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My Mother’s Brother

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In the hallways of Portland Internal Airport or PDX.

I boarded the Portland, Oregon, flight at 8:05 this morning to fly to my Uncle’s memorial service in Portland.  It’s been a long pull this week, and I’ll be landing back home at around 10:30 tonight.  I’m sitting here in the terminal because the Uber to the service is only 20 minutes away, and I’m a bit early.

Work has been hectic.  Unfortunately because this is a blog that can be seen by other people, and I do run a substantial part of my companies business, I really can’t say more.  What I can say is that I’ve been throwing my heart and soul into the business trying to figure out how to make us more profitable.

Somebody sent me a note, after I had done an email blast, and said, “You seem to know how to motivate people.”  The nature of the note was about a decision that I made.  Making a few calculations, I figured out how much the activity was really worth.  I sent the note calling out that this would contribute to multiple millions of dollars with an actual figure, and just was not a trivial task that would not have any impact to the bottom line

I basically wrote back to the person that said that I could motivate people, and I stated something like, “You know, I both speak and listen money. A lot of people can listen money, but they can’t speak it.  So if you can call out the impact of the money, they can listen and they will act.”

Money can be the roots of all types of sins.  However, it can also be freedom to allow you to do things.  I have been blessed with some type of security, and this has given my wife and I the ability to support our kids through college, and contribute to the work of the gospel.  I would not call myself out as a sacrificial giver.  I am a giver to what I believe the Lord has called out in scriptures.

My father ended up making a fair amount of money that gave him security in this life.  Some of this was driven by his years at Boeing, where he ended up in a strong position.  But even more of this was driven by investments that he made outside of his normal work.  Finding himself at 50 years of age, he decided that he had better do something more for retirement and ended up buying a farm, an apartment, then finally a nursing home.  Right after he retired at 62, he flipped the nursing home, then 20 years later, he flipped half of the farm while the real estate market was at an all time high.

My mother came from a very large family of kids including:  Aunt Norma, Aunt Dixie, Uncle Bert, and Uncle Bud.  My mom always got along with my aunts, but she was extraordinarily close to her brothers.  One of them had a troubled marriage then divorce, which caused her to spend a lot of time on the phone with him.  The other was a brick layer and hard worker, but never had a lot of money.  He was good to his kids and a wonderful man.  He was close to my Mom and my Dad.  When my mom died, he was a source of comfort to my Dad.

It is this Uncle who I am flying to remember his time on earth.

Around 25 years ago, my uncle had gotten to the age where he could no longer lay bricks, and while my Uncle and his wife had a separate small line of business, they really could not make this go.  So, my Dad and my Mom knew that they did not have the resources, and they offered to allow my Uncle and his wife to live in our farm house for free.

When my my Mom died, my father never questioned if he would continue the arrangement.  When my Dad died, my sister and I never questioned the arrangement  It was my parents wishes to grant him this favor, and who were my sister and I to question this.  What is a house rental worth?  A substantial amount of money considering that we could have rented the house all those years.  I speak money and I recently told my sister how much this was equivalent to for our family  She said, “I never realized that, but now that you mention it, it is a mind blowing amount.”

The question of how to use our money is a funny thing.  My sister and I currently have a LLC that our Dad and Mom left us.  We share thing unequally because my sister has taken the bulk of the work.  However, since September, I haveare also been heavily engaged.  In a completely different way, but engaged. 

My Dad had bought muni’s, Optax and Ornax, to be exact.  While they throw off money, which allows us to keep the rest of the property going, the fund has shrunk over the last decade.  When compared to the S&P 500, we have done okay after divideneds, but nothing like what we should have done.

So, I have been working the account since September.  I believe that by looking for value and dividends, with some covered call plays, you can moderately outperform the S&P500.  Now mind you, this is dangerous, and I recently told my sister, “you need to keep praying for guidance.”  However, we have slowly started to rebuild the fund, while continuing to keep enough dividends from the munis to finance our needs.

Over the last couple of days, I took some time to layout my finances.  I have heard that to get to security, you need multiple sources of income.  I believe that this is very true.  There are three main sources of income that you can pull from:

1. You can work for somebody else and be employed

2. You can place your money in dividend stocks, and use the outflow from the dividends

3. You can have rental property and have somebody pay you to live there

In my own personal portfolio, I have all three.  My job continues to pay at least half of my income.  My financial drain is at an all time high.  As mentioned in this blog before, I changed jobs and moved to the Silicon Valley.  God saw to bless us with an incredibly unique house just above Los Gatos, and while this was a once in a life time opportunity, it was expensive.  So, I have a rather large mortgage payment every month.  On top of this, I have one son in college, with no bills, and I have two kids in private school, which my wife and I think is important considering that we wanted a Christian environment for our kids.

Life changes dramatically over the next 8 years.  This comes in two fashions.

1. At the end of 8 years, my kids are all through college.

2. At the end of 8 years, I believe that we will have established a steady rental stream from our properties.

3. If the stock market doesn’t crater, and if God leads, I should increase my dividend flow.

So roughly 100 months to a dramatic new life.  I am hoping that God will give me the strength and the providence to keep working full time to this goal.  So, what is the end state of this?

Really it is continuing my earthly Dad’s vision.  My earth Dad decided that he wanted to create something for his kids, so he bought and created a wonderful place in Port Orchard, Washington.  I may have the opportunity, God willing, to do the same thing in my place in Los Gatos. 

Only time and God will tell where this will end up.

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I have totally changed my life style and regressed almost a decade.  After going somewhere around 6 years of not biking to work, I took out my bicycle last week and got onto the old stead.  My wife tracked me on Life360, and around 45 minutes, I had pulled into my new work.

When I lived in SoCal, I actually bought my house so I had a bicycle commute to work.  It was great.  However, about 6 years ago, the company grew so much that it had to move.  It found an enormous building close to the Irvine airport, and relocated everything.  The problem is that their were no real good roads to the new place from my place, and the commute went from around 12 miles to around 22.  There was no way that I was going to spend 45 miles or more bicycle commuting.

So I basically changed sports to golf. 

Now I’m going back.

The Los Gatos area and San Jose in general really does not have the same golf culture as SoCal.  Again, my previous neighborhood had two brilliant golf courses just 5 minutes away from my house.  So, there are few places on earth that can replicate what I had.

However, the biking to work is a much smaller piece of a bigger puzzle.  I am not just commuting to work, but I am restructuring my life so that I can workout more.  I have re-engaged my triathlon life style, and I hope to do another triathlon before the end of this summer.

As I get older, I am constantly interested in the actual process of getting older.  I read a recent article that as we age, we clearly have differences in our personalities.  In other words, the younger version of ourselves would not be the same personality that the older version would be.

However, I notice that I have a few things that have stayed the same.  My wife for one thing.  We were just teenagers when we met.  I’m a very happy person because of it.  Maybe we have both changed, but we’ve changed together.  However, when we met, we immediately started doing things together.  When I say we did things together, I mean that we ran, swam and biked together.  Although we had met, we were not together back in 1982.  However, we both did the United States Triathlon Series on Mercer Island in Seattle in 1982.  She went on to place somewhere in the top 3% of women, and I went on to get lost and ended up in the bottom quarter of the men. 

As mentioned before, 2016 was basically a year without any workouts and a lot of stress.  It placed around 10 pounds on my body, and it established a bad trend for my overall waistline.  While athletic exercise is not required for losing weight, I find that it incredibly helpful.

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The above chart shows my athletic calorie burn.  As you can see, in 2015, I was burning around 7000-8000 calories per month.  This would be equivalent of walking around 70 to 80 miles for for 150 pound person.  Basically nothing happened in 2016, then you can see a small attempt of re-engaging my athletic routine in October when we moved into the new house.  However, January was the real beginning.

February set a new record of 9000 calories burned, and if March stays on track, I’ll set a two year record for calories burned.

Now, we just need to see this turn into weight loss…..

Here’s Mud In Your Eye

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My father-in-law spent his 89th birthday with us, and today was the day he left.  His flight was onto a plane that left at 4:10pm.  However, the days have been getting longer, and my wife came back from the airport in time so we could take our bike ride up St. Joe’s hill in Los Gatos.  As I’ve stated before, I’m getting back into shape, and this ride is a great way of getting  back into it.

Although the ride is short, just a little over 9 miles, it has some real climbing in it, with the rider needing to climb somewhere around 1400 feet over the length of the ride.  My heart rate averaged somewhere around 122, with around 12 minutes of my heart rate being over 140.  So, not a bad workout.

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The trail was a bit muddy, and my wife and I got off our bikes a couple of times to wade around the mud.  The temperature was somewhere around 60 degrees or so.  While not warm, it was very acceptable.  The water has really been coming down this year, and it is the wettest winter on record over the last 10 years or so.  The average rainfall is around 24 inches.  California, as everybody knows, is in a drought, and we are not getting our average rainfall.

However, this year, we are already at over 29 inches of rain.  Seattle gets around 38 inches of rain per years, so with just a little more weather like our current track, we’ll have Seattle in Los Gatos.

As we biked up to the Lexington reservoir, we could see that the spill way was in full use.  This means that the Lexington dam could no longer hold back an overflowing amount of water.  Indeed, as we came down the mountain, we got an exceptional view of the water, and, as you can see, there is no room left.  This is a dramatic change from even this summer, when the water was much lower.

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As we were in the middle of the ride, my wife chirped up and stated that she was having a lot of fun.  We started to chat about how many years we had been doing this.  My wife and I have been biking together for over 30 years.  We actually think that we biked together before we ever rode together.

After all these years, we still enjoy doing stuff together.

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So I told my wife that I had a good day of mountain biking yesterday.  As we went to church, my wife, who had been laying off biking because of a bad knee, said that her physical therapist would allow her to bike, and she would like to go out with me next weekend.

Now, I was pretty wiped today, and my wife knew it.  However, I could tell that she was actually pretty excited about biking in the new area.  She absolutely loves the outdoors, and ever since she was a young kid, she loved running in places she’s never been.  So, she is raring to go out and see something new.

We got home from church, and I remarked that although I was pretty tired, I thought that we should go biking.  It didn’t take any real conversation, and she was ready to go.  We found her biking clothes faster than mine yesterday, and we took off on the same trip as yesterday.

Now I have to tell you that I was not feeling super strong.  There are three things that hit me immediately:

1. My seat was really sore.  After not sitting on a saddle for a long while, your posterior really needs some time to acclimate to the workload of your body weight on a tiny seat.

2. My quads were immediately feeling it.  I knew that I had ridden just yesterday.

3. Finally, while mountain bikes are more upright, there is still a lot of weight on your arms.  If you are not use to it, your upper body get tired.  And I started off tired.

Now, I bought my wife’s bike a while ago, but it is actually a solid dual suspension bike that weights something like 4 or 5 lbs more than mine.  However, my wife is a crazy aerobic human being and nothing seems to slow her down.

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The chart demonstrates this very well.  Over the course of this ride, we monitored our heart rate. In the chart above, her heart is the blue line and mine is the red line.  You can see that while we generally had the same ups and downs, and she even had a few peaks up to 140, generally she was almost 20 beats per minute slower than I was. 

What’s nice about having a wife in really good shape is that when I came home, I collapsed into a seat and drank my smoothy.  My wife was happy and cheerful and even made dinner for me while I took a hot shower.

So not only is she an aerobic animal, but she is a kind wife.  I got a great sweetie.

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Here I am with mud on my forehead, as I return to mountain biking after a 6 year break.  Back in 2010, I stopped cycling when I started golfing in earnest.  It didn’t make sense to spend a lot of money at a golf club if you were not going to use it all the time.

However, once we moved back to the Silicon Valley this summer, I gave up the golf membership.  The club I belonged to did not have a branch up here, and if you are familiar with the silicon valley culture, mountain biking is as big as golf was in SoCal. 

I probably would have run today, but the ball of my left foot has been very sore, so I thought that I could do without the pounding.  So, I made my mind to dust off my old mountain bike that I had bought in San Jose about 15 years ago.  I was a fearful of the pain, but one way or the other, I was going to go biking.

Now the biking stuff was scattered around our new house as many things simply are still in boxes, and finding clothes, shoes and helmet was not easy, and my wife spent a couple of hours digging around in the garage.  My son has used my bike for a college class, and I had to remove his pedals to put on clipless and adjust the steam and seat post. 

I had mapped out St. Joseph park as my target for the ride.  The trail starts at the Lexington Reservoir, and the Lexington Reservoir is only 3 miles from my house.

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However, taking 6 years off then biking 10 miles while losing and gaining around 1300 feet during you first trip back on the the bike is not something that I would recommend, but I had my 54 year old body do it anyways.  I actually had to walk some of the very steep uphills because I just could not make it up. 

However, the view up at the top was nice, and I felt great to be so active.  While it is always painful to get out the first time, you know that the follow-on sessions are going to be easier.

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After I got home, I just laid around for a while.  But company came over, I ate, and got revived.

I’m now thinking about how I can make this loop faster the next time.

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As I wrote in my last blog post, 2016 was a pretty tough year.  One of the things that I did not spend a lot of time on in the last blog post was the amount of flying that I was doing.  Basically, I was up in the air almost every single week.  Southwest counts up my segments, and I estimate that I made around 90 flights if not more.  Most of the flights were fairly short, from Orange County to San Jose, but this meant that I was always waking up early, staying in a hotel, and traveling.  The only fringe benefit of this is that I got A-List preferred on Southwest, which made sure that I got to the front of the line for the check-in.

However, it is already well into January, and I am on my first trip of the new year.  This time I am flying into Denver and then travelling to Longmont, Colorado, for two days. 

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As I flew out of San Jose Airport, just a few minutes ago, I looked out of the window and over the plane wing.  If you look in the photo above, you can see there is a canal just off the plan wing that is filled with muddle water.  This is the result of an unseasonably wet winter.  California has been going through a drought, but this winter brought an extremely high level of rain.  Something that they had not seen in a decade or more.  This year, Los Gatos, where I live, had 23 inches of rain.  Last year it was 11 inches of rain.  The normal amount of rain for the entire season is is roughly 23 inches.  So although we still have February, March and April left, which normally brings some rain, we have already gotten our yearly total.  This happened in roughly 6 weeks, so it really overwhelmed the local reservoirs, and filled most of them to overflowing.

When the rain comes, you use it to fill your reserves.

I’m reading through the Bible, and I am reading the story of Jacob.  He forecasted 7 fat years.  In my own life, the last 6 years have been very fat and have allowed us to accumulate savings.  I’m a big believer in dividend stocks, and what is nice is having a portfolio that throw off money.  This really has been an extremely important contributor to my ability to support my family and our charities.

I’ve been thinking a bit about my future.  I have several drains on my finances that time out over the next 8 years.  One child is out of the house (although we are still paying phone bills, car insurance, and other small expenses), and I have three to go.  However,  this steps down in chunks. 

My next child has 3 more years of expenses.

The following child has 5 more years of expenses.

The last child has 7 more years of expenses.

So the question is “what do I really want to do with the rest of my life.”  I am in the unique position of having a portfolio of stock, and my expenses are about ready to go down over the next 7 years.  While 7 years sounds like a lot of time to a 20 year old, 7 years flies by when you are 50 years old.

I’m sure many people would say, “sell the house in the Silicon Valley and move somewhere cheap and never work again.”

As any reader of this blog understands, I am really interested in contributing as long as I possibly can.  So the first question is answered “do I want to work?” and the answer is “yes.”  So now the question is “am I capable of working?”

Now, the Silicon Valley is known for ageism, but this is for highly technical jobs.  Quite frankly, I don’t know how to argue against ageism in many ways because we absolutely do slow down as we age. 

It is truly unfortunate that we are set up so we, as a society, are afraid to call this out.  If you are writing code, I think the most brilliant work that you do is somewhere in your late 20s to early thirties.  This is because you have the combination of peak brainpower, which you can measure, and peak background.  We should be paying these young minds the absolute maximum that we can because this is when we get the most out of them.

However, once you get over this age, I believe that your output, and your contribution to the company really does decline.

What funny is that everybody recognizes this from physical work or athletic ability.  I don’t know anybody that started in shape, then kept in shape, that would be doing physical work at the same rate at when they are 20 or 30 in contrast when they are 50.  For the most part, there are no professional athletes over 40, except in golf.

However, even though you are in decline once you get past 30 or so, there are multiple things that you can do gain to be able to contribute successfully to society.  If your value is just raw technical horsepower, you probably are going to decline.  However, this is just one small part of business.

What you do get is the following:

1. You gain wisdom and the willingness to bite your tongue more.  Some of the best business people are old business people.  I’m not talking about people that do the job 9 to 5.  I’m talking about people that live the business and enjoy the business.

2. At least for me, handling people is something that you get better at all your life.  (Ignore a clear sub-segment that gets old and develop a bad attitude.)

3. There are a variety of age mitigation activities that you can do to make up for this decline in your capabilities.  These include aerobic activity, which I have been describing a lot.  I also believe that certain foods and chemicals show very strong promise for helping us age better.  Omega-3 (EPA/DHA) and blueberries are a couple of my favorite.  However, I also pop a couple of other things that may help over time.

This brings me to one of my heroes.

Warren Buffet is 86 years old, and I don’t think anybody is accusing him of being unproductive.  So let wind the clock backward on this one.  Buffet was 56 years old in 1986.  So the question is “how much has Warren Buffet expanded his wealth over the last 30 years?”

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The answer is really shocking.  Because 30 years ago was a very special time for Warren Buffet.  Back in 1986, Buffet was just becoming worth a billion dollars.  The chart above shows that in today’s dollars he status in 1986 was worth $3B, which has some controversy because the consumer price index is not quite this aggressive, it would say $1 in 1986 was worth $2.19 in 2016—so the numbers have some leeway. 

Regardless, today his net worth is approximately $74B dollars.  So, after an age when many people think that they should be looking forward to “winding it down,” Buffet was ready to propel and grow this wealth an unbelievable amount.

One of the interesting thoughts, is even just the S&P500 returned 11x growth over the same time.  So Buffet was 7x better than than the S&P500, but actually the S&P500 is nothing to sneeze at.  The health of the S&P500 is something Buffet has pointed out numerous times.

My problem is that I will interview older people, and I can see that they have let themselves go.  You can hear that they did not learn anything new, and they aren’t doing what’s required to keep their brains up to speed.  They are tired of their life, and they really don’t like their job.

I am determined that this is not me.  I’m tracking like Buffet as much as I can.

So, I have been thinking about what I would like to do.  Since I want to keep working until they stick me in the ground (or when I truly feel that I don’t contribute to my company), I want to be able to follow the path of Warren Buffet.  I will never have his wealth, barring divine intervention.  I don’t even expect to multiply my wealth by 74x.  However, I really think that I may have at least another 30 years in front of me.

My first priority is to simply do the job that I have now.  For so many reasons it is hard to count, I feel that God has called me to this job.  Now, things can change real quick and real fast.  So I may not have this job tomorrow, but until I see it going the wrong way, I’m enjoying every moment.

However, I do think it is very helpful to be thinking in contingencies for the future.  So, I have asked myself, “What is next?  What do you want to do that you would be paid nicely for and contribute to society?”

The subject of ageism is of extreme interest to me.  I’ve been thinking about this a lot lately, and I would really like to study the way to handle the economics of older people in our society.  This sounds like the perfect subject for a doctorate because young people never want to study older people.  More than this, they probably feel that it is not their place.

 

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There was a skit on Saturday Night live where they had “Black Jeopardy.”  Louis C K played a contestant who was a white professor person that taught black studies at Brigham Young University.  (A lot of twists in here.)  The message is that his role was funny because you could tell that he really didn’t understand black people because he wasn’t black.  It is similar to a young person studying the old.  You need somebody that has lived it to really understand it.

So, a Doctorate of Economics with a dissertation in some of the implication of ageism would be incredibly fruitful for not only myself, but to many others.  One of the main things I would need to do is take the GRE.  I would want to prep for this, but it would tell me how much brainpower I lost over the years from when I took the ACT.

My suspicion is that I’ll test lower than when I took the ACT for college, but I’ll test good enough.

It’s on my todo list someday, and I’ll make sure to share it with you.

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So I come into the kitchen last night and I see my wife decked out in her lab coat.  She has her rubber gloves on, and she’s cleaning up the kitchen.

“What ‘cha doing?” I ask

“Got my lab coat on, it’s pretty warm,…and I think I look cool,” she answer back.

Then she giggles like a junior high school girl after saying something that only she and her friends understand.

My wife has got a wicked sense of humor that I love.  Its not mean, just a bit goofy.  It’s one of the best things about her.  My youngest daughter, which we all agree studies way too much and has a very serious tone about her, is not a goofy person.  However, my wife will often sneak into her room to have deep talk with her, and somehow they go goofy.  I will hear them just laughing like crazy.

The other night they were laughing over “smashy racey car game,” and I have no idea what they are talking about.

As for me, it is the start of the new year, and I have really not been as productive on the weekends as I would like to be.  The nice thing is that we have all of our stuff stuck somewhere, but the bad thing is that I haven’t really gotten to pull everything out and start to organize. My goal every weekend is to stay to organize more.

This is mainly due to my desire to get back into shape.  I unfortunately have gained a number of pounds since taking the new job.  Life really is priority list, and if I have stuff stuck into corners somewhere, the first thing I’m going to emphasize is getting back into shape. If you gain too many pounds, it is very difficult to cut them out, so I don’t want to let my body go too far.

How did I get into this state? As way of background, in May of 2015, I jumped out of engineering back into business.  This was profoundly stressful.

I decided that I both wanted, and I was uniquely capable, to run the business side of our enterprise business at my previous job, and they let me do it.  During this time, I was in a more stable environment.

My housing situation was very stable, and I didn’t really have anything to do on the house. So all I had to do was go to work.  Because we were members of the local golf club, I would golf roughly 100 rounds per year.  While not aerobically challenging, you do consume quite a few calories if you walk 8 miles on the golf course and carry your clubs.  Then I would try to get in one or two 3 mile runs in the morning during the week. So, I had four days a week that I might get some good workout in, with the weekend being the bulk of this.

I was in pretty good shape all things considered.

However, after nine months in the new role at my old company, our company went into some struggles, and I decided after 14 years, it was time to look for new pastures.

As the readers of the blog know, I not only jumped companies but I ended up starting off at one job, moving to a new job, and selling and buying my old house.  About seven months ago, I got the job role that I currently am doing.

As I wrote, not only the job churn, but we moved from SoCal (Coto De Caza, CA) to NorCal (Los Gatos, CA), and I had my sell house fall through twice. 

Net-net:  I’ve had a ton of stress for almost two years, I completely stopped working out with the switch of the job a year ago.

As Christmas rolled around, I was moved into the house, and I knew that for my health and mental capabilities, I needed to start working out again.

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With the move to Los Gatos, I don’t have a golf course around. In my last place, we had a world class golf course just three miles from my home. However, with the change in the geographical regions, I just can’t justify a golf membership. In SoCal, I had the perfect golf environment, and in Norcal, both budgets and geographic region really is not as conducive golf.

I had also read some material on the importance of doing aerobic activity for brain health, and although I was squeezing in some runs, I knew that I probably should be doing more. Golf is a sport that I will treasure forever, and I may return someday. However, I am in exceptionally good health for a 50 year man, and I thought that biking, running and swimming would yield better mental and physical health. (Also, I am throwing in a dab of weight lifting to fight sarcopenia.)

So, in the first 22 days of January, I’ve gotten in nine workouts.  Yesterday, I swam my longest swim in probably over a decade.  Then I lifted weights in my not very impressive fashion. Today I ran.

Now when you are 54 years old, all this activity after a long layoff is a bit of a shock to the system.  I am very fortunate that I seem to be in okay health, other than I have some pain in the ball of my left foot. However, I’m coming back from a lot of stress and many years of non-aerobic activity. So from a physical standpoint, once I do a work out, I’m wiped out.  It take mental and physical energy, and once I’m done working out, I just want to come home, get into a comfortable chair, and do stuff on my computer.

However, I am willing to be a little less productive on the weekends, if it gets me into shape and more productive for work.