EP 25: Erich Purpur: What is the "Good Life?"

For four years I’ve watched something slowly bloom. In my old life, the “before time” you might call it, I moved from task to task. If I wasn’t working, I unknowingly made a practice of turning recreational or hobbyist pursuits into something that, from an outsider’s perspective, looked an awful lot like work. Goals and accolades were everything, and the more quantifiable, the better. But the farther I’ve separated myself from this life in space and time, the more clarity I’ve gained. 

Grasping for metaphors, I was tempted to explain this budding awareness as a slowly growing flower. But for perhaps all the wrong reasons, I hesitated to describe my growth and awareness as floral, preferring to drop the metaphor. But I can’t quite shake it, because I have watched something slowly grow. It’s not me that has bloomed–again, all the wrong imagery–but it is the world I could not see then. I could not see the flawed logic buried in the cold and wet earth because I identified with it. It was my life, so I could not reject what protected me. And four years later I’ve watched something slowly take root.

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When we make important decisions, we are often not as rational or objective as we’d like to believe. The base rate fallacy is the tendency to misjudge the probability of a situation by not accounting for all relevant information. This cognitive bias affects everything from first impressions to voting preferences to broad market behavior.

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If you follow economic news at all, you’ve taken note of the changing conditions of the American housing economy in the last few years. First, high demand, low supply, and cheap debt fueled an extraordinary (and unhealthy) price surge. In response, the Federal Reserve ratcheted up interest rates to cool an overheated economy in the wake of pandemic-related disruptions

In years prior, economic conditions supported a vast proliferation of real estate investment. Individual investors to multinational corporations scooped up properties across the country for cheap. The returns were fantastic. But in my mind, those days were decidedly over.

When my guest today, Michael Farnsworth, discussed his novel concept of real estate investment, I was all ears. Do many of the real estate investment rules-of-thumb still function in a world of 7%+ mortgage rates and all-time high prices? Is now really the time to start a real estate investment portfolio? Is this even the time to buy a personal residence? And when it comes to short-term rentals, what are the ethical considerations to local economies and community fabric? We cover all this and more in today’s episode.

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Topics Discussed with Michael Farnsworth

• The “Triangle of Death:” Michael’s unique form of House Hacking
• 2024 climbing goals: 100th first-try 5.12 and V10
• Stock market vs real estate investing
• Michael’s struggle with remote work and feeling grounded
• The characteristics of a real estate investor
• The viability of real estate investing in a high-interest and low-supply (e.g., expensive) market
• Michael’s ongoing landlord nightmare scenario
• Decision to leave his traditional career to pursue property management full-time
• Intellectual stimulation without a traditional job
• Financial metrics and characteristics of the ideal rental property
• Understanding costs and the importance of detailed accounting
• When and how much to raise rents
• Nontraditional means of mortgage funding
• Considerations on property managers
• Ethical considerations of short-term rentals (Airbnb, etc)
• Michael’s ideal lifestyle
• Suffering from lupus and two kidney transplants
• So much more!

We’re back to the digital mailbag to answer your questions!

For this week:

• An update on markets and our personal finance situation
• The role of dividends in growth and withdrawal assumptions
• Expectations vs reality on a life of financial independence
• Our experience with health insurance without employer-sponsored plans
• Real estate investing: an update on our experiences and economics as remote landlords
• Health insurance considerations for long-term travel
• Short- to medium-term savings goals (like a house) versus saving for retirement
• Loss of purpose without a traditional job
• So much more!

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Q1: What’s the latest on markets and your financial situation since you left your corporate career? (00:02:38)

Q2: Expectations versus experiences on the financially independent life (00:16:33)

Q3: Could you provide an update on your experiences and costs with ACA (Obamacare) insurance? (00:27:42)

Q4: I’d like to hear any details you’re willing to share on your remote landlord experience (00:39:36)

Q5: My partner and I are taking a sabbatical! What should we do about insurance? (00:50:30)

Q6: How do I prioritize retirement savings against saving for short- to medium-term savings goals, like buying a house? (00:56:20)

Q7: Why are we so concerned about the loss of purpose when we stop working a traditional job? (01:04:31)

When I left my corporate career in early 2020, I didn’t fully understand the ways that I would, in later years, slowly become decoupled and desynchronized from a society that values hustle, status, and self-worth generated to a large degree around our career titles. You’ll read the same thing repeatedly on the internet: Ignore the haters, do your thing.

But when I actually sit down and talk with those who are living similar lives, regardless of their financial position, I find that the tidy internet talking points leave many of us dissatisfied. After all, humans are one of the most social species on the planet. We shouldn’t be surprised by the difficulty in overriding instinct, to go against the grain of what the herd values most. My thinking has evolved dramatically on this subject in recent years, so let’s dig in.

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By popular demand, I’ve decided to extend a travel series centered around the topic of building community or maintaining our need for social interactions when away from home. Community building is especially complicated when abroad, where cultures and languages vary considerably from our own. My guests today, veteran travelers with considerable expat experiences, are perfectly suited to discuss this topic.

Meghan Walker, a previous guest who writes at awaytofi.com, spent many of her formative years living abroad in Kenya and New Zealand. Her husband, Callan Cooper, is an expat living in the United States from New Zealand, where they met. Meghan and Callan joined me in my home in Colorado for a rare in-person interview, where we discussed in detail the beauty and challenges of international extended travel, careers, evolving travel philosophies, and financial tactics that can have you living a similar life much sooner than you think.

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I’m a little unsure of the best way to frame this introduction. In some ways, this is a story of embracing climbing for all the right reasons. Pursuit of technical mastery and love for the outdoors over the gamification of grades and emphasis on physical training. On the other hand, this is also the story of early adulthood in the modern era. The narrative to pursue something like climbing full-time is strong in the outdoor world. But most I encounter eventually find that climbing alone leaves us yearning for meaning and purpose. My guest today, Tyler Karow, spent nearly three years on the road pursuing climbing. Today he balances considerable climbing achievements with a secondary passion for building and a desire to be a part of the solution to America’s affordable housing crisis.

Karow is a 29-year-old climber known for his big wall accomplishments in Yosemite, Patagonia, and around the globe. His resume includes a ground-up free ascent of Golden Gate (5.13a) on El Cap, and Yosemite’s Triple Crown in under 24 hours, only the eighth time this feat has been achieved. Notably, Karow climbed the Triple while working a full-time (plus) job. He holds a B.S. in Civil Engineering from the University of Southern California and is a licensed civil engineer and general contractor. With this background in engineering and construction, he envisions a career helping to build prefabricated tiny home communities. This emerging approach to construction helps to reduce the cost of new housing and more efficiently add supply to a stressed housing market.

This episode is an Oreo of sorts, with a focused discussion of Tyler’s climbing achievements and work/life balance in the beginning and end. The middle of this discussion takes a deep dive into the affordable housing crisis, the complex nature of new construction, and Tyler’s vision for the future of American affordable housing.

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In October I published a mini episode on my thought processes on the pros and cons of extended travel abroad. Many of you left comments or emailed me your thoughts, and I’m so thankful for your input. You’ve all given me plenty to consider. One of the most insightful emails came from Jeff of awaytofi.com, a previous guest on this podcast (Episode 44). 

Jeff has been living abroad for over fifteen months with his wife, Rose, and as such is well-versed in discussing the impacts of extended travel, particularly on our social lives. This week’s episode is an in-depth exploration of extended travel, especially as it relates to our human need for a sense of place and community. Travel takes us away from our tribe, so how do we create new ones? Do we even need to? You can probably expect more content like this with upcoming guests and articles.

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Uncertainty is a fact of life, yet we yearn for known outcomes. Every day we make decisions. Some decisions are small and inconsequential, while others are profound and life-altering. Sometimes events happen regardless of our decisions. And above it all and looming like a nervous wind is uncertainty. Uncertainty is forever.

But those who learn to sit with and embrace uncertainty are resilient and innovative. Those who try to fight uncertainty spend more money and live with less contentment.

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James McHaffie needs no introduction, at least in the United Kingdom. His approach to bold onsight climbing, particularly free solos, is unparalleled. He’s repeated the hardest sport climb in Wales, Big Bang (9a), sent Britain’s hardest sea cliff, Dave MacLeod’s The Longhope Direct (E10 7a), and made the first ascent of The Meltdown, a 9a slab in the slate quarries of his home in North Wales. And now he’s written a book. But unlike many books released by elite climbers, this is not an autobiographical account of hard climbs in the face of relative adversity. Caff, as he prefers to be called, has written a fictional account of Eleri, a young woman amongst the slate quarries of North Wales who in the aftermath of a family suicide takes aim at British politicians who pushed for austerity and the conditions that led to such suffering. 

This conversation was such a gift. I can see even through all that rage that James is brimming with humanity, a trait sometimes in short supply. I hope you’ll enjoy this one as much as I did.

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Topics Discussed with James McHaffie

• Discovering the Welsh rave scene after a midlife crisis
• Life and climbing in Wales
• Climbing origin story and why James gravitated toward soloing
• The pressure to be bold
• Why James isn’t as well known in the US
• A near-death experience on the Masters Wall and how that affected his confidence
• The concept of modesty and how it has evolved in recent years: “Social media has been a shotgun to the head of modesty”
• The infamous Rab blog and why he wants to separate himself from his “Dark Lord” reputation
• Balancing financial security with elite climbing
• The best job James ever had and why it is important for him to work with the underserved
• Dealing with depression and dark times through his work
• The events that inspired a novel
• A brief political debate and the role of public policy in shaping the lives of the poor
• Details about the novel and his drive to write it
• His 9-month experience writing the book
• What financial security means to James and how he would live with financial freedom
• What James would change to make his life more meaningful in the future
• So much more!