April, 2020

Once upon a time the last major gift a father might give to his children – let’s say up to WW II – might be a job, by way of helping them enter the same profession/trade as the parent. Teach them the ropes, introduce them to people, coach them on embracing a life identical to their father, and be content. After WW II there was more social mobility, so some Dad’s might plan financially for his kids to go to college, after which the assumption is the world would be their oyster. Or, for the still respectable blue collar families, ushering the kids into the union trades which had protected the family via the father for many profitable and protected years.

Either way, the point was: for most father’s there was an end to being both financially responsible for your kids, but just as importantly knowing that financial opportunities would come to your children through education, encouraging their dreams and interests, and planting seeds of ambition and responsibility. And this transition to them being self-sufficient began with their graduation from high school (for the blue collar) or college (ideally debt free, for the white collar). This is all very macro dreaming, there are differences at the margins, but the point was that father’s could do their part and plan for college, and the rest (a stable economy, the political environment, a meritocratic system, etc) would take care of itself; indeed, the rest could be ASSUMED.

Let’s say that ended, or at least changed, around 2001, specific to college educated white collar workers.

[I’m not educated in these matters, but I speculate that the good fortune (stable work, good pay, benefits) of blue collar workers stopped ascending in the mid-eighties.]

First, there was the Dot-com crash. Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 400%. I was one of the lucky ones in that group, as I started working at Cisco in March 1993 with 500 shares of Cisco stock to my name that proceeded to split every year (as well as the other stock options that I would receive each year at my annual review), very reliably. I recall some random Spring Sunday in 1995, living so happily in San Francisco, and wanting to understand the stock market better. I researched P/E and all sorts of other mildly esoteric stock concepts, then using the Sunday morning San Francisco Chronicle I chose 3 companies to invest $2000 with, each. And then I forgot about it entirely; not because I lost interest, but because my interest was to buy-and-hold, understand it (slightly) but not think about it (daily, weekly, or even yearly).

Years later, but before March 2000, I finally took a look at those stocks. One was worth around $1500 (so after all that time it LOST $500); one was worth a little more than $2000 (very slight gains); and one was worth $75,000. Stunning. But I learned: investing is smart, long term investing is smarter, and keeping it simple and not obsessing over it smarter still.

But the Dot-com bust taught me another important lesson: make no assumptions. The Nasdaq fell 78% from its peak by October 2002, giving up all its gains during the bubble. The one was I was saved is that those options I received in 1993 (and ’94, and ’95…) HAD to be sold after 4 years. So I made a very handsome profit, not of my doing (given the chance I would have held onto Cisco stock as it plunged during the Dot-com bust).

The stock market prevailed, but the lesson was now in bold letters: you can get burned.

Then, of course, the Great Recession of 2008-2009. Same thing: eventually, if you stayed in the market, it rebounded although it took a few years.

Now, of course, the complete economic shutdown from COVID-19.

But here’s the thing. Even though the markets recover, it takes time, and there is such a thing as being the wrong age at the wrong time. Someone out of college just (say 1-3 years) before the 2001 or 2009 crashes likely found themselves in the exact same financial situation when they were 30 as they were when they were 22. Or if you were 1-3 years from retirement before the 2001 or 2009 crashes, now you might be 8-10 years from retirement. NOTHING can be assumed anymore.

Which gets me to the girls. I’ve prepared to pay their entire college costs, so that they graduate with a clean slate, no debt, and nothing but opportunity ahead. But if this surge/crash cycle continues, as often as it has, I don’t see a clear way for them to improve their lives by financial gain simply by working hard, living simply, and saving and investing as much as possible as time goes on. If their investments go up 100%, only to drop 150%, then all that time in between to get back to 100% is essentially wasted time. Again, I’m being macro (and pessimistic) but it’s on my mind.

Instead of getting the girls through college, then living my life and leaving them with a (hopefully) nice amount upon my passing, now I’m thinking I may need (or more likely want) to be there for them as they go through life’s stages (first new car, first house, first child…). This is not to say that I don’t expect them to be responsible and thrifty and financially smart; it’s to say that in a capitalistic environment like today, where the risk is entirely mitigated by the Government for the very well off while everyone else is on their own to make the right moves (which is a difficult proposition during the emotional rollercoaster of extreme economic turmoil), those that should be deemed winners through long term buying and holding may not be. There are no random $2000 investments turning into $75000 goose eggs anytime soon, no matter long long you hold it.

All things considered, we are hanging in there.

Annika, by far, has the most difficult transition. 17 year olds are extremely social beings, and Annika had already established her much loved routines (driving to school with Efie, seeing Clara(s) at school, soccer practice with her teammates, weekends out with Maria and other friends, etc). So the paradox is that during this time is that we all get to see Annika much more (although not as much as one might assume, given we are all remaining at home 24×7), which is great; and she gets to see us so much more, which isn’t so great.

I wish I could persuade Annika to be less judgmental, more open. In 5 weeks I’ve likely taken a 90 minute hike/walk (from the house, through the woods, along the Glasenbach, extremely soothing) around thirty times, and Annika hasn’t gone once. She’s incapable of measuring the value of 90 minutes out of the house against 90 minutes with me. Andrea and I have done aerobics 5 days a week, compliments of Cisco via a virtual class, and Annika has done none. She dismisses it entirely, which I understand if life were normal; but it’s not, so she’s choosing to what? Spend another hour in her room, another hour on her phone, another hour contemplating the madness of this situation? It’s obviously healthy but I long ago lost the ability to persuade this lovely lady who used to adore me. I obviously worry about her mental health (she’s no more or less vulnerable than every other person in the world) but I’ve concluded that I have to tread VERY carefully as I’m more likely to set her off than to help her release and forget. It’s such a bummer to not have any ability to positively influence someone I love so much.

Niki and Britta are doing much better; they are 12, after all, so very resilient. They immerse themselves in one primary thing, tire of it after 3 or 5 or 7 days, then move on. First it was ping pong, then games (backgammon, cards, rumikub, etc), then playing at the Glasenbach creek, then baking, then swimming…but after 5 weeks they are slightly noticing the repetition, but still I think they absolutely prefer this to what they had. They miss their friends and school and German immersion…they certainly miss Mimi and Opa…but they REALLY like staying up late, sleeping in, not having to run here and there following the schedule Andrea jammed tight with activities, cramming 5 days of homework into ~2 days and then relaxing a ton.

While Annika definitely is not going back to school – she knows it’s over and I’m sure that’s difficult to process – the belief now, absolutely subject to change, is that the schools may start to open in ~3 weeks. No idea how that might work if it does happen; the regular schedule ends the school year on July 10, so there are still nearly 3 months of school left so I can certainly see them returning at some point.

As for me, I’m still so happy to be seeing so much of the girls. I’m certain I’ve spent more time with them these 5 weeks than I have the last 8 months combined, so it really is a gift. I’m able to get my work done as needed, do an hour of aerobics each work day, take my 90 minute hike 5-6 times per week, and drink way too much mocha coffee.