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

It’s Friday! Time for another Q&A show! I was able to answer a total of three questions: I basically doubled my income from $100,000 to $190,000. I’m spending $30,000 per year. How do I invest all the extra money? My parents want to retire but they only have $150,000 of home equity and Social Security. What […]

Sometimes it’s easy to think that financial independence is accessible only to “extreme” people. That’s simply not the case. You don’t have to live in a tent in the woods in order to gain financial independence. Certainly, you might be able to do it faster by living in a tent, but if you don’t want […]

Many of you have asked me to do a show on dividends and dividend investing. I decided to do it with an interview format instead of on my own. Today, we talk with Jason from DividendMantra.com about his path to financial independence. Jason woke up financially at the age of 27 to realize that he was […]

Today, we continue the Early Retirement FAQs series with Arebelspy, one of the lead moderators in the Mr. Money Mustache forums. We tackle the question of “Should I pay off debt first or invest first?” from every angle we can think of. This show is packed with ideas and perspectives, many of which I’ll bet […]

Babies are expensive! Right? Well, Mrs. RPF and I haven’t found it to be so. Today, I’d like to introduce you to my wife and we’ll share with you some of the strategies we’ve found useful in raising our son. General themes: Kids will cost you exactly as much money as you have. Or as much as […]