Busy at work but took Sunday off to watch Arrival. I started the film thinking this is like Space Odyssey and finished thinking this is as anti as can be.

In my interpretation of Space Odyssey, the monolith represents human nature, which is beyond good and evil. Is using a bone as a weapon to drive rivals away from the water hole good or evil? Neither because it is human to want to ensure our own survival.

In Arrival, monolith x 12 is here to unify humanity. Personally, I think things worked out because the aliens worked with 12 nations independently. If they only sent one monolith, they would not have had the opportunity to test 12 different approaches. Yes, different people doing different things will create conflict and conflict will create winners and losers at least in the short term. In the longer term, the rival ape men might find a bigger water hole elsewhere.

In terms of cinematography, I loved every moment of Arrival. So I’m sort of hoping that I misunderstood the message and the film is not suggesting that we all unify around THE RIGHT ANSWER. Otherwise, I think Arrival represents everything that is wrong with the world. When people try too hard to grasp the truth, they find themselves bound by narratives created by others.

how do you make lemonade if you can’t see the lemons?

img src=superhealthykids

When I started my current job, at the end of each round, I would make a list of things that might happen in the next round. This year, I worked on eight different deals and somehow lost this habit. Not surprisingly, I ended up with more surprises. Next year, gotta do this consistently because how do you make lemonade if you can’t see the lemons?

Mr. Turner & my new goal in life: once more with feeling

img src=aline-diepois-thomas-gizolme

If someone had asked me for a declaration of life goals ten years ago when I graduated from university, I probably would have said something like this.

One. Find Nietzsche.

Two. Scoot around Rome or some other romantic European city.

Three. Hike Zermatt to Charmonix.

So … ten years later … am I getting closer to these goals?

One. I don’t actually pick jobs to increases my chances of finding Nietzsche but somehow it worked out that way. As soon as I joined Milliman, I started asking people for book recommendations and was given the suggestion of Dynamic Hedging: Managing Vanilla and Exotic Options which I loved which led me to read other Taleb books. He does an amazing job explaining Nietzsche. But more than that, experiencing the 2008 financial crisis made me realize my work should not be about trying to control chaos but trying to benefit from chaos. Then, in 2012, I actually found Nietzsche. In conclusion, I’m giving myself a rating of “so far so good”. Although a part of me thinks that I’ve actually never really truly confronted the chaotic. Hard to say whether I really get it until that happens.

Two. I still don’t have a driver’s license. But it’s okay because, in 2010, I realized that I actually enjoy riding a bike up and down hills. And nothing is more romantic than realizing that a flood has covered the original route and a new one must be found.

Gazing at Les Baux-de-Provence
a.k.a. taking a break after realizing that I’m not there yet

Three. I’ve visited neither Zermatt nor Charmonix let alone hike from one to the other. The picture at the top comes from a series of photos entitled Abstract Zermatt. The project is described as follows: Les images échappent alors à la photographie de paysage et participent d’une démarche picturale basée sur l’impression, la sensation et le souvenir, la trace et la disparition.

A pictorial approach based on feeling, sensation and memory, trace and disappearance is a great way to describe Turner. It’s way too early to say what my favorite film of 2015 will be but Mr. Turner had quite an effect on me. Looking at the man’s life from the outside shows the opposite of beauty. He is a strange looking fellow. His is estranged from his ex and children. His communication style is baffling. At the beginning of the film, when he sings (not so well) and brings tears to the woman playing the piano, I was like … I don’t understand why this is so moving. At the end of the film, as he lies there dying, I found myself thinking … he is so wonderful … don’t let him go. And I can’t even pinpoint exactly what happens between the beginning and the end that makes me so attached to this character.

To be honest, when I saw the preview for this film in November, I was a bit shocked. I always imagined Turner to be a most interesting person and here we have a character who mostly grunts. But on second thought, art is not defined by whether the artist has an interesting life. Art is not even defined by whether the subject matter is interesting. In fact, one could argue that art is about seeing supposedly uninteresting things in an interesting manner. And what does it mean to have an interesting life anyway?

Once upon a time, I was convinced that life is about doing interesting things like hiking from Zermatt to Chamonix. And meeting interesting people. And by interesting people, I mean people who want to do interesting things with me. Now I realize that this is a dangerous way of thinking. Walking through life with preconceived notions of what is interesting can make us blind to the things that are unexpectedly interesting. And the unexpectedly interesting is the key to chaos.

If someone asks me for a declaration of life goals today, should I say encounter the unexpectedly interesting? Or find the key to chaos? Do such goals even make sense? Probably the best goal I can set is the one my piano teacher gave me long ago: once more with feeling.

The 3rd Five-Year Plan – A Report Card

In the fall of 2012, I started drafting the 3rd Five-Year Plan. Two years later, time for a report card. Because updating the Five-Year Plan together is even more romantic than a good coffee date.

1. When to Have Kids

Even though we haven’t done anything, I’m going to give us B because, we agreed that, before we start, we need to get married and he need to change jobs. Since he started his new job and we got married this summer, I think B is well-deserved.

2. When to Buy Real Estate

Two years ago, I said I would be open to investing more in real estate after I pay off my mortgage. Now I have paid off my mortgage but residential real estate valuation in Toronto scares me.

Since neither of us enjoy shopping and he doesn’t even care for traveling all that much, I’m pretty sure we can live comfortably on 50k per year after we retire. I’m using 2003 dollars because that’s when I made the 1st Five-Year Plan. In 2014 dollars, it’s 60k per year.

We can retire comfortably on 2mm since 2mm x 3% distribution rate x (1 – 20% tax rate) = 50k. Given 2mm net worth, how much exposure to the home would I be comfortable with? I would say 600k. The tail scenario that I use is that the home loses 1/3 of the value, so net worth would be down by 200k (i.e. 10%). In 2014 dollars, the most I would spend on the home is 750k. Am I being too conservative?

If I look at the top 20 percent in the US, average household net worth is close to 2mm. Average investment in the home is less than 400k.

Wealth, Income, and Power by G. William Domhoff

Wealth or income class Mean household income Mean household net worth Mean household financial (non-home) wealth
Top 1 percent $1,318,200 $16,439,400 $15,171,600
Top 20 percent $226,200 $2,061,600 $1,719,800
60th-80th percentile $72,000 $216,900 $100,700
40th-60th percentile $41,700 $61,000 $12,200
Bottom 40 percent $17,300 -$10,600 -$14,800

Toronto’s average detached home price closes in on $1-million! Who are all these Toronto people buying million dollar homes? Do they all think they will end up in the top 1% with net worth above 10mm? If not, how did they get comfortable with putting most of their net worth in a single asset?

We do not know the answers to these questions but we both agree that it does not make sense to invest more in real estate right now. I’m giving us A for happily putting money into GIC’s.

1997 to 2014

Spring 1997: Vendy’s family moves to Toronto and buys house; not sure if my parents actually did any financial analysis but sure seems to be a great decision in retrospect

Spring 2007: Even though I thought the market was heading towards a correction, I didn’t want my bonus sitting in GIC’s and invested in mutual funds; D’oh!

Summer 2010: Borrowed money from bank to buy condo since I was not about to sell mutual funds that just lost 1/3 of their value

Summer 2014: Sold mutual funds and achieved acceptable return relative to the price I bought them at in 2007; maybe we do get wiser as we get older because I’m not nearly as anxious about having money sitting in GIC’s; will revisit if prices drop below the dotted line