Radical Personal Finance

Today on the show, I answer these two questions:

Joshua,

The reason why I am writing has nothing to do with finances, but career advice.  Did you (or do you) provide career counseling?  If not, can you at least recommend someone you trust?  I thought I heard you mention on a previous show that you were involved in that line of work, unless I am mistaken and it was a guest. 

Brief intro: I am 32 years old, a recent MBA graduate, and have a really unique professional background that makes career transitions exceptionally difficult. 

Suppose I were a client of yours who is considering a career change at a radical 50% pay cut.  There are huge financial and emotional considerations at stake.  Would such a career change be consistent with my financial goals?  

I have been working in a specific industry since I started fresh out of college.  I have recently undergone an ideological conversion to a different system of thinking, and now face some cognitive dissonance over what I do for a living and who I do it for.  I want out.  

In fact, this is the reason I went back to school for my MBA a couple years ago.  I thought the MBA might help me push the reset button on my career, but the job market hasn’t been kind to me.  I have applied to all kinds of jobs that I’ve thought were similar enough to the work I currently do.  Unfortunately, I find myself caught between a rock and a hard place: I am too old to be considered for lower-tiered, entry-level positions.  I am also too inexperienced to be considered for more senior or mid-level positions.  I am seen as a liability: recruiters think I won’t last very long if they bring me in at a lower level.  Recruiters think I won’t last very long if I am brought into a new environment or industry.  I am stuck, and I am hoping to speak to someone who can help me do two things:  1) better understand what marketable skills I have in the private sector, and 2) better understand what jobs exist that are the best match for my skills.

And it gets a little crazier: due to Non-Disclosure Agreements I have signed I cannot fully disclose the exact nature of my skills! This is perhaps the real pickle.. which makes this ordeal much harder than it would normally be for other career changers.

What are your thoughts?

-Bill

AND at 51:24

Hey Joshua,

Thanks so much for the show. It has really helped me and my fiance get our finances in order and start us thinking about how we could become financially independent. Even as a Canadian I've gotten a ton out of the show and have tried to hook as many people as I can.

I was wondering if you might be able to touch on tips and tricks for someone who doesn't earn a consistent or regular income. I do video work and while it's consistent right now, I have spent most of my working career either working every day in a month or not working at all for weeks at a time. I was just curious if there might be any wisdom you can impart on those kinds of situations.

Luckily my fiance has a very stable job and makes good money so it gives us the ability to plan at least a bit.

Thanks again for the show, I look forward to it whenever I walk the dog and on the way to work.

-Brendon

Enjoy the show!

Joshua

Links:

 

Direct download: RPF0160-Friday_QA.mp3
Category:podcast -- posted at: 8:00pm MDT

159-Financial Planning Isn't Just For Boomers Anymore: Interview with Alan Moore, Co-Founder of XY Planning Network

The financial planning industry faces many challenges. One of the major challenges has been how to effectively serve younger generations of clients.

My guest today has some ideas on how things can be done better. He set out originally to develop a different model of financial planning practice for himself and wound up creating a company dedicated to bringing the model to the world.

Alan Moore, MS, CFP, is from Bozeman, Montana. He runs a financial planning firm called Serenity Financial Consulting and is Co-Founder of the XY Planning Network.

Enjoy this discussion of:

  • The challenges and benefits of working with younger clients.
  • New ways to structure a financial planning business.
  • How to build a lifestyle financial planning practice.

Enjoy!

Joshua

Direct download: RPF0159-Alan_Moore_Interview.mp3
Category:podcast -- posted at: 8:18pm MDT

Today, we dive into the details of Pre-Paid Tuition Programs. I'm generally not a fan of these programs and you get to hear why! (I do acknowledge that they have their uses). 

This opinion (my non-fan-ness) has always been a bit challenging since I do financial planning the state of Florida...and Florida has the most popular pre-paid tution program in the country!

But, I still believe I'm right and today, I defend that belief.

Listen to the show to hear:

  • Why pre-paid tuition programs are in tough financial straits.
  • Why you get a negative nominal rate of return on Florida's program.
  • Why college tuition prices are falling so much even if the official statistics don't reflect the reality.

Enjoy!

Joshua

Direct download: RPF0158-529_Plans_Pt_3.mp3
Category:podcast -- posted at: 8:00pm MDT

157-Raising Six Kids On The Road: A Long-Term Travel Lifestyle Interview With Greg Denning From Discover, Share, Inspire

I'm fascinated by long-term travel stories. After all, some people have to wait until they're retired to travel but some people are able to do it long before?

How? Why? What can we learn from them?

My guest today is fascinating. Greg Denning and his wife, Rachel, are living a long-term travel lifestyle. Currently, they're driving from Alaska to Argentina via Europe. Impressively, they're doing it together with their six kids!

Why are they doing it? How are they paying for it?

Tune in to the show to find out!

Joshua

Links:

Direct download: RPF0157-Greg_Denning_Interview.mp3
Category:podcast -- posted at: 9:00pm MDT

Most of us have heard the example of the magic penny that doubles every day in value for a month. But, have you sat down and looked at that example to really understand what lessons you can apply to your own life?

Today, I share with you 5 lessons I've learned from that example:

1. Rate of return matters

2. Time matters

3. In the beginning, it's easy to spend. That's what most people do.

4. In the beginning, the amount you save matters more than the interest rate.

5. In the end, the interest rate matters more than the amount you save.

Enjoy the show!

Joshua

Links:

Direct download: RPF0156-Compound_Interest.mp3
Category:podcast -- posted at: 9:00pm MDT

https://www.patreon.com/radicalpersonalfinance

I don't think it's unfair to say that the financial planning industry is known for being a bit stuffy at times. If you ask an average person what they think of when they think of a financial planner, it's more likely to be an old, white guy in a suit and tie sitting in a mahogany-lined conference room than a young, vibrant lady with a theater and women's studies  double-major. But, perhaps that's changing!

My guest today is Sophia Bera, CFP® and she's shaking up the financial planning industry! Her tagline is "I'm not your father's financial planner." And, she's certainly not. Instead of going after the retiree market, she has chosen to focus exclusively on serving Gen Y clients.

Sophia is part of a new generation of financial planner who is working to bring a different style of financial planning services to a new market.

And, she's doing it on her own terms.

In this interview, we discuss:

  • Sophia's story and how a non-financial person wound up becoming a financial planner.
  • How financial planning fits into Sophia's ideas for the ideal design for her own lifestyle.
  • Why entrepreneurship is the new job security for millenials.
  • How the financial planning industry is dealing with its reputation of being filled with old, white men.

Enjoy!

Joshua

Links:

Direct download: RPF0155-Sophia_Bera_Interview.mp3
Category:podcast -- posted at: 5:09pm MDT

http://Patreon.com/RadicalPersonalFinance

We continue our Masterclass on 529 plans today. If you haven't heard part 1, Go back and listen to episode 138 first. http://radicalpersonalfinance.com/138-masterclass-on-529-plans-a-k-a-qualified-tuition-programs-part-1/ You'll need it for context on today's show.

Today we dig into more of the how-to regarding savings plans. I also spend a good bit of time explaining the state income tax benefits for you. Depending on your situation, these may or may not be important for you.

Topics:

  • Which states give a tax deduction for 529 contributions and how much?
  • Which states offer tax parity?
  • How to take advantage of the 529 State Income Tax Loophole.
  • How to figure out if you should take advantage of a plan with lower fees or a plan with a better deduction.
  • Who should own the plan--parents, grandparents, or child?
  • How do 529 plan distributions get reported?
  • What are the best 529 plans to choose for each state?
  • How can you get free money for college?

Enjoy the show!

Joshua

 

 

Direct download: RPF0154-529_Plans_Pt_2.mp3
Category:podcast -- posted at: 6:38pm MDT

153-The Massive Impact of Conferences on Personal Career and Income: Interview With Michael Kitces

http://radicalpersonalfinance.com/patron

I had the opportunity to sit down with Michael Kitces while I was in Dallas last week for the Technology Tools for Today conference for financial advisors.

Michael is, in many ways, a conference king. He speaks at 60 to 70 conferences per year. He also writes the most influential blog focused on financial advisors.

What fascinates me is the development of his career. Michael's career developed from very humble origins. He found an area of interest and then applied years of diligent effort. Years later, he has succeeded in raising his personal income by a factor of 10 through the consistent application of some basic principles.

Enjoy this peak into the development of a career and consider how you can apply the same principles to your own endeavors.

Enjoy!

Joshua

Links:

Direct download: RPF0153-Michael_Kitces.mp3
Category:podcast -- posted at: 9:19am MDT

152-Measuring Your Biggest Asset: The Lifetime Value Of Your Income

http://radicalpersonalfinance.com/patron

You've probably heard that your income is your biggest and most important tool in your wealth-building toolbox. 

It is. But it's hard to see and feel that when you simply sit down and look at your net worth statement.

Today, I want to share with you a technique that has been useful for me. It's primarily a framing technique: it allows you to actually see the value of your income as compared to your current financial condition.

It's been incredibly useful to me and I hope it's incredibly useful to you!

Notes:

  • Calculate the lifetime value of your income.
  • Then, think about what you can do to increase that number.
  • There are three primary levers to push:
    1. The higher your starting income, the better.
      • Focus on starting from a position of strength (higher wages).
      • Look for high-skill or high-education industries.
      • Focus on a difficult industry. Hard work pays!
    2. The higher the annual increase, the better.
      • Build and apply knowledge, skill, and ability.
      • Be in an industry which will reward your increases.
      • Look for big-jump increases by constantly job hunting.
      • Establish yourself as a leader in your industry.
      • Look for industries where competition is low and you can gain a competitive advantage.
      • Look for exponential growth and leverage opportunities.
    3. The more years of income, the better.
      • Start earlier. Can you simply get started now without waiting for formal credentials?
      • If it's too late for you to start earlier, can you help someone young start earlier?
      • Work longer. But consider if you'll be able to persist.
      • Look for work that you can do for longer. (Be careful of laboring jobs or mandatory retirement programs.)
      • Look for work that you'll want to do for longer. (Does it integrate with your lifestyle? Do you gain satisfaction and enjoyment from the work itself?)
      • Look for work where your age and wisdom will be an advantage. (Plan ahead for ageism and be prepared to overcome it.)
      • Look for work where your lifetime knowledge and experience will be an asset, not a liability.
  • Your homework:
    • Calculate the expected value of your life's income.
    • Is it enough? Play with the variables and see what kind of alternatives you can create.

 Links:

Direct download: RPF0152-Lifetime_Value_of_Your_Income.mp3
Category:podcast -- posted at: 3:44pm MDT

151-Travel Announcement - Flying to Dallas Tomorrow - RPF Meetup?

Hey amigos,

I've decided last minute to fly out to Dallas, TX tomorrow morning to attend the "Technology Tools for Today" conference for financial advisors.

There may not be a show for the next couple of days. I will do my best to release some shows while I'm there but no promises!

If you're interested in what's happening at the conference, please feel free to connect with me on Twitter https://twitter.com/JoshuaSheats or Facebook https://www.facebook.com/joshuasheats

If any of you listners who are in Dallas would like to meet up while I'm out there, please either email me or reach out on social media.

Thanks!

Joshua

 

Direct download: RPF0151-Dallas_Announcement.mp3
Category:podcast -- posted at: 6:50pm MDT

Today's show is a fabulous interview about career creation. My guest is Scott Ginsberg. Scott is most well-known for his love of name tags. He's worn a name tag every hour of every day for 5,241 consecutive days!

This decision was, in many ways, the foundation of his empire. It formed the story for his first book. Since then, he's written a total of 27 books on a variety of topics.

I'm utterly fascinated by Scott's career. You'll hear that in the interview today.

We discuss:

  • Scott's utter lack of planning for his career?
  • The power of a positive family environment
  • The value of being remarkable
  • Input vs. output vs. throughput
  • The importance of excellence vs. prolificacy

Enjoy the interview! It's super fun!

Joshua

p.s., thank you to each of you who have supported the show so far on our crowdfunding Patreon campaign! We're off to a great start with 15 patrons and $280 per month! Go sign up with at least a $1/mo. pledge and you'll receive access to my brand-new 20-minute video: "A Framework for Wealth."

 

Links:

Direct download: RPF0150-Scott_Ginsberg_Interview.mp3
Category:podcast -- posted at: 2:55pm MDT

149-A Brand-New RPF Crowdfunding Campaign! And A Brand-New App For The Show

http://RadicalPersonalFinance.com/patreon

Today, we launch our brand-new crowdfunding campaign! I've closed the old Irregulars membership program and am replacing it with this new campaign.

Tune in to the show to hear:

  • What worked well in the Irregulars version 1.0.
  • What didn't work at all.
  • Why I've felt guilty every time I've recorded a show for the last few months.
  • Why I'm launching the new crowdfunding campaign.

Also, we're launching our brand new app! Go get it from the app store and let me know what you think!

Joshua

Links:

Direct download: RPF0149-Patreon_Campaign_Launch.mp3
Category:podcast -- posted at: 7:30pm MDT

148-Save Money By Establishing a Non-Profit Corporation For Your Business Instead of a For-Profit Corporation: Inerview with James O'Neil from Training For Safety

Have you ever thought about the money you could save if you didn't have to pay taxes on the profits of your business? Might be nice, eh?

Well, have you ever considered establishing a not-for-profit corporation instead of a for-profit company?

Perhaps it might have some advantages for you!

My guest is James O'Neil. James is a former police officer and now is involved in a company called Training For Safety.

Having run both types of companies, James is a great guest to introduce the topic.

Enjoy!

Joshua

Pros and Cons of a Not-for-Profit Entity

Pros

  • No Corporate Income tax, often no State or Local Income Tax
  • Eligible for Public and Private grants
  • Donations – Cash and Non cash (e.g., batteries)
  • Corporate structure / Liability protection
  • Cost savings – Insurance, business license, business discounts
  • People view nonprofits differently
  • IRS (kinder and gentler IRS)
  • Lots of free or low cost assistance
  • You are a “real” business
  • Volunteers

Cons

  • Must have a nonprofit goal (charitable, educational, religious, literary, or scientific purpose)
  • Expense to setup (about $1,000)
  • Lots of time to setup (IRS and State forms & waiting for approval)
  • Paperwork (but applying recently got easier)
  • Lack of privacy (tax returns are on Internet)
  • Shared control (Board of Directors, corporate officers)

Book Recommendation:

Direct download: RPF0148-NonProfit_Corporations_Interview.mp3
Category:podcast -- posted at: 7:26pm MDT

147-Overcoming Investment Anxiety: Interview With Dr. Alice Boyes, Former Clinical Psychologist and Long-Term Traveler!

My guest for today's show is Dr. Alice Boyes, former clinical psychologist from New Zealand. She is an expert on overcoming anxiety (her new book "The Anxiety Toolkit: Strategies for Fine-Tuning Your Mind and Moving Past Your Stuck Points" comes out next month). She also happens to be quite tuned in to the financial independence and early retirement lifestyle! She's here today to give us some practical ideas and tools for how we can overcome anxiety about investing.

The conversation includes:

  • The impact that a fluid mindset vs a fixed mindset can make
  • How to gain investment confidence in simple, small baby steps
  • Tricks for how to get yourself to do what you know you should do.

Enjoy the interview!

Joshua

Links:

Direct download: RPF00147-Alice_Boyes_Interview.mp3
Category:podcast -- posted at: 9:00pm MDT

Good data is incredibly important to making good financial decisions. If you don't know where you are or where you've been, it's hard to know if you're on track and making measurable progress towards your goals.

Today I've invited Ryan Marquez CPA, MSAT on the show to give an introductory overview. Ryan is an instructor in the Masters of Taxation program at Boise State University. He also runs a bookkeeping and tax business.

Enjoy this introduction to business bookkeeping systems!

Joshua

Show Outline:

  • Overall Theme
    • Change Your Mind Set on Bookkeeping and Accounting
      • Accounting is the Language of Business
      • Don’t need an accounting degree or CPA designation
        • However, should try to understand basic concepts.
      • Bookkeeping = getting accounting information organized so that you can start to make better decisions about your business.
        • Some information you can get out of good bookkeeping is:
          • Which areas of my business make the most money?
          • Getting a high level picture of expenses so you can analyze and see where costs can be cut.
    • Accounting Needs to Be Simple
      • If you follow one rule… accounting needs to be SIMPLE.
      • Two Reasons:
        • Complicated provides little value.
          • Large spreadsheet hard to process and takes time.
        • Complicated has less likelihood of getting done.
          • Entrepreneurs want to be out running their business, not sitting around doing bookkeeping and analyzing reports.
          • Simple system = less time doing and analyzing numbers.
  • Source of Funds
    • Open Business Checking Account & Credit Card
      • Only run business expenses through this account AND run ALL business expenses through this account.
        • Put business in this account and personal in another account.
        • DO NOT mix the two.
      • The reason you want to do this…
        • Everything is in one place and electronic.
          • Less likely to lose deductions.
          • Everything will be on statements. One can go down and categorize.
        • Avoids having a box of receipts that you have to sort through, figure out what is business vs. what is not, try to make sure nothing is double counted, etc…
      • How to get a business account
        • Go to a bank and open a business checking account and credit card (debit cards are fine… the point is an electronic payment method that will show up on a statement)
        • Will likely need two things:
          • EIN from IRS. Can do online. Will get letter by paper / electronic.
          • SOS documentation. In Idaho, just fill out a one page form. The SOS will stamp and mail back.
    • Avoid Cash
      • I know a lot of people like to use cash. However, I like to recommend not using it for business purposes.
      • The reason I recommend not using cash is.
        • Easy to lose track of.
          • Receipt could get lost, accidentally thrown away.
          • Pay with wrong source of “funds” or “cash”.
          • Main reason is the transaction is never recorded at all.
            • Want an accurate picture of your business.
            • Lose tax deductions.
        • Gets more important if you have multiple businesses.
          • Take what I just mentioned, and multiply it by 2 or 3 times and that’s how complicated it can be.
          • Tough to remember which business it was for.
        • Cash adds complexity to the accounting system.
          • Doesn’t sound too complex, but it’s just one more thing you have to do / remember.
          • When you’re trying to rack your brain to figure out what was paid for… it can get complex, but most importantly it can become frustrating.
        • You’re most likely not going to find cash on a bank statement, which makes it harder.
  • Recording the Transaction
    • Use Accounting Software Such As QuickBooks / FreshBooks
      • You want to do this because…
        • Saves you time.
          • Mainstream accounting software is made for non-accountants to be able to follow and use the software.
    • Use App or Other 'On the Go' Software
      • Easy because you can pull up your phone and categorize transactions on the go.
        • I’ve found people that do this almost feel like they’re not
    • Keep A Balance Sheet
      • The balance sheet is important because in business you're always going to have people that owe you money or people that you owe money to. In addition, you could have sales tax, payroll tax, deposits on hand, etc… that is money you have in your bank account but you'll have to pay to someone else at a later date.
      • A simple excel spreadsheet or even something like Mint that tracks your income and expenses from your bank account won't be able to track this for you
      • For example, if you're thinking about taking money out of the business or getting ready to make a large investment in a piece of equipment or something, you want to make sure that the money is available and that you don't need it to pay sales tax next month or something like that.
      • Some things a balance sheet is helpful for:
        • Record Deposits Correctly
          • Don’t want to record income that isn’t income.
        • Track Accounts Receivable / Payable
          • Want to keep track of who owes you money and who you owe money to.
        • Inventory / Payroll Liabilities / Sales Tax
          • Inventory not an expense when purchased.
          • Payroll liabilities are usually withheld from employee paychecks and need to be remitted to the government at a later date.
          • Sales tax is collected when product is sold and needs to be remitted to the government at a later date.
  • Documentation / Retention
    • Write on Receipts / Invoices Immediately
      • Helps to document the business purpose of the expense and can capture some valuable information that's easily forgotten later.
      • Why is this beneficial?
        • Quickly recall the purpose and payment method for each receipt that you have.
        • Most questions from an auditor or bookkeeper / accountant can be answered by looking at the receipt.
        • Helpful for locating a receipt from a specific transaction in your accounting software.
      • How do I do this?
        • Start to get in the habit of writing on all of your receipts and invoices. You don't need a dissertation for each receipt, just a brief description. An example of a meal receipt could be, "Amanda / Todd / Michelle… discussed the marketing campaign for the XYZ product launch".
  • Create A Filing System
    • Scan All Receipts
      • Electronic system can cut down clutter and could potentially be easier to find something you're looking for.
      • Can be backed up in the cloud or external hard drive in case something happens to the paper file.
      • I see a lot of people wanting to do a bunch of folders to keep their receipts in. Either by year, month, vendor, or what have you.
        • I'm a fan of less folders because for each folder you have, that's one more folder I have to click into to see what's in there if I can't find something.
        • I usually name the PDF by the date (year, month, day) and then the vendor and category.
      • Some apps / software allow you to take a picture of your receipt and link it to the expense.
  • Getting It Done
    • Set Specific Time to do Books
      • Either weekly or monthly. Anything over that it starts to not get done.
Direct download: RPF0146-Ryan_Marquez_Interview.mp3
Category:podcast -- posted at: 8:05pm MDT

145-Brilliant Market Timing or Pure Serendipity? Interview With Nick O'Kelly, Co-Author of Live On The Margin

My guest today is Nick O'Kelly. Nick is the co-author of Live On The Margin, a book about taking a different approach to regaining control of your time. (We previously interviewed Pat Schulte, his co-author, in Episode 50: "From an $8/hr Job After College to Financial Independence at Age 30 to 10+ Years of Global Travel With Family! Interview With Pat Schulte From Bumfuzzle.com")

Nick is a meteorologist, a pilot, a captain, and an adventurer. He's also a writer, producer, and voiceover artist.

Enjoy this in-depth interview in which we discuss:

  • Nick's seemingly brilliant timing
  • The advantages and drawbacks of travel
  • How to learn to trade stocks
  • And more!

Enjoy!

Joshua

Links:

Direct download: RPF00145-Nick_OKelly_Interview.mp3
Category:podcast -- posted at: 7:58pm MDT

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