Meet AaronRiskalyzeSierra CollegeZiway + Adami Tulu ProjectContact

CEO at Riskalyze. Sierra College Trustee. Adoption + Orphan Advocate.


I do not fly 322 days of the year, but this is still one of my favorite movie scenes because I do this often enough. #UpInTheAir

History Tells the Story

Balaji Srinivasan recounted a powerful story on Twitter, reminding us why collectivism not only doesn’t work, but sentences people to the poverty of mediocrity.

It’s All About Priorities

One of the very smart people we have in our industry is a friend by the name of Michael Kitces, an advisor, financial planner, blogger and speaker extraordinaire based out of the DC area.

Today, he tweeted one of his old blog posts about savings, which led to a great Twitter conversation that expanded to involve another very smart person, my pal Brian McLaughlin, who is CEO at Redtail Technology.

Michael boiled down his post to a tweet: “Controlling your long-term SPENDING is what matters. Savings is an outcome.”

And I have to say, even though I agree with Michael far more than I disagree with him, this was one of the times that I fundamentally disagreed.

To make my point, I’ll digress for a quick moment and zoom up to the 30,000 foot view of investing. Some of the smartest and best-intentioned folks in our industry tell average investors “stop thinking you’re smarter than the market! Quit watching CNBC! Quit making decisions to buy or sell based on what your statement says!”

Fundamentally, that advice is headed in the right direction. After all, if you invested at the worst possible time — the market high pre-2008 — and then capitulated and sold in early 2009 near the bottom, you lost half your money. Many, many people succumbed to fear and did just that.

On the other hand, if you invested at the worst possible time and simply did nothing as the greatest market crash since the 1930s happened, you’d be up 50% today — an annual return of 8.3%.

But here’s the problem. Human behavior does not lend itself to putting one’s head in the sand. We are wired to be alert to danger and take action to protect ourselves. In fact, the data shows that we are 2.5x more averse to losing what we already have than not gaining what we could have gained.

One of our core philosophies at Riskalyze is not to reject the reality of human behavior, but to empower advisors to help their clients thrive by harnessing human behavior. When you help a client capture their Risk Number, and build a portfolio they can stick with during normal downturns, they are far better prepared to trust their advisor when the big downturn comes.

Now, how does this apply to savings?

One of the best things we can do as humans is harness our natural tendencies to spend 100% of what we have. And we do that by playing a very simple trick on ourselves: hiding the money we need to save.

Do yourself a favor, jump into your online banking and set up a recurring transfer to savings that happens on the same day your paycheck deposits. You can make it for as little as $25. Wait for a couple of months and see if you actually notice that you have less money. Trust me: you won’t.

I do this transfer to my IRA, but you can use another savings account too. If you’re smart, you might even do it at another bank so you can’t even “see” the money in your online banking and it’s not quite as easy to transfer it right back.

When your next raise arrives, figure out the post-tax increase and steal a good chunk of it to boost your savings transfer. Or just set a reminder to escalate your transfer by $25 every month, and ease into it.

Either way, you’re tricking yourself into saving. Human behavior will drive you to splurge — a Starbucks here, an Uber there, an extra movie here or there. You will definitely continue to be likely to spend 100% of what you make. And yet, you’ll be accomplishing your savings goals at the same time!

Now, let me say: if you’re someone who struggles with spending 110% or 120% or 130% of what you make right now, you have a different problem. Making saving your first priority will not solve an overspending problem.

But these are two separate issues. You cannot solve an overspending problem by moving saving to the end of your priority list. You solve an overspending problem by choosing to live within your means. (More income can help, but chronic overspenders know it’s not a silver bullet).

Ultimately, that’s why I differ with my friend Michael and his idea that savings is an “outcome” of spending. Making savings the bottom part of the equation is the choice millions of Americans are making today and that’s why we have a low-to-negative savings rate at any given point.

Life is all about choices and priorities. Harness human behavior by saving first and spending 100% of what is left, and you’ll end up in far better shape than putting savings last in your financial equation.

Hire Carefully, Fire When You Know Otherwise

I’ve been collecting business adages that most people think are true, but are actually patently false. “The customer is always right” and “don’t bring me a problem, bring me a solution” are two of my favorites — they are just totally, completely wrong.

Another is “hire slow, fire fast.” It’s neither realistic nor correct for a tech company trying to take on the world. And we haven’t followed it.

The correct formulation for that adage might be “hire carefully, fire as soon as you know otherwise.”

Yesterday I tweeted that “there are many parts of my job that I love, but in truth, a few of them totally suck.” I know I’m usually a cheery optimist on Twitter, but it was truly how I felt at the end of a hard day when I had to use the second half of that adage.

I won’t share my diagnosis of the problem, largely because the person involved is a genuinely good person, with serious talents and a great career ahead of him. He will be a great asset to the right company.

But three things have to come together for a hire to work: it has to be a fit for that person, for that company, at that time.

When you figure out that’s not the case, I believe you owe it to your team and to that individual to move quickly and make a change. These things are not like fine wine — they do not improve with age.

On the one hand, if you let it ride and avoid the hard discussion, your team starts wondering if you’re blind. “Does he not see that this isn’t working? Or does he just not want to admit that he made a mistake?”

And on the other hand, it is far worse for that individual to get deeply invested and committed into a job that isn’t the right fit and they won’t thrive in. Especially when there is so much raw talent that you can see.

So when you know otherwise, that’s when it’s time to move quickly.

That was the source of my tough day. Not the end of the world. 96.1% of our hiring decisions have turned out right so far. We’re going to get some wrong, because we have to move fast even though we hire carefully.

And that means that I’ll have more days like yesterday. This is the price you have to pay for having the greatest job in the world. I wouldn’t trade it for anything.

In well run organizations, people can focus on their work (as opposed to politics and bureaucratic procedures) and have confidence that if they get their work done, good things will happen both for the company and for them personally.

By contrast, in a poorly run organization, people spend much of their time fighting organizational boundaries and broken processes.

—Ben Horowitz, The Hard Thing About Hard Things

There’s just a tremendous amount of craftsmanship in between a great idea and a great product. And as you evolve that great idea, it changes and grows. It never comes out like it starts because you learn a lot more as you get into the subtleties of it. And you also find there are tremendous tradeoffs that you have to make. There are just certain things you can’t make electrons do. There are certain things you can’t make plastic do. Or glass do. Or factories do. Or robots do.

Designing a product is keeping five thousand things in your brain and fitting them all together in new and different ways to get what you want. And every day you discover something new that is a new problem or a new opportunity to fit these things together a little differently.

—Steve Jobs

You’re thinking about that gift you need to give to your child’s teacher. Or that family member. Or your dad who has everything.
Here’s an opportunity to give them a gift of meaning that will make them smile…guaranteed.
For every $20 you donate in their honor to our school project in Ethiopia, we’ll send you this beautiful hand-crafted card that you can give them to let them know that a child in Ethiopia received the gift of education in their name.
And remember…100% of your donation goes to the field. Not a penny is held back for US administrators.
Click here to get your gift cards on the way today!

You’re thinking about that gift you need to give to your child’s teacher. Or that family member. Or your dad who has everything.

Here’s an opportunity to give them a gift of meaning that will make them smile…guaranteed.

For every $20 you donate in their honor to our school project in Ethiopia, we’ll send you this beautiful hand-crafted card that you can give them to let them know that a child in Ethiopia received the gift of education in their name.

And remember…100% of your donation goes to the field. Not a penny is held back for US administrators.

Click here to get your gift cards on the way today!

It’s been a few weeks since I returned from Ethiopia, and I know many of you have been wondering about the next phase of growth for our school project there.
Today, we’re excited to launch the fundraising for that next phase of expansion. These three school campuses have grown to 970 students. We have the Ziway schools built out to Eighth Grade, and the Adami Tulu school built out to Fourth Grade.
Our vision for these schools is to build a transformation factory that can produce 140 new leaders every year — business leaders, political leaders, government leaders, spiritual leaders and family leaders — who can transform Ethiopia and Africa from the inside out. Because that transformation will never occur via foreign aid to governments. It will happen when people are equipped to change their own country.
So the next step is Ziway High School. After all, the Class of 2017 is just a few years away!
We have preliminary estimates for the high school construction, which includes classrooms, labs for chemistry, biology, physics and computer science, a library, athletic fields, cafeteria, faculty offices and the necessary safety fences around the facility. All told, the Ziway High School should cost $745,000 or less to secure the land, build the buildings and equip them for instruction.
That’s right — an entire high school for $745,000. It takes tens of millions to do something like that here in the US!
It’s entirely possible that number might shrink as we go. In fact, during our last construction project, which many of you were so generous to donate to, we ended up deciding not to build the building for staff housing and administrative offices. It turned out we didn’t need it, so we saved that cost instead.
So the exciting news is that we get to apply that extra $100,000 to the high school project. In addition, other donors connected with the on-ground administrators have already stepped up to cover $150,000. So that leaves our team with a fundraising goal of $495,000.
Our goal between now and December 31 is to raise $250,000 of that. That will allow us to begin breaking ground as soon as January or February. Next year, we’ll work to raise the other half, which probably needs to be concluded by the end of 2014.
Plan “A” is to open a small part of the high school in Fall 2014 just to house our first class of ninth graders. (Don’t worry, we have a Plan B, C, D and so on.) It will take about a year to construct the entire high school campus and we expect to open the campus more broadly to ninth and tenth graders in the Fall of 2015.
When I look in the faces of these smiling future leaders, I’m filled with hope for the future of a renewed and transformed Africa. Where governments serve their people. Where disease and poverty are the exception, not the rule. Where every child is a wanted child, and the orphanages are empty.
We can do it. Will you help us get this campaign kick-started with a gift of $25 or $50?

It’s been a few weeks since I returned from Ethiopia, and I know many of you have been wondering about the next phase of growth for our school project there.

Today, we’re excited to launch the fundraising for that next phase of expansion. These three school campuses have grown to 970 students. We have the Ziway schools built out to Eighth Grade, and the Adami Tulu school built out to Fourth Grade.

Our vision for these schools is to build a transformation factory that can produce 140 new leaders every year — business leaders, political leaders, government leaders, spiritual leaders and family leaders — who can transform Ethiopia and Africa from the inside out. Because that transformation will never occur via foreign aid to governments. It will happen when people are equipped to change their own country.

So the next step is Ziway High School. After all, the Class of 2017 is just a few years away!

We have preliminary estimates for the high school construction, which includes classrooms, labs for chemistry, biology, physics and computer science, a library, athletic fields, cafeteria, faculty offices and the necessary safety fences around the facility. All told, the Ziway High School should cost $745,000 or less to secure the land, build the buildings and equip them for instruction.

That’s right — an entire high school for $745,000. It takes tens of millions to do something like that here in the US!

It’s entirely possible that number might shrink as we go. In fact, during our last construction project, which many of you were so generous to donate to, we ended up deciding not to build the building for staff housing and administrative offices. It turned out we didn’t need it, so we saved that cost instead.

So the exciting news is that we get to apply that extra $100,000 to the high school project. In addition, other donors connected with the on-ground administrators have already stepped up to cover $150,000. So that leaves our team with a fundraising goal of $495,000.

Our goal between now and December 31 is to raise $250,000 of that. That will allow us to begin breaking ground as soon as January or February. Next year, we’ll work to raise the other half, which probably needs to be concluded by the end of 2014.

Plan “A” is to open a small part of the high school in Fall 2014 just to house our first class of ninth graders. (Don’t worry, we have a Plan B, C, D and so on.) It will take about a year to construct the entire high school campus and we expect to open the campus more broadly to ninth and tenth graders in the Fall of 2015.

When I look in the faces of these smiling future leaders, I’m filled with hope for the future of a renewed and transformed Africa. Where governments serve their people. Where disease and poverty are the exception, not the rule. Where every child is a wanted child, and the orphanages are empty.

We can do it. Will you help us get this campaign kick-started with a gift of $25 or $50?

For those of you who donated to the Both Hands project a few weeks back, a big thank you! We rehabilitated an older modular building to create some office and meeting room space for the folks at Acres of Hope, a shelter for at-risk women.

All of the materials were donated, so 100% of your sponsorship — totaling $1,750! — went to the Ziway and Adami Tulu Project fund. We had about 18 guys out there working, which was an awesome sight to see.

Special thanks to my father-in-law Jim Steward, who was our project foreman, and the guy who made it happen, Dave Wickstrom (our executive pastor at Auburn Grace).

This must be my fifth or sixth trip to Ethiopia. I’ve lost count.

It’s now an annual tradition. We brought our daughter home from this beautiful yet challenged land that has become our second homeland, and it stole a piece of our hearts.

Then a few months later, we saw the Ziway and Adami Tulu Project for the first time — schools designed to break the cycle of poverty and become a transformation factory that produces 140 business, political, spiritual, government, family and community leaders every year.

It’s a vision that captured our imaginations and yours too. Just a few years later, we’ve gotten to watch it grow from 275 students to 970 starting school this year. Thanks to you and this amazing group of team leaders, we’ve raised over $650,000 to build these schools. It’s incredible.

So here I am at 30,000 feet, on my way to Ethiopia yet again.

This is a working trip for me. It’s a busy time for Riskalyze. Fortunately, technology has changed tremendously over the last few years and I’ve even got some scheduled calls with customers, partners and investors during the evening hours while I’m there.

The big change this year is that I’m solo on the trip. Cacey decided she wanted to shift to an every-other-year schedule, and though I’m missing my partner in crime already, I’m sure this is the right decision for her and our kids. Somebody hurry up and invent teleportation!

Our mission with this trip is to lay the groundwork for building a high school that can serve all of these students as they prepare to enter the mission of transforming their country and their continent for the future. Along with that planning, we’ll be photographing every child for the sponsorship program, and introducing new team members to the vision.

And the amazing Sewers and Rippers group at Auburn Grace have sent about 200 handmade quilts, which will be spread around Ethiopia to people who desperately need them. They precision-packed them into 50-pound duffels that are all headed with the team towards Addis Ababa. I’m taking a duffel each to the Kolfe and Kebbehetseay public orphanages, which are places desperate for a glimmer of hope. The rest will head down with us to Ziway and Adami Tulu.

So whatever role you’ve played in this project — whether you wrote a check, sent a tweet, told a friend or sponsored a child — thank you. It’s your generosity that is proving this new model for changing the world.

And if you’re new to this story, I hope you’ll take the opportunity to follow along on Facebook, Twitter and Instagram. Let the challenge of the story change you, and may hope inspire you to like, retweet, share and envision how you can be a part of changing the world.

© 2013 Aaron Klein. All Rights Reserved. Contact Me