My guest today is Paul Merriman. I was introduced to Paul by a couple of listeners who requested I bring him on the show. I'm glad they did!

Paul is an experienced financial advisor. But, he did that as a retirement hobby rather than as a wealth-building strategy.

To build his wealth, Paul took over, built, and then sold a manufacturing company. After retiring in 1982, he proceeded to build Merriman, a Seattle-based investment advisory firm. 

He grew the firm from nothing to $1.6B of assets under management and then sold it and retired to run his financial education site: www.paulmerriman.com.

Topics on this interview include:

• The role of goals and affirmations on Paul's journey
• What it was like to build an advisory firm in the 1980s
• What Paul's retirement schedule looks like

Enjoy the show!

Joshua

Links:

• PaulMerriman.com
• Paul's Podcast
• "Six Decisions Every Investor Must Make" - Paul's Article on Marketwatch
• "10 numbers that can change your life"
• "Who should retirement investors trust?"
• "6 steps to the ultimate retirement portfolio"
• "Retirement savers: Fine-tune your asset asllocation"
• "30 reasons to fall in love with index funds"
• "Do you have enough money to retire?"

Today, I bring you an interview with a dynamo: Eva from TeensGotCents.com.

I met Eva in New Orleans at the FinCon conference. She was attending with her mother and I was incredibly impressed with her.

Eva writes about about personal finance for a teen audience. She began at the age of 15 and she shares her own journey and also gives advice for other young people.

In the interview, we weave two themes:

1. Eva's advice for teens
2. Eva's own experience/example as a financial blogger

Both of these themes are valuable. Frankly, I'm a bit jealous of Eva's early start in writing about the topics of personal finance. I wish I'd had the foresight to begin at her age.

Listen carefully to the story of her site and consider how you can help your children--or yourself--to start something similar. It's a really neat story.

Other topics include:

• Budgeting basics for teens
• The envelope system
• The value of attending professional conferences--especially for young people
• How to teach teens to get jobs

Enjoy!

Joshua

Links:

• Eva's blog: Teens Got Cents
• Spoken Word Performance #1: I Will Not Let An Exam Result Decide My Fate
• Spoken Word Performance #2: Why I Hate School But Love Education

Personal finance touches every aspect of life by definition. Every aspect of our life involves finance in some way.

As we make the decisions of life, we're constantly faced with cost and opportunity cost:

• Is it wise of me to allocate this $100 to a memorable evening's entertainment with my family or to set it aside toward a larger vacation fund?
• Should I use some extra money to upgrade the look and style of my wardrobe or purchase some extra books or classes to advance my knowledge?
• Am I better served by investing my money into ownership of publicly traded securities through my 401(k) account or will I get a higher return on my investment by improving the insulation of my house and upgrading my windows to an energy efficient version.

These are ultimately the decisions we face. Culturally, we usually separate these areas of life into different decisions. But we shouldn't. Each of them (and many thousands of additional options) impacts the other. 

We're far better off if we view our life as a web of integrated decisions and we should be able to flow seamlessly among our different options.

My guest today does just that.

Jeff and his wife are raising a young family and are working toward financial independence together. Their personal interest in sustainability and green living has naturaly integrated with their financial planning. DIY activities and home improvement have had benefits in both areas.

Enjoy today's show! 

Joshua

Links:

• Sustainable Life Blog

My guest today is Dr. Vern Poythress. Dr. Poythress is a mathematician and a theologian. Most important for this discussion, he and his wife, Diane, are parents to two children, both boys.

Dr. Poythress authored an article entitled "How I Helped My Boys to Become Christian Men," in which he outlined his family's approach to establishing a formal rite of passage for his sons to become men at 12 or 13 years old.

His formal test and qualifications for them included religious training, knowledge, and behavior, specific acts of service to others, and specific areas of wisdom needed in an adult life.

Much of this conversation is built on the Judeo-Christian tradition and Dr. Poythress outlines much of his curriculum from a religious perspective.

It's key to recognize, however, that most cultures have a rite of passage for young men and women; these ceremonies vary and many are cultural, not religious. For example, toward the end of the interview we discuss the tradition of the debutante ball, a "coming-out" party for young women.

If this concept interests you, consider designing your own curriculum based on your family's vision and values. Certainly, anything you intentionally design will be better than the negative rites of passage we currently promulgate in our culture.

Enjoy!

Joshua

Links:

• Dr. Poythress's website
• Dr. Poythress's bibliography
• "How I Helped My Boys to Become Christian Men

My guest today is Ben Falk. Ben is a really incredible permaculture designer with a comprehensive focus.

Ben runs a planning firm called Whole Systems Design. Through this firm, he "identifies, designs, and develops human habitats - landscape and infrastructure systems - that yield perennial abundance and enduring value. These are adaptive, resilient and secure places in a future of peak oil, climate instability, and deepening economic insolvency."

They also "plan, develop, and manage land-based wealth preservation and security projects for those with the forethought to invest an abundance of present day resources to reduce their familly's vulnerability to future food, energy and other supply-chain disturbances, as well as peak-oil, climatic, economic and other events."

The interview covers a variety of topics, including:

• Ben's path from architecture to comprehensive design.
• How to approach personal lifestyle design from a systems mindset.
• How to prioritize needs and investment.
• How he heats his house, heats his water, cooks his food, and dries his clothes in Vermont with a very small amount of wood.
• How he grows 80 to 90% of his food intake.

My favorite quote from the interview: "Don't fight something that's wrong. Make a new system that makes the old system obsolete."

Enjoy!

Joshua

Links:

• Whole Systems Design
• The Resilient Farm and Homestead: An Innovative Permaculture and Whole Systems Design Approach by Ben Falk

On Fridays, I answer your questions! I decided I didn't want to handle any of the in-depth, math-related questions today so I chose these three questions to handle.

• 1:41 - What can I do to prepare for being the executor of someone's estate?
• 16:49 - How can I reconcile the idea of being a specialist in my field with the advantages of being a generalist?
• 48:09 - What can I do to ensure a smoothe transition to a single-income household?

I hope you enjoy the show!

Joshua

Links:

• NOLO: The Executor's Guide for Settling a Loved One's Estate or Trust

Today, we welcome Jim Rawles, Founder and Editor of SurvivalBlog.com back on the show to discuss improving your lifestyle and personal resilience by moving.

We talk about optimizing your lifestyle within the United States by carefully selecting your location as well as the pros and cons of international expatriation.

Topics include:

• Ideas for playing the "State Line Jumping Game" (living in a no-income-tax state and shopping next door in no-sales-tax state).
• Brief mention of the "Five Flags Theory." In essence, the idea is that you can arrange your affairs over five different countries:
  • Flag 1: Business Base-These are places where you make your money. They must be different from your personal fiscal domicile, the place where you legally reside.
  • Flag 2: Passport & Citizenship-These should be from a country unconcerned about offshore citizens and what they do outside its borders.
  • Flag 3: Domicile-This should be a tax haven with good communications. A place where wealthy, productive people can be creative, live, relax, prosper and enjoy themselves. Such a place should not be threatened by war or revolution and preferably should enjoy good levels of banking secrecy.
  • Flag 4: Asset Repository-This should be a place from which assets, securities and business affairs can be managed anonymously by proxy.
  • Flag 5: Playgrounds-These are places where you would actually physically spend your time.
• Jim's idea for "The American Redoubt"
• The Free State Project and Free State Wyoming
• Estimate your own tax savings with SaveTaxesByMoving.com
• Considerations for international expatriation:
  • taxation, language skills, friendly to foreigners, strength of the economy, crime rate, climate and lifestyle, gun laws, homeschooling laws. etc/
• Discussion of Finland, the Philippines, Swizerland, New Zealand, Belize, Costa Rica, Panama, Chile, Argentina, Paraguay, Uraguay
• For more information check out the Sovereign Society and International Living
• For a Second Passport opportunity, consider St. Kitts and Nevitts
• Check out Jim's novel: Expatriates

Enjoy!

Joshua

Today on the show, I've got some last-minute tax planning ideas for you. These are all ideas and tactics that you can use in the last two weeks of 2014 to lower your income tax bill.

I hope you don't defer your tax planning to the end of December. The end of the year is far too late to start talking about the really good stuff. Good tax planning should begin before January 1.

But, these types of ideas can still be useful for you. It's possible that you've simply been too busy to do effective planning.

It's also possible you had an unexpected windfall and you need to wipe out some tax liability.

I'm here to help! :)

Let's start with the easy ones and move to the harder ones:

• Last-minute retirement account contributions.
  • 401(k)s and 403(b)s are tough becausec you have to have made your contributions as you go. Consider talking to HR about diverting a bonus check into the account if you can.
  • IRAs are simple. You can contribute any time until you file your return. You can contribute up to $5,500 in 2014. Don't forget about the $1,000 catch up if you're older than 50.
  • Almost everyone I've ever worked with is confused by the contribution limits. Read them for Roth IRAs and Traditional IRAs.
  • Little tricks for IRAs: You can make a separate payment for custodian fees, brokerage commissions, etc. in excess of the contribution limit. That will allow you to get the maximum value from the account.
  • Consider establishing a an HR10/Keogh Plan or a SEP IRA.
    • Keogh plans were very popular for self-employed people prior to 2001. There was a tax law change in 2001 and now they're largely replaced by SEP IRAs.
    • They have the same contribution limits but the SEP paperwork is much simpler.
    • A Keogh plan has to be established by the end of the year but it can be funded prior to filing your return.
    • A SEP IRA can be established after the end of the year and funded after the end of the year. 
    • The maximum contribution is the lesser of 20 percent of earned income, less your deduction for half your self-employed payroll tax, before the deduction, or $52,000. (This winds up being 25% of net earned income after the deduction.)
    • Remember that you can have one of these plans in addition to a 401(k) and an IRA.
  • Don't forget about the HSA. If you're covered by a HDHP, you can make your HSA contributions any time up till you file your return. Your contribution limits are $3,300 for an individual and $6,550 for a family. Remember also that there's a $1,000 catch-up contribution for 55+. This won't save you on your employment taxes but it will save you on your income taxes.
  • One final little trick on IRAs. Look to see if you'll be eligible for a saver's credit. If you're at a low income level, this might help you...even if you can't afford to save for retirement. If you need to and you want to be aggressive, you can contribute to your Roth in December, take the savers credit on your return, and then take the distribution in January. (You'll owe tax on any gain but not on the contributions/basis.)
• Consider deferring your income in other ways.
  • You can enter into a binding agreement until January to defer the grant of a bonus that you would otherwise receive in December. You need to enter into the agreement before the bonus is "constructively received."
  • The easy way to defer your income is if you are in business for yourself is to simply delay billing your clients until late December. You won't receive payment until the following year. Thus, no taxes in this year.
  • Remember that this only works if you are a cash basis tax payer. If you are an accrual basis taxpayer in your business, you have to report the income when it is earned, not when it is received.
  • If you have income from the sale of property, consider using an installment sale to defer income to a different tax year.
  • Consider accelerating your expenses to lower your net income.
  • In business, you can think through any end-of-year transactions you need to pay: accounts payable, conference fees, insurance premiums, marketing and advertising expenses, etc.
  • Remember that you have to follow the 12-month rule.
  • Consider buying equipment. In general, equipment will primarily be depreciated rather than expensed. But remember that you can make a Section 179 elect to expense up to $500,000 and then take your depreciation after that.
  • Consider bunching certain expenses such as medical expenses. If you've had a lot of medical expenses this year, consider going ahead and getting your dental expenses and eye expenses taken care of and pay forward the annual premium on your LTC insurance. That may result in enough deductions to take advantage of the medical expense deduction.
  • Consider accelerating your tax payments: real estate taxes, personal property taxes, and state and local income taxes. Pay them now to take the deduction. (Be careful of AMT.)
  • Consider making your charitable contributions and make sure to bunch them in years that you can fully use them.
  • If you're making charitable contributions, be smart about how you do it, especially with regard to your taxes. Don't only think in terms of cash.
    • If you have appreciated property that you've held over 12 months, contribute it to the charity and take a deduction for the FMV. (Avoids the tax on the gain.)
    • If you have loss property, sell it, take the tax loss and give the cash.
  • You can take deductions for items paid by check in the current year even if you mail the check on New Year's Eve, as long as there is no reason why the check can't be cashed in January.
  • Credit card charges can be taken this year even if you don't pay the bill until next year.
• Think through the tax ramifications of your relationships.
  • If you're planning an end of the year or New Year's day wedding, calculate your taxes and see when you should actually schedule the marriage. Doesn't have to be the same day necessarily as the wedding itself.
  • In general, marriage will only cut your taxes if one spouse works or earns almost all the income. Marriage will actually boost your taxes if both spouses work and earn good income.
  • Dependents: Most people think purely about kids. There might be a planning scenario involving them. For example, if you're having a planned C-section and the safe zone covers new years, have it on 12/31. Or, if you're adopting, try to get it finalized before the end of the year.
  • But, the major benefit for some of you might be if you're caring for parents. There are a bunch of detailed rules. The one I want you to focus on is if you're providing more than half of a dependent's support. Doesn't mean income...it means support. Might be worth it to bunch some of your support here at the end of the year so that you can claim them as a dependent.
• Make sure you harvest your tax losses but also that you harvest some gains. Ratcheting up your basis in your investment portfolio over time can really save money in the long run.

Is education something that we buy or something that we work for? Ever thought about that?

My guest today is Scott Young. I first heard of Scott when I watched his TEDx talk on "How to Get an MIT education for $2,000."

This interview is filled with tidbits that will be useful to you whether you're designing your own education or whether you're helping someone else with their educational plan.

Enjoy!

Joshua

Links:

• ScottHYoung.com

I love real estate investing. I think it's one of the most accessible, realistic ways for people to grow their long-term wealth at an excellent rate of return.

Today, I'm thrilled to bring you an interview with John Schaub. John is widely renowned as one of the good guys.

John has been investing in real estate for decades. He's also been teaching the subject for decades.

He has a wealth of ideas and knowledge to share with us today.

Enjoy!

Joshua

Links:

• JohnSchaub.com
• John's Seminars
• John's recommended authors: Bill Nickerson, Jay Decima, Zuckerman (?), Al Lowry, Donald Trump, Robert Allen, Robert Bruss

Today, we have a really fun Q&A for you! I hope you enjoy!

Here are the questions I answer:

• 2:25 If I have the cash, should I pay cash for a house or invest it?
• 17:13 Should I use my Coverdell ESA to speculate on early-stage biotech stocks?
• 28:05 Should a physician try to continue a private practice with a partial ownership interest or take a full-time hospital job?
• 40:38 How can I account for the business deductions in my side business?
• 49:40 Is multi-family, multi-generational living a good idea?
• 1:03:40 What do I need to know about disability income insurance?
• 1:26:03 Which college expenses can I pay for out of my 529 account?
• 1:33:27 Why do I use different inflation rates on calculations?
• 1:39:26 What kind of account can I use to gift money to my nephew?

Enjoy!

Joshua

Links:

• Lower Your Taxes Big Time! by Sandy Botkin

Today, I have a really great interview on finance from a Canadian Perspective. But make sure to listen whether you're Canadian or not.

My guest is Dan Bortolotti, founder of the Canadian Couch Potato website. He has a really great story where he began as a personal finance writer and blogger and later moved into the space of being a professional financial advisor.

We chat about:

• The value of a paying fees to a financial advisor
• The fit between PF writer and advisor
• Canadian tax law and retirement accounts
• Indexing from a Canadian perspective and similarities to the US market
• Home country bias
• And more!

Enjoy!

Joshua

Links:

• Canadian Couch Potato
• Dan's DIY Investor Service

The new year is fast upon us. Even though we're in the midst of the busy holiday season, this is a convenient time to consider the success and failures of this year and look forward to plans for next year.

Even though the articles you're now seeing in your feeds on "10 End-Of-The-Year Planning Ideas" can be useful, they just don't get it done because they're not focused on the core need.

The fundamental key of financial planning is to understand the process. Building wealth is a process. Achieving goals is a process. It's simple and can be readily replicated if you understand it.

It starts with a clear desired outcome. A.K.A. a goal. Or objective.

Then, it's a matter of laying out a strategy that is likely to work. And that strategy is connected with specific action steps.

And then you simply repeat the cycle over and over and over again.

Enjoy the show. I hope that it's useful for you!

Joshua

p.s., this might be a great show to share with others. Let me know if it's helpful.

Potential Journaling Prompts:

Financial Planning is--and should be--fully integrated with every aspect of life. Often, there are non-financial ways of hitting financial goals that are more efficient than just simply "buying the solution."

Helping your children develop their talent is one such area of focus. If you can launch a young man or woman with real, useful skills that have an economic value in the marketplace and which are aligned with their individual personality and interests, they will be far ahead of many of their peers.

This early start can launch the magical cycle of compounding earlier which can have a lifetime impact. 

Consider the impact of an early start:

• If a 16-year-old can learn to earn and invest $100 per month through developing and marketing their talent, they could accumulate a nest egg at 66 of $1,746,876.07. (50 years of investing, $100/mo each month, 10% interest compounded monthly, starting with $0.)
• If a 22-year-old begins when they graduate college, they will wind up with $955,649.56 at age 66. (44 years of investing, $100/mo each month, 10% interest compounded monthly, starting with $0) 

My guest is Jonathan Harris and he writes at the website www.10kToTalent.com. He is the father of 8 children and is a both a learner and an expert at developing talent in children.

Enjoy the interview!

Joshua

Links:

• Jonathan's website: 10kToTalent.com
• Jonathan's guides on helping children discover talent
• Jonathan's 13-year-old son's website: Scarab Coder
• Jonathan's 17-year-old son's website: Redding Drone

Doug Nordman is a really neat guy who has made an incredible contribution to the Early Retirement (ER) community. Known affectionately in various forums as "Nords," he contributes a rational, learned perspective on financial topics.

He and his wife both retired from the US Navy. Doug was 41 and has somehow managed to stay retired for the last decade. ;)

Join us today for a really neat discussion of the history of the early retirement movement and some of the contributions from its early leaders.

(It's not all fun and games...we do get into some technical details on early retirement as well!)

Joshua

Links:

• Doug's website: The Military Guide
• Cashing In On The American Dream by Paul Terhorst
• Early-Retirement.org
• RetireEarlyHomepage.com
• Yahoo article on Anton Ivanov (who lied about financial independence plan)
• "The Millionaire Liar" - Article from the original PF blogger who publicized his story
• The Hapless Y2K Retiree

It's Friday! That means a Q&A show for you. Today, I answer all of these questions.

Here are the questions and the time stamp for where each can be found in the episode.

Enjoy!

Joshua

1. 10:00 - Brandon: How do I convey our financial information to my executor if my wife and I die? Should I have my testamantery trust managed by a professional trustee?
2. 29:43 - Kyle: How do I save money on taxes as a young, single physician resident?
3. 54:01 - Daniel: Is it ok for a young person to have a 100% stock allocation?
4. 1:02:44 - Greg: I have $2.5M, can I afford to retire?
5. 1:10:44 - John: How do I find a good team of advisors?
6. 1:28:00 - Tom: Could I take a loss on a house I transfer into an ESA and then get the gain out tax-free?

Links:

• Last Pass
• Password Gorilla
• Save Taxes By Moving
• Step Transaction Doctrine
• Substance Over Form
• Garrett Planning Network
• XY Planning Network

In today's world, it's easy to find reasons for pessimism. And yet, we truly live in a time of greater abundance and quality of life than ever before.

Join me today as I share some reasons for being thankful and grateful to be alive today. It's a good time to be alive.

Joshua

Links:

• Ericsson Mobility Report for November 2014
• How Fast is 5G?

Today we have a really fun interview with Steve Maxwell.

Steve is the father of eight and his three oldest sons have all purchased their houses debt-free, in their 20s, and before marriage! His younger two sons have the same vision and are on track for a similar result.

How cool is that?!

Steve is an electrical engineer by training. He left his engineering job however and now spends his time writing books and traveling the country speaking and encouraging others with his ministry organization, Titus 2.

Enjoy!

Joshua

Links:

• Buying a House Debt-Free on Titus2.com
• The Maxwell Family blog

Today, I have a really great show for you with Christopher DeLaney. Christopher and his wife have two little kids and they maintain a modern lifestyle without a car! Impressive!

Christopher is gentle, unassuming, knowledgeable, and very helpful!

Enjoy this interview!

Joshua

Links:

• Article about Christopher and his family on Bike Portland
• Interview with Christopher and his wife on the Sprocket Podcast
• Pictures of a "Bakfeit" bicycle

Well, it took a few days longer than I planned because of the fact that its 600 incredibly dense pages, but today I share with you my review and critique of Tony Robbins' new book.

This was a very challenging project for me and frankly, it simply bogged me down in research.

It's really a great book. Highly recommened. But, it also has some things I'm not imporessed with and some minor and major flaws.

The show is long and in depth and my comments are organized around these themes:

• Intro & Preamble
• Summary of the general layout of the book (16:40)
• Things this book does really well
• Major Lessons I Learned (1:52:23)
• Minor and Major Flaws in the book (2:02:00)

I hope you enjoy!

Joshua

Links:

• Money: Master the Game on Amazon
• The book website
• How Money Walks
• List of Tax Expenditures
• The 2014 Investment Company Institute Fact Book
• Financial Planning Association study (46% of financial planners don't have a retirement plan?)
• Wealthy people are less likely to retire?

In our current culture, it's easy to become discouraged and feel as though the American Dream is out of reach for the common person. Is it easier to achieve now than in the past? Is it harder? Let's leave that debate for another day. Frankly, it doesn't much matter in your individual situation.

What does matter is whether it's possible to improve your circumstances and to pursue your version of happiness.

My guests today are proof that the American Dream is alive and well for some people.

In many ways, Mark and Lauren Greutman embody an oft-repeated scenario. Married young, four small kids, strongly middle class circumstances, mild to moderate overspending and being stuck in circumstances that felt beyond their control.

And yet, a few years after their wakeup experience, they're in a very different place.

Mark recently left his job in the corporate world and he and Lauren now work together in the family business.

Many of the tools we talk about each day in the show were instrumental in their journey and you'll hear how they are all interwoven.

Enjoy!

Joshua

Links:

• IAmThatLady.com
• MarkandLaurenG.com
• Mark and Lauren's podcast: The Simpler Happier Life
• Lauren's book: "How to Coupon Effectively"

Today, we take a look at one of the most misunderstood and underutilized accounts in your tax-planning aresenal.

The Coverdell Education Savings Account can be incredibly useful as a tool for you to pay for:

• elementary school expenses
• secondary school expenses
• homeschool expenses (in some states)
• college expenses
• vocational school expenses
• and more!

Perhaps more importantly, there are very few things you can't use as an investment in the account. You can choose to invest in:

• real estate
• notes
• tax liens
• companies 
• precious metals
• etc.

But what about the income limitations? Meaningless. You can circumvent them so easily they're utterly meaningless.

This account is constantly criticized as being useless. Check out my discussion of the details and see if it deserves the criticism.

Enjoy!

Joshua

Links:

• IRS Publication 970: Tax Benefits for Education
• Estate and Gift Tax Treatment of a Coverdell Account

My guest today is David Downie, an attorney from Australia. David found himself stuck in the middle of his career, frustrated at life and simply decided to quit without much of a backup plan. 

Many adventures have ensued!

Since that time, David has:

• Written children's books
• Contributed to the book 1001 Beers You Must Taste Before You Die
• Travelled
• Written a book on Radical Immediate Retirement

The interview is thought-provoking in every way!

Enjoy!

Joshua

Links:

• DavidJDownie.com - David's site about his children's books.
• Radical Immediate Retirement - the site and the book
• InteraliaPublishing.com - David's site on publishing
• AustralianBeers.com - David's beer review project
• The Secret Life of Bosses - story about David in the Sydney Morning Herald

What can you do if you're feeling a bit stuck financially? Basically stuck in the rat race? Expenses about equal to income and some debt hanging on?

Well, one strategy you could pursue would be to dramatically reduce your expenses by getting rid of your stuff, downsizing into a "tiny house," and getting rid of your cars.

Today's guest did that! And it ultimately led to her being able to build a lifestyle of financial freedom through entrepreneurship.

Tammy Strobel has a Bachelors of Arts in Economics, a Masters degree in Public Administration, and a Masters of Arts in Education. 

Before starting her micro-business in January of 2010, she worked in the investment management industry and in the social service sector as a peer counselor. 

As an entrepreneur, she sustains herself through writing, photography, and teaching. Over the last two years, hundreds of students have taken her e-courses to explore photography, writing, and what it means to make time and space for what matters. 

Enjoy the show!

Joshua

Links:

• www.RowdyKittens.com
• To explore Tammy's content, start here
• For info on Tammy's Tiny House adventures, go here

I've done a number of interviews on the show with early retirees and early retiree hopefuls. One common theme is that many of them are using traditional retirement accounts but are planning to retire before 59.5. 

How is that possible without paying a bunch of penalty tax?

Today, I share with you the answer to that question.

1. They may not actually take distributions from the retirement accounts. 
2. They might pay the 10% penalty tax because it's cheaper than the alternative.
3. They might do a Roth Conversion Ladder
4. They might use the 72(t) SEPP rules.

Enjoy the show!

Joshua

Links:

• New York and California state income tax rates.
• Dinkytown 72(t) calculator
• Kitces article on Bobrow v Commissioner

It's Friday! Today, I have a Question and Answer show for you and I've decided to handle a bunch of your questions. I felt like I cheated you last week by only answering 3 questions.

1. (6:27) How do I calculate a portfolio distribution amount that retains 50% of my portfolio at my death?
2. (20:31) Is it ok to keep money in cash or do I need to invest right away to start getting compound interest?
3. (40:21) How do I rebalance my accounts to get a proper bond allocation?
4. (52:28) Should I pre-pay my mortgage in a lump sum or should I invest the money and then make extra monthly contributions?
5. (1:02:12) I have an unpaid medical bill and CC debt. What do I do?
6. (1:12:04) How do I apply the trivium method to a new job?
7. (1:30:01) Any tricks for how I can pay for a big dental bill in a better way?
8. (1:42:25) How do I figure out whether I should switch custodians for my investment accounts?

Enjoy!

Joshua

Links:

• IRS Publication 502

There's a lot of interest in our current-day world with the ideas of survivalism and prepping. One visit to your local bookstore's magazine rack will illustrate this to you.

Economic recessions and depressions, market instability, political gyrations...all of these things contribute to a general sense of unease for many people.

What could we learn about financial planning if we applied the mindset of a survivalist to our current reality?

I'm thrilled to bring you an interview today with James Wesley, Rawles. James literally wrote the book on how to survive the end of the world as we know it, among others.

Jim has authored 6 books on the topics of modern survivalism:

1. How to Survive the End of the World as We Know It: Tactics, Techniques, and Technologies for Uncertain Times
2. Tools for Survival: What You Need to Survive When You're on Your Own
3. Liberators: A Novel of the Coming Global Collapse (his brand-new book)
4. Patriots: A Novel of Survival in the Coming Collapse
5. Expatriates: A Novel of the Coming Global Collapse
6. Founders, a Novel of the Coming Collapse
7. Survivors: A Novel of the Coming Collapse

Jim's blog, SurvivalBlog.com has had almost 70,000,000 unique visits since July of 2005 and is one of the most comprehensive compendiums of survival information online.

The interview covers:

• Stockpiling as a financial strategy (the "Alpha Strategy")
• Alternative investments such as precious metals, ammunition, and productive farmland
• Functioning in a barter economy
• Buying nickels for a guaranteed investment return
• Applying ethics and morals in an immoral society

Enjoy!

Joshua

Links:

• SurvivalBlog.com 
• "Getting Started" on SurvivalBlog
• "IRA Nationalization" on SurvivalBlog
• FAQ on Pre-1898 firearms
• RPF Episode 84: "Protect Your Wealth From Inflation by Implementing the Alpha Strategy (by John Pugsley): Concept, Implementation, and Problems"
• Jim's article on Investing in Nickels

Planning for a child's college expenses is a major financial goal for many parents. Unfortunately, this is an area filled with conflicting advice. 

Some people feel that saving for college is a financial goal of utmost importance; others feel it's not worth the money. Many that desire to save for the goal get constantly conflicting advice on whether to do a pre-paid tuition plan, 529 college savings plan, EE education bonds, cash value life insurance policy, or any of a couple other dozen exotic ways to plan for this expense.

Today, we continue our college series by teaching how to do a calculation of the need. I teach you how to use a simple financial calculator and paper and pen and come up with a precise dollar amount to save for.

Enjoy!

Joshua

Links:

• The historical rate of inflation of college expenses
• Current cost of tuition at UF
• Previous shows in this series: Part 1, Part 2, Part 3, Part 4
• Free web version of the HP12C financial calculator for you to use

How to manually do the math for the college need on a financial calculator:

Step 1: Calculate the cost of the first year of college with a simple future value (FV) calculation.

PV = -$20,550 (cost of college today)
n = 17 (years between today and first year of college)
i = 6% (rate of inflation of college tuition)
PMT = 0
solve for FV
FV = $55,336.48 (cost of college in the first year)

Step 2: Calculate how much money you need to have available when your child is in their first year of college.

PMT = $-55,336.48 (cost of college each year)
n = 4 (four years of school attendance)
i = 1.89% (inflation-adjusted return: [(1.08 / 1.06)-1] x 100 = 1.89%
FV = 0
solve for PV (make sure your calculator is in BEGIN mode)
PV = $215,262.97 (amount needed in first year for four years' tuition)

Step 3: Calculate how much the parents need to save in either a lump sum (PV) or yearly amount (PMT) or monthly amount (PMT-convert i and n to monthly amounts).

LUMP SUM VERSION
FV = $215,262.97 (amount needed in first year for four years' tuition)
n = 17 (years between today and first year of college)
i = 8% (rate of return of investment portfolio)
PMT = 0
solve for PV (if you want a lump sum)
PV = $-58,178.90 (lump sum amount needed today to fund the cost)

YEARLY SAVINGS VERSION
FV = $215,262,97 (amount needed in first year for four years' tuition)
n = 17 (years between today and first year of college)
i = 8% (rate of return of investment portfolio)
PV = 0 (current amount of savings)
solve for PMT (if you want yearly payment amounts...look for info in a case scenario on whether to use BEGIN mode or END mode)
PMT = $-5,905.67 (yearly amount needed to fund the cost)

Today, we celebrate our 100th episode! I'm thrilled to hit this milestone!

In today's show I share with you a bit about the genesis of the show, the path we've been on so far, and why I have done it the way I have.

Additionally, I share with you my vision for the future of the show. Specifically, today I'm launching The Irregulars, my new membership support program.

Please listen to the show and understand why I've chosen a listener-support approach to earning money from the show instead of accepting advertisers, affiliate programs, etc. It will make a huge difference in the show.

Enjoy!

Joshua

Links:

• So far, the most listened to show is the interview with Curtis Stone.
• Second most listened to show is the interview with Jacob Lund Fisker.
• Third most listened to show is the Millionaire Educator interview!

Today, we continue our education series with a discussion of my ideas and vision for primary and secondary school education. 

One large problem in the world of financial planning is that often parents wait too long to consider college planning. I propose that we instead consider college planning at birth and build flexible, comprehensive plans.

This show is purely about some of my ideas for my son's education. I hope you'll consider them and create your own list.

Enjoy!

Joshua

Links:

• First episode of this series: "How to Pay for College Part 1: Teach Your Baby to Read RPF0077"
• Second episode of this series "The Untold History of School That You Probably Don't Know: Interview with Brett Veinotte, Founder of the School Sucks Project" Part 1 and Part 2
• The National Center for Education Statistics: Annual Cost per Student: $12,608
• Audio Recording of "The Lost Tools of Learning" by Dorothy Sayers
• Bio of Arthur Robinson and his curriculum

This is an audio recording of Dorothy Sayers‘ well-known essay entitled “The Lost Tools of Learning.” The Lost Tools of Learning Dorothy Sayers That I, whose experience of teaching is extremely limited, should presume to discuss education is a matter, surely, that calls for no apology. It is a kind of behavior to which the […]