are very financially conservative most of the time. If you’ve been reading this newsletter for any length of time, you know the hobbies I like to indulge in are kayaking, cooking, and photography (and sometimes art). Most of these activities are near zero marginal cost - meaning once you make the initial investment, doing them one more time costs almost nothing. E.g., once you buy a digital camera, taking one more picture costs nothing; once you buy a kayak, going paddling costs nothing more than the gas to get where you are going to launch from (which for me is about 1.5 miles, which even at $4/gallon is almost nothing). The Adventure Van was perfect for indulging my hobbies. I could throw my kayaks up on the roof and my gear in the back and not worry about it getting damaged. I could camp in her if I took a road trip. Unlike real estate, cars are a depreciating asset. If you own a car for 10 years, it is going to be worth significantly less than when you purchased it. If you were to buy a new van for $50,000 and finance it at 3% for 60 months, you would commit to a payment of roughly $850/month. That’s a lot of plane fares to Europe.
Being born in the United States is an incredible privilege. It’s relatively easy for most people to live a high quality life if you make a few careful decisions. “High quality real estate and cheap hobbies” is pretty darn good advice.
On to the links!
What: Foreign Affairs, Madeleine Albright: America's Opportunity to Lead the Fight Against Authoritarianism
Why: Madeleine Albright, the first woman to be Secretary of State, passed away this past Wednesday at 84 years of age. She penned this article last year. First, I can only pray I am a shadow of what she was when (if) I get to 83. But second, this is just the optimistic boost we need at this time. The fight in Ukraine is not just about territory and the profound injustice of the war itself. It is about authoritarianism vs. democracy. The West has been getting fat and self indulgent in the wake of the collapse of the Soviet Union and has allowed authoritarianism to metastasize once again in the form of a Sino-Russian pact.
What: American Purpose, Francis Fukuyama, Preparing for Defeat
Why: Fukuyama is one of those thinkers that divides people - you either find him something of an oracle or you think everything he says is wrong. I’m in the oracle camp. Not that everything he says is right, but how he thinks is so clear and useful.
In this short piece written two weeks ago about the invasion of Ukraine (which seems like a lifetime ago) he predicted a Russian defeat. In the intellectual circles I follow, this article has been getting a lot of references, so I thought I would share it here.
What: MIT Technology Review, A locked-in man has communicated in sentences by thought alone
Why: This is straight out of science fiction. Implants that have allowed a man with locked-in syndrome (unable to control any voluntary movement) to communicate. I can’t even begin to imagine the nightmare of being locked-in, but this solution is just stunning. It is also proof that this sort of cyborg interface is possible, which means that this is only the beginning. The article doesn’t go in this direction, but it is what I thought of. Once we master this technology, imagine how it will change everything. It’s both thrilling and frightening. But for now, it’s a real gift to this person, and I could see its uses extending to other medical cases.
What: Mercatus Center, Let Nurses Do Their Jobs. Reform Scope-of-Practice Laws. (3 min)
Why: A short video in favor of reforming scope of practice laws to allow nurse practitioners to practice independently of a physician’s oversight. I’m a fan of expanding independent practice within scope of practice for more providers. I’d love to see some sort of independent practice for lower level providers as well. Opticians, dental hygienists, etc.
What: Conversations with Tyler, Chuck Klosterman
Why: This is the podcast interview that spurred my long introduction above. If you want to skip to the part I was referencing, go to about the 52 minute mark. They start by talking about crypto, but quickly hit on the quality of life stuff I discuss. Most of the interview is around Klosterman’s new book, The Nineties, which I am reading right now and is very good. I suspect I’ll have more to say about that at a later date.
What: HFMA’s Voices in Healthcare Finance: The real reason people don’t get vaccinated for COVID-19? They don’t feel like it.
Why: So, I know, the last thing you want to listen to is another podcast about antivaxxers. I almost didn’t listen to this because I am so done with COVID. But I encourage you to give this one a spin - it is much more about behavioral challenges and communication than about COVID per se. It’s very interesting.
What: Honestly with Bari Weiss, Things Worth Fighting For
Why: I feel like I have to apologize for sharing so many Bari Weiss podcasts, but she is really good. This one could be titled, against self-destructive relativism. No, not everything is morally equivalent. Some things are worth fighting for.
Thanks for reading and see you next week! If you come across any interesting stories, won't you send them my way? I'd love to hear what you think of these suggestions, and I'd love to get suggestions from you. Feel free to drop me a line at email@example.com , or you can tweet to me at @mbonica .
If you’re looking for a searchable archive, you can see my draft folder here: https://drive.google.com/drive/folders/1jwGLdjsb1WKtgH_2C-_3VvrYCtqLplFO?usp=sharing
Finally, if you find these links interesting, won’t you tell a friend? They can subscribe here: https://markbonica.substack.com/welcome
See you next week!
Mark J. Bonica, Ph.D., MBA, MS
Department of Health Management and Policy
University of New Hampshire
Health Leader Forge Podcast:
“The meaning of life is to find your gift. The purpose of life is to give it away.” – Pablo Picaso