Been Cold and Rainy in the NorthEast
It’s not going to come as much of a surprise to those in the Northeast about my first topic of conversation - it’s been cold, and it’s been wet. 50’s, windy, and a lot of rain. Memorial Day was punctuated by a circling cold front that dropped showers throughout the day. Today, Monday, it appears that maybe we’ve turned the corner into seasonality.
I can tell it’s been raining not so much by an interruption in construction activities, but in my leisure - no community bike rides in 2 weeks (typically Mountain Bike Mondays and Road Ride Thursdays), no pickleball, hard to sneak a walk in, my pool can’t get above 60 degrees, my garden is wilting and yawning for the sun, sweaters still lay about the house, the house heat keeps kicking on.
I’ve said it a few times this weekend, and I don’t know if it’s a sign of getting older, but I keep finding myself repeating - “Glad I’m not camping this weekend”. I get why I’m thinking it: lots of camping on the weekends up here on the Delaware River Valley, and it’s been chilly, and wet, so less than optimal for an activity that can counterintuitively raise the stress levels rather than reach a state of ‘nature calm’ - let’s just take everyone out of their element, give them poor wifi, substandard shelter, damp clothes, and a lot of new skills to learn and have a great weekend. I don’t know why I’m thinking about camping, and the near miss of not camping this weekend, since I don’t really camp. Maybe I’ve camped 20 times in my 40 years of camping age range.
My new project on my property, the pickleball court, is on the home stretch (not to mix sports analogies). Garden is planted, pool is up and running, yard is dethatched and green, garage cleaned out, and the big landscaped bed weeded.
Found this 1972 classic while organizing my garage.
I’ve ruminated before, I don’t think on these pages, but before in my mind, about the unfairness of the tax system when it comes to single earners rather than married filing jointly. Sure, when both adults are working, and the household income is higher because of it, sure, that makes sense to offer a higher level income for certain tax rates and breaks. But there’s lots of situations in modern family life where a single earner has a family, has all the expenses of a household, and the tax code treats them as if life is cheaper as a single, which is hardly the case. In fact, in many situations, spreading the costs of running a household over 1 person is more expensive than for more than one. There are economies of scale to everything from dinner prep to laundry to heating the house.
For instance, I own a home, raise a kid, have 2 cars, a pet, and everything else that one needs to run a household including utilities, insurance, house maintenance, etc..., there’s only one income, I’m not married, and I’m taxed like somehow my life is cheaper to operate than a married couple. Seems to me there should be a caveat in there somewhere - like if only one person works in a married arrangement, why should they get dual income credits? Currently a married household gets a ceiling of $500k for joint filers and a single person $250k. That $250k difference results in $80k more taxes withheld for the single person household.
And similarly for single earners, if they have kids, or own a house, or some other real expense criteria, you should get the lower tax rates (or more accurately, higher income level ceilings). It should be less about your marriage status, and more about your life obligations - like does your mortgage, real estate taxes, child/support and alimony, and perhaps a few other inputs add up to a certain percentage, and if so, you get a higher ceiling. I already see a few flaws in my plan, but the tax code is complicated so I’m sure they could figure it out. Also seems unfair that high costs states and areas get the same federal ceilings as low cost states, since it’s hardly unfair to argue that $200k in Kansas is a lot different than $200k in Boston. Seems unfair that single-earner households - arguably operating on less stable footings than a dual income family since any inability of the single earner immediately threatens the whole structure -seems unfair at the assumption that running a life as a single person is 50% cheaper than as a married couple. Though who knows - maybe when the idea was introduced, it was thought to be a motivator to get married?
Our house we are building in Parksville.
The SALT tax debate at the federal level has been interesting to watch, as Mid-Atlantic states, particularly NJ, NY, CT and MA, dig in to restore a higher deductibility of state and local taxes from federal tax obligations. With real estate tax bills easily reaching $20k or a lot more in many places, the limit of $10,000 passed in 2017 was a real and true financial blow to many families. Sure, many could afford it, but many affluent families live far beyond their means, so a new $10k, 20k, $50k tax can be a big deal. $45k in real estate taxes deducted off your fed return - here’s the math - $45k deduction, 37% tax bracket - was a real $20k tax savings, but at $10k cap, is now a $4k tax savings. A $16k out of pocket swing. Chump change to some, a real hit to others as that amount is 2 car payments, 50% of room and board, the cost of raising a kid for a year. So anyways, they are holding up the big beautiful spending bill because of this issue, and I’m really not surprised - it was a big deal when it was passed, and it’s a big deal now.
New long overdue railing heading down to the pool -
Turns out for ‘pass-thru entity’ people - those with C corps, S corps, LLC’s etc - the law in 2017 introduced a lot of changes, but when push came to shove, there were new loopholes -intentional or not no one really knows - that resulted in my tax bill (nearing 40-45% for the majority of my income) more or less the same - calculated a lot different with credits and debits being pulled from new places, but in the end, about the same owed. The same can’t be said for W2 workers, or those without the flexibility of business deductions - the W2 workers, as always the case, have nowhere to hide from tax code changes.
It’s been raining but we keep cooking along, with 4 homes under construction and moving at a quick pace. Being less busy, and being highly skilled at my job, I’ve found my tangible effectiveness notching upwards - I mean, I’m always pretty effective, but when you are drinking through the fire hose of productivity challenges cause you are building a dozen houses at a time, the effectiveness gets watered down if only because there are more problems to solve, your time to solve them remains the same, so your effort and attention per problem is reduced. Allowing time to zero in and dedicate the time to each, leveraging a lot of knowledge and experience, makes most problem fixes a lot more certain.
A few examples of sticky situations that only good and effective strategy and communications can counter - Alps Airbnb host trying to charge us $2k for a cracked picture window, local electric company asking me to come 2 miles for electric service rather than tapping the transformer 200 yards away, a few employment related matters were resolved in my favor, a successful appeal of the assessment levels of my homes in Fremont NY saving my families up there a bunch of money on their annual taxes (as well as preserving their resale levels since every dollar in annual real estate taxes is a blow to the ultimate value of a home), - there were a bunch more but I can’t think of them. I think one thing that is happening for sure is I’m just walking away, or quickly resolving, tasks and situations that may have principle at stake, but not business advantage. Letting some of that go can save a lot of mental resources and have the time there just really is no point to chasing the principle - to prove what, to whom, exactly?
I handed out (10) $1250 scholarships for Delaware Valley High School seniors for a scholarship I titled EZ Money - A financial literacy seminar. They had to apply, they had to write an essay and they had to attend a 2 hour seminar I led, which I used up most of my time talking about debt, and how to avoid it. And next Wednesday I present the funds at scholarship night. We had 21 applicants for 10 slots, which the scholarship coordinator at the school thought was pretty awesome especially since of all the strings attached to the award. To me, it speaks to the thirst for real financial guidance that people just don't have access to.
Resales, and the French
It’s a rare Catskill Farms resale property that doesn’t sell quickly, and for full price. The most recent example is a house we designed and built outside Narrowsburg NY overlooking the Delaware River. This modern Ranch, one that I dreamed up to mirror the shape of the bend in the Delaware River it overlooks, is one of the most unique homes in SuCo, if not the Hudson Valley. And priced at $1.5m, with a new studio/garage; a fairer price could not be had for this.
The only reason it is selling for $1.5m instead of $2.9m is because of the affordability of our builds, the vertical integration of our efforts, the efficiency of our program. I think they have less than a million invested in this property, which is just an absurdity on the face of it.
One reason we always live to fight another day is because we are always offering value, which we can do because I know my business and the markets about as well as someone can know these things, learned through lots of effort, lots of study, lots of curiosity and lots of sometimes costly experimentation.
Over and over and over for decades we have built homes, sold homes, had those homes resold, and repeated to the benefit of a wide range of Sullivan County businesses. Needle-moving impacts. Our aggregate macro and micro economic impacts are gigantic and game-changing, not just for the people who reside in the homes, but for the communities in which these homes exist.
I was thinking about the French, and our recent trip to the Alps, and I was remembering the 3 different run-ins I had with some French men - 1, in the cafeteria on top of one of the ski mountains where I was getting some cheese and bread and olives and waiting in line to pay, and someone’s shouting about something but because I don’t speak french I’m not paying much mind but then I realize it’s directed at me and it’s because my plate needs to be weighed to be priced right. Now I was definitely in the inadvertent wrong - frankly never occurred to me - but the cost of a mozzarella stick I’m not sure rose to the level his voice inferred.
The 2nd was on the slopes, when a guy in front of me - and we weren’t going fast, sort of cut me off at low speeds - at the edge of a run, where I was out of horizontal space, and our skis tangle just minorly and I believe he might have quickly fallen and popped right back up, and come up fighting and yelling and pushed me to the ground. I was in the Alps, and I was a bit shocked, so I didn’t have much of a reaction even to the push, but he certainly thought it was the end of the world.
And 3rd, at our ski slope condo, a large picture window had a crack in it, when we arrived, which you just assume everyone knows about, but I guess he didn’t and tried to blame us for it to the tune of nearly $2000. One, it sucks to be blamed for something you didn’t do - it happens all the time in construction where someone you can’t identify did something, and you can either go around blaming everyone, or just eat the cost and preserve the team. This was especially obnoxious because just by accident I snapped a time stamped photo at 5:34pm of the mountain views and that picture happened to capture the crack coincidentally. We had only checked in at 5:15pm - so I get the guy can suspect us since he clearly missed the defect (or more likely, the cleaning company didn’t report it, or actually did it), but with that tight window - we arrive, literally immediately crack the window, and take a picture to prove it was already there - but with that tight window, any self-respecting host has to admit that’s a pretty tight timeline for us to be working under, like the unlikely 3 shots from Oswald’s rifle. Anyway, AirBnb rejected his demand for money after an investigation.
United was responsible for a delayed bag, which forced my wingman Eli to buy head to toe ski gear on the slopes of a famous resort, which I can’t imagine there is a more expensive way to buy ski gear. $1800 of ski jackets, pants, long john, etc…., which United reimbursed with a pretty straight-forward process. I guess maybe first class passengers get better treatment, but even still it was amazingly efficient, communicative and in the end, took full responsibility.
So, I was facing literally $3500 of extra charges, but needled my way through them at no cost.
I’m sort of winning on all these types of fronts these days, with lots of bandwidth to evaluate problems, deploy actions or communications, and swagger towards successful resolution. You can’t do that when you got too much on your plate and don’t have the mature support around you. It’s frankly just too much to ask of even a veteran business-owner. I think it’s a measure of the successful recalibration I’m seeking, that sweet spot of busy - enough to be profitable, not too much to be harried and chained to the stress.
Monday, the little Ranch sells, in Narrowsburg, and that finishes off a 3 house project on Wood Oak Drive. I bought those lots when they came on the market, and my only demand was that I get all 3, even if I have to pay a little more to make it happen, because few people care more about the impact on neighbors than I do, especially if they are my home, but generally also. I've seen so many poorly planned homes that negatively impact, sometimes to a big degree, the peace and value of a neighboring property. Many times, just some consideration, knowledge and spending a little money would have prevented the whole drama.
PanAmerican road trip being planned.
Alps, veni vidi vici
Well, The Alps came and went. We arrived with a gamble that the end of season - literally, the end - would provide sufficient snow cover for a worthwhile ski getaway for me, my 27 yr old nephew and his 30 yr old brother. From our 4th floor, 3 bedroom ‘penthouse’ a few kilometers up hill from Meribel Center, we could survey the mostly snowless trails in the Meribel Valley.
The Three Valleys (Tre Valles) is the largest ski area in the world, combining 3 resorts/mountains, into one, navigable by crossing the peaks from one to another - Courchevel, Meribel, and Val Thorens. With parts of Val Thorens sitting at over 3000 kilometers, even late in the season the mountain provides plenty of skiable surface. From what I read, this April was at 62% of normal snow cover, so while it was still skiable, it was certainly the end of the season with many trails and lifts closed (still plenty open) and a lot of stores and restaurants shut for the season.
The temperatures were into the 40 and 50’s. I learned a trick about converting Celsius - take the celsius number, double it, and add 30 and that’s approximately the Fahrenheit temp. Problem is that doesn’t work for negative numbers right - like -2 Celsius is what? How do you double -2? I’d have to ask my son, though turns out he’s not in competition for any math awards so it’s hard to see how asking him would help.
The 3 Valleys, just about exactly 2 hours outside of Geneva on the French side, was clear the season was ending. Without significant snow fall for a month, the wind down, close out efforts of the stores that remained open were phoning it in at best. The working transients that serve in the Alps in the winter and migrate to the Riveria in the Summer was on the minds of many.
Then came, pretty much without warning, the largest storm of the year, dropping 3’-6’ of snow throughout the Alps, transforming spring back to winter, and even the large groundhog like marmots seemed like wtf after they burrowed their way up and out of the snow cover. There was this group of three that hung out in the sun under a lift for the longest while, trying to get their game plan in place.
This is the type of storm that closed down ski resorts, with an end of season lack of staff, lack of supplies, lack of energy. I guess it was a world-wide story first for the snow and then for the 5 of 5 avalanche risk that closed the resorts the first day post storm, and had the high peaks and valley to valley crossing closed the 2nd day. In other parts of the Alps, like Zermet, they are still digging out and I’m not sure any skiing was had since there was widespread electrical outages, road closures and even bridge collapses. But in our isolated valley we were skiing the day after in bright blue skies, warm temps and soft snow. It just snowed and snowed and snowed. And then there was a quick window of perfect skiing before the long sunny days turned the new snow into rapidly thinning sticky mush.
I ended up getting a high altitude high alcohol good beer buzz for the first time since April 2023 at an apres ski slope side party that I skied into after an exhilarating day on the slopes. The sun was too warm, the vibe too good, the beer too strong. End of season moment. Tip - it’s hard to ski when intoxicated. Luckily I didn’t have far to go, and luckily when intoxicated, you don’t care too much about how long it takes or the trouble getting there.
This season the skiing took me to Killington VT, Steamboat Springs CO and the 3 Valleys in the France. That’s about double what I typically do in a year, and with the runs being so long in France, the total skied must easily exceed my yearly average, and I think the results were starting to show in my abilities. One nice thing about skiing is that you build from year to year, like riding a bike or something similar, not like golf where any pause results in immediate regression. I guess otherwise skiing really wouldn’t be a thing for most people since they don’t go a whole lot - a few times a year.
Well, that wraps up a lot of travel over the last 6 months, starting with Costa Rica in November, St Petes over New Years, Killington, Steamboat and now France. And France last June, and Costa Rica last April. And the Vanderbilt Mansion in Asheville NC last Christmas. Dozen trips to NYC, one to Martha’s Vineyard, and that’s without really even thinking about it too hard.
Back on the home front, the new team crushed it and we are calibrated exactly right in talent and workload to have a terrific year from a few different vantages. I’m hoping the availability of land starts to straighten out because while it was a good thing to force me to personally slow it down, I do need access to land to keep the ship moving, even at slower speeds. I feel like I’m on the tip of the bow, looking out over the ocean, trying to spot the wave to ride or avoid.
I spent some time on the free of business operational details and it got me thinking about what a crazy trip the last 5 years has been, and that I sailed through quite the storm, and anyone along for the ride - employee, client, family - benefited from my efforts, sometimes in the most extreme and personal fashion. That’s the joy of small business - you can make an impact on lives, and with building shelter in particular, you really can make a long and lasting impact. My homes will be here a lot longer than I will be.
I watched the Bob Dylan movie on the way to France and Hangover 1 on the way home.
My nephew and I binged White Lotus, Season 3 on our off days, and that was fun. I definitely had a crush on Mook until I realized how famous and hot she is and totally out of my league (for now).
Alps, lost luggage and White Lotus
I just read an interesting Wall Street Journal article eviscerating Prez Trump in the smartest way on really every front. And then you page over to Fox News and find a universe of news and perspective positioning him as a tough effective leader. These two voices are owned by the same conglomerate, so to reconcile their goals is impossible. I guess you could say Murdoch wants it both ways - he wants to be on the record as evaluating the man correctly (WSJ) and also wants to continue his profitable propaganda machine (Fox News and related personalities). The recent news about Rupert Murdoch - (other than his 5th marriage) - was he was trying to change up his irrevocable trust and reduce the influence and ownership shares of some of this children.
Why this was interesting is because I’m a student of trusts, having a living trust myself where all my assets live (other than high liability autos). Trusts are common tools/vehicles, and you don’t need to be uber-wealthy to benefit from them. Trusts are helpful in organizing assets and instructing heirs on what, when and how you’d like your estate administered after you head off to the bright light, and it can be done in more detail than a will, and also keeps the details of the details out of the courts and the public record.
A living trust is controlled by the person who owns the trust during their living years, and can be changed, amended, altered etc… as often and as drastically as events dictate - new wife, new child, new business, new rules of money distribution. A living trust doesn’t really come with any inherent estate or tax benefits. It’s an organization tool; a tool to protect assets.
An irrevocable trust, however, is just the opposite, and comes with a host of tax and estate benefits, with one serious caveat: you literally give up control of any asset the trust holds. So Murdoch has his Fox and related entities in an irrevocable trust, and has assigned inheritance details to his children and others in this trust, and, by the very nature of the irrevocable trust, he doesn’t have the ability or authority to change it, in exchange for whatever benefits this type of trust offers.
He’s engaged in a legal process attempting to open the trust up for him to change the details and structure of it, and is being opposed by several of his children. There are a few very esoteric ways you allowed to get back into the machinery of an irrevocable trust, and I think one of them is if the business or asset is a real threat of being materially devalued and the only person with the skill set to preserve it is the person who gave the keys away - or perhaps the argument goes that the current structure poses substantial and real risk of devaluing the value of the asset.
So Murdoch was in court arguing the current structure, that all his children (not sure how many there are but there are at least 3 primary) receive equal shares, is a threat to Fox News because at least two of this children have shown a disinclination to pursue his news programming that has set the US on a course of disintegration, and that their influence, and moderation of Fox programming threatens its very survival and value. It’s actually a really interesting and possible correct view of things - the court turned him down, and he wasn’t allowed to reopen the Trust but that is more a comment on how iron-clad these trusts can be, not on his perceptive insights on the trajectory of Fox News if made more moderate by his off-spring. Murdoch is 95 years old, so this change of direction may be closer than it seems, which would be good for US, but only open the way for some other organization (NewsMax) to fill the propaganda void.
I’m in Meribel, with my wingman Eli. Day 4. We are still waiting on his luggage, which was never really lost in the technical way since we and United have always been able to see where it was (first in Newark, then in Geneva, then in the delivery company’s hands), we just don’t have it yet. And considering we are skiing, there’s a lot more than toiletries than we need in that bag. So that’s been a bit stressful, mostly because the information we’ve been given (after long wait times) has been wrong, or misleading. In the end, the correct information and guidance and expectation-setting seems quite clear - ‘we have your bag, and you expect it within 48-72 hours, and you can’t track it in the meantime, and we will call you 90 minutes before it arrives so don’t go anywhere!”)
So Saturday, we cooled it in the flashy condo with Alp views, and binged watched 6 episodes of The White Lotus waiting for the luggage, but by Sunday we needed to go to the slopes, and so we then binged bought at a slope side French alps ski store for a ski jacket, ski bibs, helmet, googles, long underwear, etc…. And for you non-skiers, ski shits expensive, and buying ski ship slope side in a fancy ski resort town is about the most expensive way to buy, so 1800 EU later, Eli my nephew was looking about as good as he is ever going to look in some new ski stuff. Rumor has it United will reimburse us for a lot of this (in Europe for some reason the limit is 1400 EU while everywhere else it’s higher), so we will see. We literally are hours away from a big town, and really didn’t have the luxury of time, so there wasn’t a lot of bargain shopping options. From what I’ve been reading, it seems quite possible we will be reimbursed if we follow the process and keep our receipts, which we have been doing. A shorter ski trip - like the ones I take in the States - would have been a lot more disrupted by this type of lost baggage. Seems like the lesson here is pack a carry on, always, with the trips essentials.
We finished Season 3 of The White Lotus, and enjoyed it thoroughly. Lots, if not all, of the story lines tied up nicely and satisfactorily at the conclusion. I think everyone is relieved Lochlan was revived and survived the poisoning. I think the Schwartzenegger kid did a great job and was perfectly cast, though you can’t help but assume the benefits of having that name on the cast wasn’t lost on the producer.
It’s Monday morning in the Alps and I’m drinking a sacrilegious cup of instant coffee. The season is a week away from being over, so it’s an interesting time to be here, with the ski shops embarked on a campaign of boot cleaning, ski maintenance and closed for longer lunch times (12:30-3:30!). Which reminds me of the final kick in the cojenes lost luggage part of the story : we finally get the call yesterday that they want to deliver the luggage and they will be arriving in an hour and a half. This is a huge ski place with 3 valleys and mountains connected so weren’t going to be able to get back in an hour so we call the ski shop next door and ask if they will accept the luggage, and they say sure - however, the luggage is set to arrive at 1, and they close FOR 3 HOURS FOR LUNCH EVERYDAY. OMG, the French, gotta love them.
