Radical Personal Finance: Financial Independence, Early Retirement, Investing, Insurance, Financial Planning
172-Retirement Planning From The Financial Advisor's Perspective: Interview with Roger Whitney, Host of the Retirement Answer Man Podcast

Retirement planning is at the core of the financial planning profession. But, it's a very complex subject and it's tough to wrap your head around the process.

I've invited Roger Whitney, CFP®, CIMA®, CPWA®, AIF®, financial advisor and host of the Retirement Answer Man Podcast on the show today to chat about retirement from his perspective.

Roger specializes in working with retirees and prospective retirees in a formal financial planning capacity. I think you'll be intrigued by some of his perspectives.

Show topics include:

  • Roger's path through the financial planning profession
  • How to create a retirement plan
  • How to plan for retirement when you don't have enough money
  • What to do if you can't retire...or simply don't want to
  • The impact of podcasting on Roger's financial planning practice

Enjoy!

Joshua

Direct download: RPF0172-Roger_Whitney_Interview.mp3
Category:podcast -- posted at: 12:51pm MDT

One of the challenges of personal finance math is the relevance of a particular scale. Sometimes you can get a massive benefit by switching to a different scale.

One famous example is the daily latte. $4 for a latte sounds about right in today's world. But if you do it every day, it adds up. To fully appreciate the impact of the seemingly small expenditure you can change the scale from daily to annual.

$4/day x 5 days per week x 52 weeks per year is $1,040/year spent on coffee. That's a lot of money!

If you're scared that I'm trying to take away your latte, don't be. I'm not! But I do want you to use and apply that tactic to the actual numbers from your financial life.

In today's show:

  • Updates from my canceling the show last week so I could launch the new website! It still needs plenty of work (especially for me to go back through and properly categorize all of the past episodes) but it's functional! 
  • Why we need to convert to a different scale to appreciate the meaning of a number.
  • Why we have problems understanding very large numbers.
  • Why we have problems understanding compound interest.
  • Converting from annual/monthly numbers into daily numbers.
  • Converting from daily/weekly/monthly numbers into annual numbers.
  • How to create factors to quickly convert numbers to a 10-year number for both one-time epenses and ongoing expenses.
  • Stretching to a 40-year time period and a lifetime time period.
  • Using the financial independence math based upon the 4% rule. (Multiply monthly numbers by 300 and annual numbers by 25 to know how much you need to have saved.)
  • How I apply this concept to my income as well.

Enjoy the show!

Joshua

Links:

Direct download: RPF0171-Change_the_Scale_of_Numbers.mp3
Category:podcast -- posted at: 8:50pm MDT

I've got a double problem this week that is keeping me from releasing shows:

  1. No internet at my house.
  2. Launching the new site.

So, I'm releasing a couple of interviews that have been recorded with me in the past.

This one is very good. Rob is a great interviewer and he was able to get very in-depth.

This show has an in-depth discussion of the benefits and problems of financial advisors. 

Rob was also able to pull some pretty personal stuff out of me from my past!

Joshua

Links: 

Direct download: DR_123-Joshua_Sheats-Radical_Personal_Finance.mp3
Category:podcast -- posted at: 3:42pm MDT

I'm not able to record a normal show today, so I'm releasing a copy of an interview I conducted with Nick Loper from Side Hustle Nation.

This interview was released on February 19, 2015 on Nick's show, just in time for tax-time!

This show is a good overview of some general tax tips:

  • When and why you should incorporate your business, and why most beginning side hustlers should NOT.
  • How to set up a business name even as a sole proprietor.
  • The types of expenses you can deduct as a side hustler.
  • 3 overlooked tax savings opportunities that will get your gears turning.
  • How to audit-proof your side hustle.
  • A free business idea for people who get a kick out of helping people save money.

Enjoy!

Joshua

Links:

Direct download: episode94.mp3
Category:podcast -- posted at: 9:00pm MDT

My guest today is a veteran of financial reporting. Fred Gabriel has spent the last 17 years reporting on the financial advice industry. He began his career as a mutual fund reporter and progressed to be named the editor of Investment News in 2012.

I spoke with Fred at the Technology Tools for Today Conference and we focused our conversation on the changing landscape of financial advice. Due to the nature of his job, Fred has a front-row seat on all of the changes happening in the industry.

The interview focuses primarily on the investment advice industry but does have ideas and content which can be applied to other industries. Topics include:

  • History of the investment industry and the changing appearance of financial advisory firms.
  • The changing role of marketing for financial services businesses. 
  • The transition from large investment firm marketing to individual financial advisor marketing.
  • How large firms can appeal to millenial advisors.
  • How trusted are financial advisors?
  • How advisors can build more trust with the general public.
  • The marketing of commission-based financial advice, fee-based financial advice, and fee-only financial advice.
  • The increasing transparency of the marketplace.

Enjoy the interview!

Joshua

Links:

Direct download: RPF0170-Fred_Gabriel_Interview.mp3
Category:podcast -- posted at: 1:42pm MDT

On Monday, I released the show on new cars vs used cars. It became clear to me while doing that show that I really needed to do an in-depth discussion of the concept of Opportunity Cost.

If you understand Opportunity Cost you can easily help people to make better decisions.

All of us make decisions based on what we value. Every transaction is based on each party involved preferring what the other has more than what he/she has.

Good decision making is largely based on simply understanding all of the options that each of us has, considering the various scenarios, and then choosing which scenario is most ideal for our circumstances.

In today's show I add some serious meat to this idea with a bunch of pertinent examples:

  • Car-buying options
  • College options
  • Housing options
  • Eating and moving options
  • Options on where we live
  • Family options
  • And more!

At the end of the day, you control your own life. Consider your decisions carefully and simply make the decision that is best for you.

Joshua

Links:

Direct download: RPF0169-Opportunity_Cost.mp3
Category:podcast -- posted at: 2:59pm MDT

I've brought you some shows on the concept of advancing your career by attending industry conferences.

But what about getting a double bonus by organizing the conference yourself? That way you get all the benefits you would get from attending but you get the added bonus of becoming an industry leader.

Plus, perhaps you can make some money on the event!

My guest today is Philip "PT" Taylor, founder of http://ptmoney.com/ and http://finconexpo.com/. PT started working as a CPA, transitioned to full-time financial blogger, and ultimately created one of the most well-loved financial conferences: FinCon.

The interview is a complete discussion of:

  • PT's personal finance story and his journey out of debt.
  • How he transitioned from working as a CPA to working as a full-time blogger.
  • Where the idea for the Financial Blogger's Conference (FinCon) came from.
  • How he financed the initial transition.
  • How much money he made in the early years and the most recent year.

Enjoy the discussion!

Joshua

Links:

Direct download: RPF0168-Philip_Taylor_Interview.mp3
Category:podcast -- posted at: 9:00pm MDT

Ahhh, the great debate over cars! Should I buy new or should I buy used?

In reality, the answer is simple:

  • What are the needs and wants you're trying to satisfy?
  • Which option meets those needs for the lowest total, lifetime cost?

Choose the option that fits best.

But, of course, there are as many ways to answer those questions as there are people in the world.

Regardless of the decision you make, here are some ideas for you to consider to lower the total cost and enhance your results:

  • The thought process for choosing a used car vs. a new car is no different than the decision applied to any other item that you own. We should consider new vs. used for every item that we buy. Cars are a bit unique though because of their relatively high purchase price and also because we have such an easily accessed and abundant used car market.
  • We have an incredible used car market in the USA because:
    • Tons of people regularly buy new cars while their old cars have lots of useful life left. If the supply weren't so plentiful, the recommendation to "buy used" would be more difficult to implement.
    • Vehicles are built to a high quality with a long potential life span.
    • Most vehicles are lightly used. Long highway miles on paved roads don't take a huge toll on a vehicle. If you were in a different situation, it would be different.
  • For most people, the highest cost of car ownership is depreciation.
  • Depreciation is calculated like this: Initial Purchase Price - Residual Value When Sold = Depreciation (your actual cost)
  • To make an intelligent buying decision, carefully consider your actual needs and wants and consider the options that will fit those needs and wants.
  • Think carefully about your opportunity cost. If you can save $10,000 of total cost over the lifespan of ownership, what could you spend that money on? For example, would you rather have a cheaper car and a motorcycle or just a more expensive car? Would you rather have a cheaper car and an extra $500,000 in 40 years or just have a more expensive car? The decision is up to you.
  • Consider all of the costs of ownership:
    • Depreciation expense
    • Fuel/energy costs
    • Downtime expenses (in case of repair)
    • Financing costs
    • Maintenance/repair costs
    • Insurance costs
    • Other expenses (parking spots, garage space, car wash expense, etc.)
  • There are ways to mitigate each of these categories of expenses. The best situation is to find an optimized approach in each category.
  • Since the biggest consideration between used and new is depreciation, here are some ideas to minimize depreciation:
    • Buy a less costly vehicle. (20% depreciation on a $40,000 vehicle is a loss of $8,000 in one year. 20% depreciation on a $20,000 vehicle is a loss of $4,000 in one year.)
    • Get an up-front deal. (Buy the same vehicle but buy it at a more opportune time for less. Be out of sync with the general marketplace.)
    • Buy a vehicle that depreciates at a slower rate. (Look for a unique segment where you can use a vehicle that maintains its value more than the general market.)
    • Take better care of your specific vehicle so that it depreciates more slowly. 
    • Keep your vehicle for longer. (No matter whether you buy used or new, just keep your vehicle for longer so that the impact of depreciation is lessened.)
  • If you want to give a shot at havine a one-car household isntead of a two-car household, consider supplementing for your transportation needs with Uber or Lyft.

Enjoy the show!

Joshua

 

Direct download: RPF0167-Used_Cars_vs_New.mp3
Category:podcast -- posted at: 9:00pm MDT

I'd like to share with you a look behind-the-scenes of the business of Radical Personal Finance. I want you to know why I host a daily (or at least almost-daily) podcast and why I've stuck with that, even with many people suggesting less frequency.

To be clear: I don't think you should copy what I'm doing. But perhaps if you understand why I'm doing what I'm doing you may be able to apply it to your own endeavors.

I'm creating this show for a few reasons:

  • Some listeners are concerned about my pace and my ability to sustain it.
  • It will be helpful for you no matter what business you're in as you can understand my thinking process as I create a new business.
  • It will be especially helpful for you if you're a podcaster. I think a lot of the advice that's being given in the podcast world is bad...people say "do this" without illustrating the principles behind it. I will share with you what I'm doing and also why I'm doing it.

This show is going to sound very me-focused. It's intended to be helpful for you but I'm sharing all of my personal, selfish motivations to demonstrate my way of thinking. 

My reasons:

  • Fundamentally, I host my show daily because I believe the format is best for my audience. That's it. I want to be a source of daily encouragement, inspiration, and education in your life. I remember how important having a source of daily encouragement was to me in the past when I was working my way out of debt in college.
  • I'm scratching my own itch. I'm creating the show I wish were there for me when I was 15 years old. I have nothing else to go on. I want one show that has unique content that makes me think. I don't want to wander around downloading from 11 different podcast feeds to scratch my itch. It's more convenient to have one but for that one to have varied content.
  • I needed and still need to build the skills of a broadcaster. By doing a daily show instead of a weekly show, I have 400% more experience than I would have otherwise. That experience compounds over time. I believe it's wise to learn and then really learn by doing. I have a tremendous competitive advantage because of how hard I work at it and I have learned and improved tremendously. I have the long-term view: I'm focused on 2015 but I'm even more heavily focused on 2017. Or 2018 when the potential audience size increases massively. I need to be ready for that.
  • I'm doing what I believe I'm best at. I don't feel that I'm the most creative writer. But I'm a good speaker. So, I'm focusing on my strengths. Producing lots of verbal content actually comes more easily to me than to many people.
    • I have years of pent-up frustration to express.
    • I have years of financial ideas that have never been publicized.
    • I'm a verbal learner so the best way for me to learn is to teach.
  • There is more competition in the podcast space than ever. I want to push my competitors aside in terms of audience focus. I want people to find my show, fall in love with it, and stop searching for new content. Their other feeds will run out of content. Mine won't.
  • I'm modeling the success of radio and TV. Most well-known radio programs are 5 days per week. Why? Because of the normal flow and routine of our work week. Many people listen to things while they work and the 5-day work-week is common. People are used to the regular flow of content streaming in on their radio, their TV, etc. Now, there's a transition to on-demand. When you find something you like...you zero in and consume the archives.
  • But, I pay careful attention to the differences between podcasting and radio. Radio is not cumulative. Radio is a "dip your toe in the water" kind of format. You'll notice that radio is always either current events or Q&A. That's great for tuning in and tuning out. Podcasts are different. I'm focusing on taking the good from radio and adjusting it for a podcast-listening audience. Some listeners listen every day almost as soon as the show comes out. Many listeners go back and listen to the archives. I try very hard not to repeat topics. There is some overlap but I'm focused on consistently fresh, new ideas.
  • Format is not the answer to a problem. Content is. You should fit your format to your content and goal. There are many popular weekly programs. But I don't really enjoy many of them because I'm not interested in the content. I simply believe that the format that I've chosen is the best way for me to help my listening audience.
  • I essentially have four different shows and I can't choose between them:
    1. A short-format Q&A show.
    2. An interview show.
    3. A technical financial planning show.
    4. A unique personal finance show.
  • Different types of shows appeal to different audience members. My technical shows are the least popular. But some listeners only listen to them. By having a varied format I can appeal to a broader audience. My vision is to keep the content so varied that you're always interested in what tomorrow's show topic will be!
  • I'm focusing on the strengths that I have: I didn't have an audience when I started. I didn't have a platform. I didn't have experience as a broadcaster. I didn't have any other content to promote. So, I can whine about it or I can focus on what I do have. What I do have is a tremendously broad interest in various topics and a tremendous depth in financial planning topics. So, I'm focused on highlighting my strengths and playing to them rather than worrying about my weaknesses.
  • I'm focused on my core fans and completely focused on serving them with massive value. You always have to look at who is giving you comments and feedback. I read online feedback often about my show: Joshua's show has too many episodes. I factor it in. But just because someone in an online forum doesn't like the format...they're not paying me any money. Just expressing their opinion doesn't mean I should change because of it. I pay attention to the names of the people that send me money. I listen carefully to them. And many of them listen to every show and many of them like the daily format. In fact, many of them only send me money because of how consistently I deliver content.
  • I'm focusing on bringing in new audiences. Diverse topics are good for daily listening--that's the most important thing. But they're also good for helping new listeners find me. People search google. People search itunes. Shows get linked. The more content I create on specific topics, the more findable and useful I am. Interviews are also helpful. Every time I do an interview, I have the potential to reach a new audience and attract some additional listeners. I get bored by a lot of interview-only shows. But, I think some interviews are valuable to my audience. If I did a once-a week show, I wouldn't have any interviews. Two per week feels like a good fit to me.
  • I'm focusing on financial productivity of the show.
    • Patreon probably shouldn't work based on the percentage of many audiences who support various creators. If you run the numbers of some of the largest Patreon campaigns, the "conversion ratio" is tiny. It averages about .03% of a listening audience who is actually supporting a creator. The percentage of the audience who is sending money to me volunatarily for my show is about 5%. I'm convinced that's because of the much closer bond I have with a daily show.
    • Advertising that is based on a Cost Per Thousand (CPM) model is also based on the number of shows I produce. If I use John Lee Dumas's numbers of $43 per thousand listners per show and I calculate based on 3,000 listeners, my income potential is dramatically different based on the frequency of my show. Four shows per month, 3,000 listeners, $43 per thousand listeners and two advertisers per show comes out to to $1,032 of monthly income. 4 x 3 x $43 x 2 = $1,032/mo. But, 20 shows per month is very different: 20 x 3 x $43 x 2 = $5,160/mo. That's compelling.
    • Affiliate commissions: if I'm here every day reminding you about something that I'm selling, there's a much bigger reach than if I'm talking to you once per week.
    • If I'm selling my own products, it's exactly the same.
  • I'm creating the job I want to have and testing it on my own time before I go and try to find it. If the podcast fails, I might go and try to compete in the financial talk radio space. I think that would be fun to do. But that format would probably be daily. I wanted to see what it would be like to follow that schedule.

I'm not committed forever to this format. I'm still experimenting. But for now, the benefits are so great in comparison to the drawbacks that I'm continuing forward.

The competitive landscape is changing. I may change in the future.

But for now, my barometer for success is the heartfelt emails I receive from committed listeners who really value my content. I'm having a connection and an impact on the community. I believe what I'm doing is working and I won't change it until I find something I believe will serve more effectively.

At this stage, I'm creating a body of content and building an audience. I might shift my focus in the future. But not yet. I understand where I am in the phase of my business and this is one piece of my plan.

Take these things and apply them to your business and life endeavors.

  • What are you trying to do?
  • What skills do you have?
  • What is your unique selling proposition?
  • How can you stand out from the competition?
  • Who are your customers?
  • How can you serve them?
  • How can you learn from others and study them but not necessarily copy them? Model, don't copy.
  • How can you focus on your strengths rather than your weaknesses?
  • How can you choose yourself and choose your career?

Focus on what you can do, not on what I can do. There are many, many other things that I would love to do more than I'm doing now. I don't have the capacity yet to do them. But I can focus on what I can do. And that's working.

My format is not my pledge or my brand. My content is. If I don't have something worth saying and if I'm not prepared to deliver a show, I'm not going to waste your time.

My commitment is to the audience. To bring you an idea worth hearing that is well prepared and well presented and that is useful to you. That's my brand. Not doing a show every day.

I also don't care if a show is 3 hours long or 3 minutes long. It should be exactly as long as it needs to be to convey the point and to be effective. Sometimes that's short. Sometimes it's long. Sometimes it's being split into two or three parts.

But format does not equal content. 

Enjoy!

Joshua

Links:

Direct download: RPF0166-Why_I_Podcast_Daily.mp3
Category:podcast -- posted at: 12:53pm MDT

This week I'm focused single-mindedly on the new version of the Radical Personal Finance website. So, I'm releasing some alternative content to you for your listening pleasure.

This is Part 2 of an interview I gave on the Family Adventure Podcast with Erik Hemingway. It was released in November 2014.

The interview is an introduction to a bunch of concepts on how to focus your budget so that you can afford long-term adventure travel.

It's super fun. Erik has a great podcast that my wife and I enjoy listening to together. 

Enjoy!

Joshua

Direct download: JoshuaSheatz2.mp3
Category:podcast -- posted at: 3:13pm MDT