Radical Personal Finance

One of the most fundamental transformations of our modern time is taking place in the field of communication. Although it might feel like we're far into this change, we're really not. It's only just begun

One of the most important effects of this change is that very small businesses--like financial advisors--can effectively market to the broader market at a very low cost.

My guest today is an expert in this field.

Bill Winterberg is the founder of FPPad.com. Bill founded FPPad in 2008 to be a leading source of news, insight, and thought leadership in financial planning technology.

Bill has successfully leveraged his experience in the financial industry and his applied knowledge in medial creation to build a neat consulting and speaking business for himself.

Pay special attention to the content of this interview if you're involved in the financial services industry. But also pay careful attention to this interview if you are involved in any business or industry! These trends are affecting you.

Enjoy!

Joshua

Links:

 

 

Direct download: RPF0211-Bill_Winterberg_Interview.mp3
Category:podcast -- posted at: 2:25pm MDT

210-An Intelligent Person's Guide to Self-Education

Our value and contribution in this world will be directly impacted by the level of our education. It's impossible to create more value without more education.

(Yes, there are many kinds of education. I'm using the word inclusively.)

But, under what system and whose goals have we been educated?

Unfortunately, many of us have been educated under a system that promotes someone else's goals over our own. Too few of us know how to sit down and design an educational path that will take us closer to our goals.

In today's show, I share with you a number of important ideas including:

Enjoy the show!

Joshua

If you enjoy today's show, please:

  1. Share the show with a friend.
  2. Leave a review and rating in the podcast directory where you find the show.
  3. Support the show on Patreon: http://radicalpersonalfinance.com/patron

 

Direct download: RPF0210-Guide_to_Self_Education.mp3
Category:podcast -- posted at: 12:52pm MDT

209-The Insider Secrets of Angel Investing! (Or What Angel Investing is Really Like): Interview with Doug Nordman (And, Should I Rent or Buy?)

Today, I welcome Doug Nordman back to the show! Doug is an early retiree (he retired at 41) and his hobby is helping other military personnel improve their financial lives.

One of the more interesting aspects of Doug's financial life is his involvement in private business as an angel investor. He's not only involved with the community of investors near him in Hawaii, he's also committed a substantial amount of his savings toward his investments.

In this interview you'll learn:

  • Why Doug invests his money in private companies even though the majority of his investments are held in mutual funds.
  • How much money he has made and how many of his investments have gone bust!
  • How to get involved as an angel investor yourself!

You'll also learn how to make the decision of rent vs. buy when considering where to live.

Enjoy!

Joshua

Links:

Direct download: RPF0209-Doug_Nordman_on_Angel_Investing.mp3
Category:podcast -- posted at: 3:02pm MDT

208-Three Ways To Increase Your Income At Your Job

Many people would like to earn more money. But, few people know how to actually look at their situation to assess their opportunities to actually do so.

In today's show I share with you the framework that I use to think about money. It's simple but effective.

And, most importantly, it's exclusively focused on the things you can actually do and change. It's practical and immediately actionable.

Listen to the show to hear:

  • The only three variables that affect how much money you earn in a free market economy.
  • Which variables have the most impact in the short term and which have the most impact in the long term.
  • How to assess your personal situation to decide where to focus your efforts.

Enjoy!

Joshua

Links:

Direct download: RPF0208-3_Ways_to_Increase_Income.mp3
Category:podcast -- posted at: 3:15pm MDT

Hey amigos!

Today is my 30th birthday! I'm having an incredible day celebrating with my family and friends.

30 is a big milestone for me. I've been reflecting deeply on the last decade and looking forward to the next decade.

I thought about creating a "30 Lessons Learned from 30 Years of Living" for you, but I decided to simply share one of my favorite messages with you instead.

This audio is a short clip from a Jim Rohn speech. I keep it on my desktop and listen to it at least a couple of times per week.

This is the succinct message that I would like to share with you to celebrate my birthday.

I hope you enjoy it as much as I do.

Talk soon,

Joshua

Direct download: RPF0207-Why_Not_You.mp3
Category:podcast -- posted at: 2:11pm MDT

Hey Radicals!

Just a quick announcement episode to share that the show will be taking a quick summer break for a few days. I have some show-related work to handle and I can't get it done and still continue producing content this week.

Also, please expect the shows to be slighly more sporadic during the month of June...details in the audio!

Joshua

Direct download: RPF0206-Announcements.mp3
Category:podcast -- posted at: 5:00am MDT

Q&A today and I handle these four questions!

  1. Does tax-loss harvesting really offer the kind of benefit that companies like Wealthfront, Betterment, Personal Capital, et al claim? And can a person do it on their own without relying on a firm to do it for them?
  2. Thought you should know something I recently found out. California child labor laws no longer apply once you have graduated from high school.  In addition, California has a method to graduate by exam (similar to a GED, but GEDs are only available to those 18 or older).  The high school proficiency exam (which is easy) can be taken by anyone who is 16 or older or who has completed 10th grade or will have completed 10th grade by the end of the academic year in which they take the test. My son, who is 15 1/2 and in 10th grade, took the exam and passed it. Nothing prevents him from continuing on in high school, but he's no longer subject to child labor laws. He's seriously considering switching to community college in September, doing that for 2 years, and then transferring to a University of California campus to finish off his college.  That'd get him a solid college degree by the time he's 19. During that entire time, he'd be eligible to work whatever hours he wants. Another option we're considering is self-study (with my help; I used to be a Computer Science professor), taking a bunch of AP exams, and then entering UC at age 18 with at least one year (and possibly more) of credits. 
  3. Joshua, Can you weigh in on your thought about being an accredited investor and the legal limitations around it?  As I understand it, I do not qualify as an accredited investor.  And certain investments cannot be invested in by those who are not accredited.  however, apparently the rules were supposed to have changed to allow people to make investments of these kinds without the government saying that I have to make X amount or have X amounts of savings.  but, as I learned by listening to the podcast Startup (episode 7) by alex blumberg, these rules have changed with the JOBS ACT, but the FCC has been sitting on the ruling and is way overdue for implementing it so that someone like me can invest in these previously off limits investments without being told that we can't.  That episode of startup really explained a lot to me, because I had wanted to invest a large amount with alex after listening to the very first episode of startup (i assumed he would be very successful because I've loved his stuff for years and he's leveraging some seriously big friends for his new venture), but I couldn't invest in something I really thought was going to be a huge success (or at least provide me with good cashflow) because of these rules.  I'm also about curious why these rules exist.  Were they implimented to protect people from being scammed out of their  money?
  4. Joshua, As a young engineer, who is single, making a salary of over $80,000 in Texas (no state income tax): Should I max out my 401k if my goal is to become very wealthy, before age 40? Or, should I invest some in my 401k and invest the rest in REITs/other, more risky assets. Of course, along the way, I will be very frugal, and live way below my means. Thank you, love the show. 

Enjoy the show!

Joshua

Direct download: RPF0205-Friday_QandA.mp3
Category:podcast -- posted at: 5:00am MDT

One of my goals for Radical Personal Finance is to bring more transparency to the world of professional finance. Today, I'm glad to shine the light on the life insurance industry.

I've invited a friend of mine onto the show to discuss his 30-year career as a life insurance broker.

Todd Simpson CLU®, ChFC® is a veteran of the life insurance business. His specialty is high-risk underwriting, so he brings not only a long career's worth of experience but also a unique perspective to the difficult-to-place cases.

I think you'll really enjoy this conversation. We cover:

  • The incredible changes that have occurred in life insurance product design over the last 30 years.
  • The most common medical problems that cause problems with life insurance underwriting.
  • The impact of drugs and drug use on your ability to get a life insurance policy.
  • And more!

Enjoy the show,

Joshua

Direct download: RPF0204-Todd_Simpson_Interview.mp3
Category:podcast -- posted at: 5:00am MDT

Many of find ourselves in a situation where we are concerned about the financial well-being of our parents. Obviously, we'd like to help, if possible.

But, this is rarely easy. There are many, many challenges that can emerge. In essence, to truly answer these questions you'd not only have to have all of the skills of a financial planner, but also the background of a relationship counselor, a life coach, and more!

It ain't easy!

I created this show as an overview of ideas that may be able to help you get involved and to help your parents. Some of the ideas are technical financial suggestions, others are more practical and relationship-oriented.

The show is structured around:

  1. Ideas to help create a great life of good health.
  2. Ideas to help in case of the need for long-term care.
  3. Ideas to help plan your parents' estate to make the estate settlement process smoother.

I hope it's useful to you!

Joshua

Direct download: RPF0203-Caring_for_Older_Parents.mp3
Category:podcast -- posted at: 5:00am MDT

My guest today is a author named Matthew Bracken. Matthew is a sailor, writer, and former Navy Seal. He's the author of four novels (all of which I've thoroughly enjoyed.)

Most importantly for our purposes, he is an expert on the topic of achieving a lifestyle of freedom through sailing.

He wrote an excellent essay called "Get Yourself a 30-Footer and Go!" which advocates a quick entry into the sailing world as a way to build economic opportunity for yourself.

During the course of the interview, we cover three primary topics:

  1. How to go about getting started in sailing and how quickly it's possible to achieve a lifestyle of freedom.
  2. Matt's experience establishing himself as an independent, self-published novelist in the semi-dystopian genre.
  3. The potential impact of societal changes and how to prepare for them.

Enjoy the show!

Joshua

Links:

Direct download: RPF0202-Matt_Bracken_Interview.mp3
Category:podcast -- posted at: 5:00am MDT

Q&A show today and I answer these two questions for you:

  • Joshua, My parents just moved to Florida last year and got wooed by an advisor that bought them dinner, gave them a free round of golf, etc. and now they're in an annuity and I can't figure out how badly they are getting screwed (not because there's anything inherently wrong with annuities but because the advisor is sadly not a fee-only advisor so I imagine he's taking a big cut of the action). I'm trying to convince them to find a good fee-only advisor to help them get set up for retirement but I'm not sure how to go about finding a good one. Thanks for the help!
  • Joshua, I can't thank you enough for starting Radical Personal Finance; been a fan since you did the interview with Jacob Fisker :) I have learnt so much from you and others in the personal finance community - I'm unable to quantify with an exact figure yet, but I know it's going to compound to a huge amount (possibly millions?) over my lifetime. This morning I just signed up via Patreon to support your show. It's a small amount, but one important thing I've learnt on my PF journey is learning to pay for value rather than simply focusing on cost. I have a question which relates to the investment part of building wealth. How should I invest an idle USD$20,000 that's sitting around in my savings account for maximum returns? I feel I'm sufficiently exposed to the stock market at this stage and diversified enough within and outside the publicly traded securities realm. I don't want to pour money into publicly traded stocks as due to mean reversion, future returns tend to be lower when markets are at highs. Please feel free to suggest the most radical ideas you have - that's why I love the show! Some background on myself: I'm 28 years old living in Singapore. My marginal tax rate is 7% but we are forced to contribute 20% to our own tax-free housing/medical/retirement accounts. Annual take home salary (post taxes and retirement etc contributions) is about USD$50,000. Invested USD$60,000 in semi diversified stocks, ETFs and REITs. USD$20,000 in alternative non-publicly traded investments. Have 6 months emergency fund. Have a 30 year level term insurance for USD $400,000. Time horizon: >20 years. I consider myself an aggressive investor willing to take large risk on small sums of money for the potential return, if the mathematics are in my favor (eg NO lotteries, YES to EM stocks). I know it's hard to provide investment suggestions without knowing the nuances of each individual situation. Right off the bat I know I should be focusing on: increasing my salary/earning potential and starting a side business. Should I be getting more insurance coverage? Should I be maxing out retirement accounts when my marginal tax rate is only 7%? Is there anything else I'm missing? As a goal oriented person (and my goal is to reach FI fast!), I can't stand the fact that my money is idling in my savings account earning a negative real rate of return. Keep doing great work!

Enjoy the show!

Joshua

Direct download: RPF0201-Friday_QA.mp3
Category:podcast -- posted at: 5:00am MDT

From time to time, I receive questions from listeners about the equipment that I use to produce my show. I also get questions about the mistakes I've made and what I would do differently if I were to do it over again.

Today, I share the workflow that I use to create my show and some of the lessons I've learned in 200 episodes of podcasting.

This show does not contain any specific financial planning or personal finance content. It does include a discussion of my thought process in creating the show and how I selected my Unique Selling Proposition for the show.

Resources mentioned:

Enjoy the show!

Joshua

Direct download: RPF0200-Podcast_Equipment.mp3
Category:podcast -- posted at: 5:00am MDT

Today, we continue the life insurance series with the valuable background of whole life insurance. Exciting stuff!

This show is an introduction to the various product features and design ideas. We cover:

  • Ordinary life insurance
  • Limited pay life insurance
  • Cash values
  • Policy loans
  • Nonforfeiture or Surrender Options:
    • Surrender for cash value
    • Reduced amount of paid-up whole life
    • Paid-up term
  • Annuity or retirement income
  • Policy conversion
  • Participating versus nonparticipating policies
  • Policy dividend options
    • Cash
    • Applied to premium
    • Used to purchase more insurance (fully paid up)
    • Left with insurer to earn interest
    • Used to purchase more insurance (term)
    • To overpay premiums until policy is fully paid up

Enjoy the show!

Joshua

 

 

Direct download: RPF0199-Whole_Life_Insurance.mp3
Category:podcast -- posted at: 5:00am MDT

I received a question from a listner which I decided to answer for you on today's show:

  • Joshua: So, this is a "fun question" that everyone loves to fantasize about. I hope it will be fun for you to answer, but it could have a really boring answer, but I'm sure you'll surprise me somehow! 
  • What would you do if you won the lottery?
  • As a financial planner, what advice would you give to a client who had won the lottery? What would the most optimal tax strategy be? Do you take the payments or the lump sum? Would the up-front tax hit be worth it for the long term capital gains? -Micah

So, today I tackled the question! Be prepared...my answer is a bit different from many people's answers to this question.

I do share very specifically with you what I would do. I share what I would buy and what I would invest in. But, I felt it was important to go ahead and address a few of the reasons why I feel the way I do.

This show is very personal to me and it involves a lot of how I see the world. I hope you enjoy it!

The show is divided into three parts. Feel free to pick and choose if you want to, but give it a shot listening straight through:

  1. The first 47 minutes of the show are about lotteries in general and why I'm not a fan.
  2. Starting at 47:00, I share the underpinnings of my worldview and the framework for how and why I handle money.
  3. At 1:41:00 I share specifically what I would buy and what I would invest in.

Enjoy!

Joshua

Direct download: RPF0198-If_I_Won_The_Lottery.mp3
Category:podcast -- posted at: 5:00am MDT

Today, I have a tightly focused show for you with a few key points from the CFP® Board curriculum. You will need this information on the CFP® Board exam and it will be useful for you as an individual.

First, I share with you how to choose between needing a 3-month emergency fund and a 6-month emergency fund.

Next, I share with you the manageable percentages of your income which you can allocate to debt payments.

Enjoy!

Joshua

Direct download: RPF0197-Size_of_Emergency_Fund.mp3
Category:podcast -- posted at: 5:00am MDT

Today, I'm cleaning out the voicemail inbox for my Friday Q&A show. Here are the questions for today:

  • What strategies for student loan payoff did I forget last week?
  • How do we help our young kids without enabling them?
  • Thoughts on consolidating retirement accounts.
  • What are the limits on retirement accounts for a stay-at-home spouse?
  • Thoughts on various retirement income distribution strategies.
  • Do I have additional services and options to help with coaching individual people?

Enjoy!

Joshua

Direct download: RPF0196-Friday_QandA.mp3
Category:podcast -- posted at: 5:00am MDT

How much do you spend each year on fuel costs for your car? What is your current mileage per gallon?

Before you rush out and buy a new hybrid to save money on gas, consider improving your driving techniques. It doesn't cost you anything except attention and focus and it can make a substantial difference.

As an example, check out this guy who got his 3/4 ton pickup truck from an EPA estimate of 15 mpg to almost 60 mpg!

In today's show I feature 109 tips for more efficient driving. These tips come from the good folks at the Ecomodder forum.

Listen to (or read) the list, choose a couple of techniques and start practicing! Enjoy the savings and put the money to work elsewhere in your life!

Joshua

Direct download: RPF0195-109_Hypermiling_Tips.mp3
Category:podcast -- posted at: 5:00am MDT

Today, we finish out the 3-part series on preparing for layoffs in the coming recession.

Today's show will be useful to you, even if you just got notice of your layoff and didn't do anything to prepare for it beforehand.

The major theme of today's show is that you need to take appropriate action with appropriate speed. If you're stuck with little savings and no preparation, that means take massive action, now! If you've planned a bit better in advance, it means be strategic and thoughtful.

We discuss:

  • The impact of self-confidence on your job hunt.
  • The importance of having work now and not being unemployed for a long time.
  • How to take massive action on your job hunt for quicker results.
  • What types of approaches are most successful for job hunters.
  • Some radical strategies you can plan for that will enable you to simply wait out and enjoy the recession instead of being stressed by it!

Enjoy!

Joshua

Direct download: RPF0194-You_Just_Got_Laid_Off.mp3
Category:podcast -- posted at: 5:00am MDT

Yesterday, we talked about ways to avoid losing your job in the coming recession. But obviously there are factors beyond your control which might result in your being laid off, even though you've done everything "right."

So, you need a backup plan.

Don't wait and wonder what you'll do. Make a simple plan now for what you'll do.

Think about some different scenarios and play some mental games with yourself. That way, you'll be able to better respond to events instead of being shell-shocked by them.

Today's show covers:

  • The importance of planning to avoid emotional stress when you get laid off.
  • The direct impact of losing your income and how to plan for it.
  • The impact that losing your group benefits can have on your financial life.
  • Why you should consider establishing lines of credit before you need them.
  • How you can stockpile both money and the simple necessities of life.
  • The simple things you can do that will make it much easier to get your next job.
  • The importance of proactively building and maintaining a network.
  • How thinking like a consultant will help you now and help you later.

Enjoy!

Joshua

 

Direct download: RPF0193-Backup_Plan_For_Layoffs.mp3
Category:podcast -- posted at: 10:00am MDT

For most of us, our jobs are the economic engine that drive every aspect of our financial plan. One of the worst things that can happen is to lose a job.

If the engine on your car dies, you're going to be stuck by the side of the road for a while. That's not pleasant for anyone, even if you're stuck in a safe area. But, if you're driving up a mountain (paying off debt and digging yourself out of a hole), having your engine die can be disastrous. And, if you have a destination in mind (financial independence), losing the engine in your car will at least delay you from reaching your destination.

So, the key is plan in advance to not lose the engine. Make sure you're doing the things you need to be doing now to avoid being laid off.

Obviously, you can't guarantee that you'll never be laid off, but you can do a lot to improve your possibilities!

On today's show, we cover:

  • The need to proactively improve your position within your company, your company's position within the industry, and your industry's overall prospects in advance.
  • Some ways to know if you've got a big target on your back or a small target on your back with the HR people are figuring out who to cut.
  • The importance of competing with your fellow employees and of collaborating and cooperating with them and why both are valuable.
  • Ways to stand out and produce up to 4x the output of your fellow employees.

Enjoy the show!

Joshua

Direct download: RPF0192-Dont_Lose_Your_Job.mp3
Category:podcast -- posted at: 10:00am MDT

Today, I handle these four questions:

  • 3:02 Joshua, I just started listening to your show and I've learned a lot already. I originally started listening because I have an interest in one day becoming a personal finance consultant, but that's a long way off, for now I just need help with a crazy student loan issue! I am currently paying almost $600 a month for a $102k student loan at 7%, couple of key things, credit is shot due to bk filed last year, the loan is with the nelnet through dept of Ed, the question is should I pay down the loan, or find an investment that will pay me $600 to offset payment? Right now the $600 is preventing me from moving forward on anything financial, I'm expecting a lump some of money in February, like $60k, I would love to invest it where I can earn $600 or more a month to offset the payment! Any ideas?
  • 28:56 Joshua, I recently stumbled upon your podcast and just started listening to it from the very beginning. Your approach to each podcast has been a from a very practical point of view which I really appreciate and hence enjoy listening to it! Please keep up the great work! At the time of writing this, I just finished with the episode "rfp-0009 - Why is your house a terrible investment." I myself am in the stage of having signed a contract on a home and waiting for closing date. All through the show James and yourself have made many, many valid points. I myself have already tracked down my cost (also factoring in an average monthly maintenance expense) to owning a home in an excel spreadsheet and even-though most often than not, one usually tends to buy a home which is slightly bigger in area that the what one was renting (same with me), the numbers for buying a home vs renting still look better (to me) in the long run. I live in the slightly expensive Northern VA area. I have been renting for the last 7.5 years (in various capacities from being a full-time student to full-time employee to full-time employee + part-time student) and can definitely say that annual rent increase adds up over each year. In order to keep the rents at a reasonable rates you will have to move every 2 or 3 years. This would add moving expenses, cleaning expenses, security deposits and a peace-less mind to your rent calculations. But this has not been factored into the James' calculations. Yes, when you own a home your property taxes may also go up as the home appreciates, but this won't be as much as how much the rent would increase year-in year-out. Also your home may or may not appreciate every year for this to happen. Would like to know what your comments are to this.
  • 36:09 Joshua, I have a 1 year old son and am married.  My wife is in school earning her PhD.  Can my wife and I create two separate 529 plans to double our tax benefits (one in my son's name and one for my wife)?  Indiana's benefit is 20% tax credit ($1000 max credit).  If not should we create a 529 anyway?  We have the money to pay for her $30,000 education already saved to be spread over the next 3 years.  Thoughts?
  • 40:06 Joshua, My parents just recently started working with a fee-only financial adviser after their recent retirement. She has been doing a nice job with them so far helping them come up with their financial goals, seeing if they are able to achieve them with their current assets, and choosing the most appropriate Social Security choice for their needs and goals. I have been attending the meetings with them. Either in the next meeting or the meeting after, the question of converting their traditional IRA to a Roth IRA will come up. Other than their paid-off house, most of their portfolio is in traditional IRAs. She is of the belief that it doesn't make sense to convert any of the traditional IRA to Roth because they don't have the taxable funds to pay the necessary taxes. I'm of the opinion that since the income they currently receive from their IRAs is well under the $74,900 limit (filing jointly) keeping them in the 25% bracket, that they should convert some of it and pay the 25% tax rate before they have to start taking much larger RMDs in the future at higher tax rates. Of course that also ignores future potential tax hikes. They understand the benefits of having some flexibility for the future as well as the benefits of passing a Roth to me and my sister on their deaths (another one of their goals). The question I have is: What are the appropriate questions to ask the financial advisor as to how to look into whether converting makes sense outside of the generalities that you shouldn't because you don't have taxable funds? How do you 'run the numbers' so to speak to determine if converting is in their best interest? And also, how do you come up with that sweet spot amount in order to stay inside the 25% tax bracket and not pay taxes outside that bracket? Is that a question for a tax accountant or should a financial adviser be able to answer that question as well? Thanks for all you do.

Enjoy the show!

Joshua

Direct download: RPF0191-Friday_QandA.mp3
Category:podcast -- posted at: 10:00am MDT

Today we dig into the topic of trading stocks. And who better to speak with than the guy who started a "university" to teach the subject?

My guest today is Steve Burns, founder of www.NewTraderU.com

Here's some background about Steve, directly from his About page

"After a lifelong fascination with financial markets, Steve Burns started investing in 1993, and trading his own accounts in 1995. It was love at first trade. A natural teacher with a unique ability to cut through the bull and make complex ideas simple, Steve took to blogging and social media by founding New Trader U in 2011.

"Since then, New Trader U has attracted hundreds of thousands of visits a month, becoming the go-to resource for people wanting to build a strong, trading foundation. New Trader U offers an extensive blog resource with more than 1,000 original articles (Steve posts daily).

"Asked daily if he could mentor, Steve realized that there weren’t enough hours in the day to give everyone the attention they deserved, so New Trader 101 was born. Developed to help beginning traders survive their first year in the markets, New Trader 101 quickly became Steve’s passion."

The interview covers:

  • Steve's personal story as it relates to financial independence
  • His suggestions for individual investors to protect their portfolios
  • Learning to manage the psychology of investing
  • Teaching kids the skills of investing

Enjoy the show!

Joshua

Direct download: RPF0190-Steve_Burns_Interview.mp3
Category:podcast -- posted at: 10:00am MDT

Today we continue our life insurance series dig into the topic of term life insurance.

Term life insurance is an incredible financial product and extremely useful. It also has some options that are not commonly understood or explored.

We discuss:

  • What is term life insurance useful for?
  • Normal life insurance policy designs:
    • level term insurance
    • annual renewable term insurance
    • decreasing term insurance
    • increasing term insurance
  • Key policy features:
    • renewability
    • convertibility
    • disability waiver of premium
    • reentry term insurance
    • return of premium rider
  • Group term insurance
  • How to analyze costs
  • What about those who say term insurance is the only appropriate solution?
  • How to find a policy
  • How to get insurance with a medical condition

Enjoy!

Joshua

  • If you'd like access to the spreadsheet with return of premium rate of return calculations and the annual renewable term vs. level term discussion, support Radical Personal Finance on Patreon! http://radicalpersonalfinance.com/patron
Direct download: RPF0189-Term_Life_Insurance.mp3
Category:podcast -- posted at: 10:00am MDT

I'm not able to record and release a show for you today so I'm releasing an interview that I gave on the Work Strong America podcast with Rick Seigmund.

This interview was originally released on Rick's show on February 4, 2015.

Enjoy the show!

Joshua

Links:

Direct download: WSA_Episode_005_Joshua_Sheats_Interview.mp3
Category:podcast -- posted at: 9:00pm MDT

Years ago, I learned an extremely valuable thinking process from Brian Tracy called Zero-Based Thinking. Today, I share it with you.

Here's the question: Is there anything in your life that, knowning what you now know, you wouldn't get into again today if you had to do it over?

If the answer is yes, then you follow up with these questions: How do I get out? How fast do I get out?

By consistently applying this question to every area of our lives, we can avoid much of the impact of the sunk cost fallacy. As humans, we tend to want to keep doing something because we've invested a lot of time, money, or emtion into it in the past.

But, for the most part, those costs are gone. They're sunk. You can't recover them.

Rather, you have to zero the decision out, ignore the past, take the information you have today and determine if you want to continue what you're doing.

This type of thinking can be extremely challenging and freeing.

I hope it's a useful concept to you!

Joshua

Direct download: RPF0188-Zero_Based_Thinking.mp3
Category:podcast -- posted at: 8:10pm MDT

Today, we continue the Q&A blitz!

Here are the questions I cover today:

  • Do you have any tips or feedback about how to factor a special needs child  when planning for retirement, college, etc?. The typical advice usually is that, typical, once you have a special needs child things change as you dwell into the wonderful world of early intervention, therapies, IEPs, tax planning, etc,  I used to think I would just need to change my assumptions in terms of planning for our son to be with us long way past his 18th birthday, as well as making sure we plan for after we are gone. But I’m sure I’m missing other strategies.
  • I've been working at a major package delivery company for almost 26 years. I was just inducted into the circle of honor. Which means that I have gone accident free for over 25 years. Mind you I drive in New York City. I am highly trained, and pretty good at what I do. Since listening to you, and some other podcasts. I was thinking of starting my own podcast. Driving is something almost everyone does and there really aren't any podcasts on safe driving. Trust me most people don't know what they're doing. The problem I have is exactly what you went through after episode 181. I don't want to argue with people over everything that I say. I don't understand why people can't take the good, and credible information out of a conversation, and leave the bad behind. I don't agree with everything you said, but that doesn't mean I didn't pause,  and think about what you were saying. Kudos to you. I'll be retiring in four years, maybe by then I won't care what anybody thinks. Since I have your attention I have a question. I have a 15 year old son. Who works for his mothers company from home. He he takes home takes home $225 every two weeks. In which she saves about 75% of that. I opened up a brokerage account for him to separate the money from savings, and checking. I spread the money out into four different ETFs. I'm trying to teach him to invest and diversify. The problem I have is he maybe using some of this money, or all of it for college. I'm afraid the stock portion could be a problem, since I know you shouldn't have money in the market you're going to need within 3 to 5 years. Would like to know your thoughts on this situation.
  • During episode 181 you mentioned that you don’t have your money in the markets for moral reasons. Where do you put your money and have it grow in line with inflation or better yet beat it?
  • I very much enjoy your show.  I took in the marathon of show #181.  Thank you for using such controversial material to make your point. There is not enough genuine debate and too much simplified propaganda from all sides in this country. One point that stood out to me from this particular show is your personal approach to investment for your own family.  My question is, if your position on investing in large “Evil” public companies is so strong that you would not personally invest in them, how do you justify working in the financial industry, advising individuals on their investments in those same publicly traded companies?  I’m assuming that you are or will be engaged in that financial advisory role. Could you also please touch on the investment categories that you are or will consider for your family's financial plan (generally speaking of course). Keep up the good work.  Your show continues to be a source of excellent information and your delivery continues to improve!

Enjoy!

Joshua

Direct download: RPF0187-QA.mp3
Category:podcast -- posted at: 3:17pm MDT

I'm continuing my Q&A blitz today. I set out to answer five questions and wound up answering two. Oh well. At least I think you'll enjoy them!

Here are the two questions I cover:

  • What are your opinions regarding real estate investing? Should people invest in real estate? What percentage of the portfolio should it be? Thoughts on wholesaling? Flipping? Etc.?
  • My question is can you walk us through your typical financial planning process with an average client of yours. From the initial conversation to the presentation and implementation. How do you prioritize your recommendations? 

Enjoy!

Joshua

 

Direct download: RPF0186-QA.mp3
Category:podcast -- posted at: 10:00am MDT

Today, I do Q&A and answer these four questions:

  • Joshua, I absolutely cannot get enough of your show. Thank you very much for the effort you put in and the thought provoking product you create! It is worth the voluntary money!I've got a very open ended question: You often talk about journaling and writing to help develop thoughts, ideas, and plans. How does one get started doing this? What should your listeners focus on when getting into the habit of journaling? How often do you write in your journal? Without any framework or place to start, I find myself wanting to move on to other activities. I know it's not a direct financial topic but I believe there is a huge amount of value to the idea of putting your thoughts down on paper and developing them and it is something I'd like to start as soon as possible. It'd be great to hear your thoughts and maybe some tactics you employ to get the most out of your journaling time. Keep up the great work, -Chris
  • 19:52 Joshua, One of the biggest goals I have in my life is to become financially independent. Which is why I came across your Podcast in the first place but I am having a hard time figuring out where exactly to go from here. I just started keeping track of every penny I make and spend so that I can start to budget and plan accordingly (I know I should have done this years ago but I gotta start somewhere!) I am 26 years old and have very little experience saving. I am a compulsive spender but I know I can change my habits with the right motivation and I know that I am still young enough to make a very significant change in my life. I have tried to find something "from the beginning" in your podcast but I havn't yet found one that fits my needs. The questions that I have are things that may seem really basic to anyone who has been financially planning for a while. What do I do with my first savings? Say its only $100 dollars, do I keep it in cash at my house? Do I open a savings account and keep it there? How much should I have saved before I start looking at other options, retirement accounts, etc. Sincerely, Garion.
  • 29:45 Joshua, With regard to “Your Money or Your Life” (I have been reading the book for the past few days.), is the strategy for investment/FI that the author’s put forth in Chapter Nine still valid today, in your opinion. (I apologize if you have covered this already; I am still trying to get caught up with all of your podcasts.) Please keep up the awesome work. -Daniel
  • 36:35 Joshua, First off I just wanted to say I'm a huge fan of the show and your format. It's so refreshing to actually listen to an in-depth discussion of personal finance rather than all the surface level junk online:"The one easy tip for financial freedom." So I hope you never question your long format in the landscape of quick tips and 3 easy steps posts. I've been growing more interested in personal finance/investing. I'm curious if you've ever encountered or heard of families that invest together. Whether it be siblings or siblings and parents investing together. This is something I've been pondering lately. It seems this would be a smart way for families to invest and take advantage of strength in numbers. Perhaps it's not discussed because it's taboo to talk about money at that level of detail. I really have 0 experience in this area so it'd be interesting to hear what some of the benefits/challenges would be of this kind of thing or if you've personally heard of families doing this. Keep up the good work, and know that your work has had an impact on me.Regards, -Ryan

Resources:

Direct download: RPF0185-QA.mp3
Category:podcast -- posted at: 10:00am MDT

I enjoy looking for financial planning tips from odd corners of the world. Recently, I stumbled across the book Financial Freedom aFloat: How to Pocket a Paycheck in Paradise by Charles Tuller as I was browsing the finance section in my local library.

Written for the cruising community, the book lays out some specific ideas and strategies for sailors who either need or want to earn some money to be able to afford to stay out on the water for the long-term.

I'm most intrigued by the challenge of the problem: how do you live a "dream lifestyle" without a lot of money?

The answer is multi-fold:

  1. Own your shelter.
  2. Minimize your ongoing expenses.
  3. Work while you travel.

The last item is the most interesting to me right now.

How do you conveniently integrate work and life without feeling like an indentured servant? How do you earn and enjoy life at the same time?

The book does a good job of laying out some ideas. And, it gets better all the time. There are so many more options availalbe now in 2015 than there were in 2000, when the book was written.

Enjoy the ideas we draw and apply them to your own lifestyle--whether you'd like to cruise or not!

Enjoy!

Joshua

Direct download: RPF0184-Financial_Freedom_Afloat.mp3
Category:podcast -- posted at: 11:35am MDT

Today I handle your questions and comments.

Right off the bat, I respond to some of the sharp criticism of Episode 181. Perhaps it will be useful to clarify my intention with the show material.

Then, I answer these questions:

  • 35:48 Dear Joshua, I have a question regarding a specific method for paying for my children's college education.  Putting aside the merits of a college education in general; and putting aside thoughts that I have no obligation to pay for my children's school....let's assume that I would like to pay nearly all tuition expenses for my three daughters (ages 12, 10, 5). I see 529 plans as piggy banks that I fund, will one day need to break, spend, and never see again. However, striving to create a large enough portfolio of dividend paying stocks seems like a option in which I could pay tuition with the money strictly generated from my investments. Assuming (still a moderately big assumption on my end) that I can create the principal to generate ~$25,000 in dividends at a 4% yield, does this seem like a viable option? -Brian
  • 44:04 Joshua, I am 42 years old and currently have life insurance from my employer. I'm trying to buy life insurance from one of the providers but have the following questions: Should I continue the life insurance at work even after I get from outside? Will the 2 ever be mutually exclusive? Should I search for an agent? If so, are there any websites that can help me find one? Are websites like Accuquote reliable? How else should I compare the products of various providers? -Vikram
  • 1:01:52 Joshua, I wanted to ask you to consider a podcast show around radical ways to lower the cost of owning a home.  Not the typical advice out there,  but more along the lines of buying a property that meets your families needs but that could provide rental income to offset your mortgage too. Cash flow around homes is a large percent of take home for most families - just seems like an area that most people are not considering and could be a significant win. -Todd
  • 1:20:16 Joshua, While listening to Podcast #36 you mentioned changing a 401K plan to be able to defer more than the $17.5K. Can you let me know where I can learn more about this? -Harout

Enjoy the show!

Joshua

  • Support Radical Personal Finance on Patreon: http://radicalpersonalfinance.com/patron
Direct download: RPF0183-Friday_QA.mp3
Category:podcast -- posted at: 12:08pm MDT

I'm fascinated by the topic of asset protection planning. It engages my personal enjoyment of complicated, intricate planning.

It's in important area of planning. But it's also one of the most over-hyped areas filled with sleazy marketing and sleazy business practices.

How do we work through this?

Today, I introduce the topic to you in a down-to-earth, accessible way.

We'll keep a healthy sense of paranoia and a healthy sense of reality firmly together as we traipse through these topics.

Enjoy the show!

Joshua

  • Support Radical Personal Finance! http://radicalpersonalfinance.com/patron

 

Direct download: RPF0182-Asset_Protection_Intro.mp3
Category:podcast -- posted at: 10:51am MDT

Every single aspect of personal finance is influenced politics, religion, and philosophy. Every law and every decision has a moral and ethical component to it.

In modern conversation, we're unaccustomed to talking about philosophy and ethics. We steer away from discussing politics and religion because we're uncomfortable with how we can have a positive relationship with another person even when we disagree.

Or, we might feel unequipped to battle in the world of philosophical or religious ideas.

The problem is that our lives are continuously influenced by others who are battling in the world of politics, religion, and philosophy. And, we're subject to the same moral/ethical code as everyone else is regardless if we want to admit it or not!

Worse still, we don't have the choice of non-participation. Every dollar of tax we pay, every item we buy, every hour we work affects the larger system in some way. By our actions we are supporting or tearing down various systems and causes.

We are either moving the systems that surround us in a certain direction or we are being moved by them.

The final horrific reality is that most of us are untrained in the fine art of sniffing out propaganda and influence. So, we are subject to it. Most of us would be content to simply sit by and live our lives quietly; it's not possible. Because you are in important pawn in others' plans for you.

Today's show is a unique experiment for me in a teaching style. Essentially, I'm trying to accomplish a few objectives in an interesting and challenging way.

  1. I want you to understand the impact that your worldview has on all of your decisions.
  2. I want to demonstrate how one specific worldview (in this case formal secular humanism) impacts the broader culture with its stated objectives.
  3. I want to demonstrate how all of the broader agendas within a governmental system tie back to worldview. Politics are driven by worldview.
  4. I want to demonstrate how propoganda and media are used to promote an idea in the general culture and how incredibly effective that can be.
  5. I want you to see an example of a propaganda effort that has achieved massive cultural change over your lifetime so that you can learn the skills to sniff out other agendas--specifically other agendas that are closely related to finance.
  6. I want you to see and understand that it's completely impossible to disconnect the social aspects of life and their associated moral questions from the daily, practical & financial aspects of life. You've got to be a consistent human being with a clear and consistent framework.
  7. I want you to see and understand how theories change and adjust over time and how society changes throughout history.

I hope you enjoy the show. It's an unusual discussion but it's an important one.

I will be building on the content of this show in future episodes as we sort our way through the swamps of financial movements, theories, and conspiracies in the future.

Let the critical thinking skills commence!

Joshua

p.s., I've tagged this show with the [EXPLICIT] label because of the content and some of the words used. This show is most appropriate for adult audiences, not for children.

Links:

Direct download: RPF0181-Politics_in_Finance_WITH_NEW_INTRO.mp3
Category:podcast -- posted at: 2:21pm MDT

Today, I share with you the framework knowledge of how life insurnace policies actually work. Once you understand these basic concepts you'll be able to look at any type of insurance policy and more easily understand its use.

Topics include:

  • Assessment life insurance
  • Yearly renewable term life insuance
  • Level premium life insurance
  • The factors that affect life insurance policy pricing
  • The five types of life insurance policies

Enjoy!

Joshua

Direct download: RPF0180-2How_Life_Insurance_Works.mp3
Category:podcast -- posted at: 3:52pm MDT

I'm not able to record and release a new show for you today due to the rather pressing deadline of the April 15 tax filing date.

I'm finishing up my return today so I'm releasing an interview I gave on the Anarcho-Yakitalism Podcast with Nick Hazelton.

Nick is a young man who raises yaks and pigs on his farm in the Pacific Northwest. He is 16 years old.

I shared a bit of my story with him and gave him a bit of life coaching on how I think about financial planning and life planning for young people.

This show was originally released on February 24, 2015 on Nick's website.

Enjoy!

Joshua

Links:

 

Direct download: joshuasheatsinterview.mp3
Category:podcast -- posted at: 10:00am MDT

This morning, I put out a note on the Patreon page for questions from the patrons and I received four:

  • 02:38 I'm currently in the "Financial Stability" stage of building wealth. Where do you recommend keeping an emergency fund &/or savings for large purchases?
  • 17:36 My only major financial goal is to buy a small condo in Hollywood in about 6-7 years. I am 33 years old, single and don't plan on starting a family. I have about $170K in investments/retirement and am on track to have an additional 80-90K saved for the condo in about six years. I want to make a 50% down payment on a $200K condo (so basically a 100K down payment).   My dream is to have a super low monthly mortgage payment (around $500 - 600 per month). That would be very freeing for me! I want the flexibility in life + career that low monthly expenses would give me. Am I crazy to make such a big down payment? I know its almost half of my net worth, but it feels right for my lifestyle choices.   I'm tired of being stuck in the super-high trendy-city apartment renting hamster wheel ;) 
  • 30:19 I have a 529 for my oldest son. I am planning on transferring that to my wife as she will be going back to school in August of 2016. She is a teacher, once she graduates with a specialist degree she will receive an automatic $5,000 annual pay raise. We estimate the program will cost $15,000 and can be completed in 18 months-24 months. The 529 plan is currently invested very aggressively (based on our oldest son's age of 6). I am planning on immediately changing the investment to the guaranteed option (1-1.25%). Am I missing any other investment options? We use Georgia's 529 plan which is TIAA-CREF based. It seems an easy choice to me. What else am I missing? Any other thoughts? The current value is $12,700 and we contribute $600 per year. If we are short during the last semester or two, we plan on paying with excess cash flow we hope to save up by then. 
  • 40:34 If you were at a "Financial Stability" stage 3.5 in the US (debt is eliminated and about 50% of basic items are addressed) and were planning on moving overseas for 2 years (in 2 years), what steps would you take to secure your financial future?

Enjoy the show!

Joshua

Direct download: RPF0179-Friday_QA.mp3
Category:podcast -- posted at: 9:02pm MDT

Today's show gives you the tools you need to sit down and calculate an appropriate amount of life insurance coverage for you to own.

On Episode 173, I discussed the three primary ways of calculating an appropriate amount of insurance:

  1. Human Life Value approach
  2. Needs Analysis approach (the best)
  3. Rule of Thumb approach

This show teaches you how to calculate a Needs Analysis.

The process is simple:

What You Want - What You've Got = What You Need

In order to figure out what you want, simply make a list of everything you want for your family in case of your death.

Divide that list into:

  1. Lump Sum needs (immediate cash)
  2. Income needs (ongoing cash)

For the income needs, decide:

  1. How much?
  2. For how long?
  3. Liquidating approach or a non-liquidating approach?

Enjoy the show!

Joshua

Links: 

Direct download: RPF0178-Life_Insurance_Needs_Analysis.mp3
Category:podcast -- posted at: 2:54pm MDT

By popular request, I've invited Meb Faber on the show for an interview. Meb is well known in the investment world for his contributions on tactical asset allocation and trend-following.

In the interview we cover:

  • Meb's background and accidental path into the investment world
  • The philosophy of business behind Cambria Funds
  • How to construct an investment process for individuals
  • True historical rates of return for various asset classes
  • The impact of asset allocation over the long-term
  • How to protect yourself from your behavioral biases

Enjoy the show!

Joshua

p.s., listen to the show for an opportunity to get Meb's most recent book for free!

Links:

Direct download: RPF0177-Meb_Faber_Interview.mp3
Category:podcast -- posted at: 2:04pm MDT

Today I want to share a very simple concept with you regarding practical asset allocation.

If you plot your goals on a simple matrix and plot all of your investments on the same matrix, you'll more easily be able to select an appropriate investment to fund each goal.

Here's the matrix: 

home-run dollars

aggressive dollars

safer dollars

-------------------> short-term -----> mid-term -----> long-term

Enjoy the show!

Joshua

Support the show as a patron: http://radicalpersonalfinance.com/patron

 

Direct download: RPF0176-Practical_Asset_Allocation.mp3
Category:podcast -- posted at: 8:07pm MDT

Friday Q&A shows are fun and today is no exception. Today I answer five questions:

  1. Is there any academic support for the value of financial advisors?
  2. What is the best way to prepare to pass the CFP exam?
  3. What is the fastest way to become a 1%er?
  4. How do you learn to trust insurance people?
  5. What is the role of an IPO within a broader investment portfolio?

Enjoy my answers!

Joshua

Links:

Direct download: RPF0175-Friday_QA.mp3
Category:podcast -- posted at: 3:48pm MDT

You can’t go from broke to rich in a single step. There’s no magic fairy who will suddenly transform your financial life for you. You have to do it yourself.

But you can work your way through a path that leads to financial independence and complete abundance. That path has stages and you should celebrate your progress at every stage!

In today's show, I share with you my ideas regarding the stages of financial independence. I believe this is a useful roadmap to help you navigate from where you are to total Financial Abundance.

Stage 0: Financial Dependence

Stage 1: Financial Solvency

Stage 2: Financial Stability

Stage 3: Debt Freedom

Stage 4: Financial Security

Stage 5: Financial Independence

Stage 6: Financial Freedom

Stage 7: Financial Abundance

My challenge to you is to take these stages, understand where you are, and lay out the numbers of your own situation. How much do you need to be financially stable? What's your number for financial independence? Financial freedom?

Write it down clearly for yourself and then keep working on it!

Enjoy the show,

Joshua

Links:

Direct download: RPF0174-Stages_of_Financial_Independence.mp3
Category:podcast -- posted at: 3:00pm MDT

At long last, we enter into the oft-requested topic of life insurance! Today's show is an introduction to the economic basis and justification for life insurance and it's also an outline of some of the uses of life insurance for individuals and families. (We'll cover business uses another day.)

You also get the joy of a bit of a sales pitch on why I love life insurance planning so much. It's truly an incredible financial product.

Life insurance is founded on the economic value that each of us provide to others and on our moral obligation to provide for our dependents.

Because each of us has an economic value that can be estimated, we can come up with some formulas to understand how much life insurance is appropriate.

The three major approaches to determining an appropriate amount of life insurance are:

  1. Human life value approach
  2. Needs analysis approach
  3. Rule of thumb approach (most popular is the multiple of income approach)

The best of these methods is the needs analysis approach. It balances the need for precision and the need for simplicity quite effectively.

Life insurance can have many uses for individuals and families:

  • Immediate funds:
    • Cash to meet daily living needs
    • Cash to pay expenses associated with death
    • Cash for emergencies, repairs, or replacements
  • Ongoing income:
    • Spouse
    • Children
    • Parents
    • Nondependents
  • Funds to pay debts
  • Funds for death taxes
  • Funds for dependents' education
  • Funds for trusts
  • Funds for charities
  • Funds for gifts
  • Funds to supplement retirement income
  • Funds for home health care or nursing home care
  • Funds to transfer assets to a younger generation
  • Funds to discreetly provide for confidential needs

Enjoy the show!

Joshua

Direct download: RPF0173-Economic_Basis_of_Life_Insurance.mp3
Category:podcast -- posted at: 3:11pm MDT

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

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 1 of an interview I gave on the Family Adventure Podcast with Erik Hemingway. It was released in October 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: JoshuaSheatz.mp3
Category:podcast -- posted at: 8:00pm 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 an interview I gave that was released on September 4, 2014 on the Create My Independence Podcast with Kraig Mathias. It was the first podcast interview I ever gave after starting my show!

It has a good bit of my story as well as some various bits of advice on finance. 

Enjoy!

Joshua

Direct download: 026-cmi-joshua-sheats.mp3
Category:podcast -- posted at: 7:00am MDT

It's Friday and on Fridays, I answer your questions. If you'd like me to answer your questions, please email them to me or call them in on the website.

Question #1:

Joshua,

My father, who is 60 years of age, has become a victim of numerous scams over the last year or two. Generally, they involve him receiving calls that he won some prize and needs to wire some money (usually in $500 increments) to the West Indies, Jamaica, etc. His decision making with his finances is not good, to say the least. He continues to fall for these scams despite being told by numerous family and friends, law enforcement, and bank reps that it is a scam and he is never going to receive any "prize."

His financial situation is as follows... he receives Social Security (Disability) for around $1,400 per month. His expenses are only about $700 per month. He owns a very modest house that is paid off. Also, he has a bank IRA worth about $50,000 (earning a whopping 1.3% fixed) which is a rollover from a 401k he had when he was employed.

In my efforts to help him with his finances I got him to give me Power of Attorney and I was added as a signer on his checking account. I am able to monitor his checking account through online banking. However, I live too far away to proactively keep dad from wiring in money for these scams. All I can do is call Dad after I see he has made a large cash withdrawal from his checking account and ask what it was for. I can tell by his evasive answers that it is usually for another scam.

My question is, how can I prevent Dad from wiping out his IRA and spending all his future social security earnings on the dream of the big foreign lottery prize? Does the Power of Attorney allow me to move the IRA to another financial institution (perhaps an online broker, or something out of state). As it stands, Dad can go down to the local bank an withdraw from the IRA with ease. The account could be wiped out before I had the chance to try to talk some sense into him. Also, is there some way for me to become a custodian of the Social Security payment where I could ensure Dad's needs were met, and had the rest of the funds could go into a savings account in his name? I would welcome any other suggestions you have on this matter.

Your response would be appreciated very much!

Take care,

Jason

--

Question #2: @21:11

Joshua,

How much can one roll into a roth IRA from a traditional IRA?

Is it true that interest earned in the traditional IRA is treated as principles once rolled into the roth and can be withdrawn without the penalty after 5 years?

I really like the variety of your show. keep it up.

Best wishes,

Brad from Utah

--

Question #3: @27:11

Joshua,

A friend (22 y.o. male new grad. just starting his first engineering job) asked me if I had any good resources on investing.

Prior to his question...I sent him your "Become a millionaire working at Walmart" episode as I felt that portrayed a lot of key concepts very well.  I want to recommend another episode that really embodies your take on investing which I think is very helpful....as my friend seems to think investing just means putting money in the stock market.

What would you share with him?

Dustin 

--

Question #4: @38:17

Joshua,

I think I have a unique and "radical" financial situation. I figured with your unique outlook on things and the interesting nature of your show this might an interesting question for you to consider.

I want to be frozen after my legal death and reanimated later. I also want to preserve my wealth so that if/when I am brought back I will gain the benefit of at least many decades of compound interest.

My question is:

How should I fund my being frozen and how should I preserve my wealth in perpetuity after my death till my reanimation?

Details:

I currently have a 20 year term $150,000 life insurance policy. The cryonics organization is set the be the beneficiary. Upon my death they will take my body and fly it to their facility where it will be retained.

The cryonics plan that I have signed up for costs $80,000. I have added the additional $70,000 for any chartered flights that might be needed to be flown or any legal battles that might need to be fought in order to get my body.

I know that the 20 year term will expire and as I am presently 23, I (hopefully) will still be around. I was wondering what I should do long term?

I was considering just using the company's standard trust model and just pumping money into it over the 20 year period.

My insurance rep thinks I should move to a whole life policy.

What are your thoughts?

My second question is in regards to preserving my personal wealth upon death. As I will no longer be a legal person upon death, what is the best way preserve and grow my wealth over the years in such a way that I can claim it upon being reanimated? Ideally I would like to have a revival incentive in order to encourage people to revive me, something along the lines of 20% of the wealth accumulated.

What do you think the best financial instrument would be? A trust? It's a bit tricky as I will not be a legal person after death.

It's an odd question and I appreciate your help,

Thanks,

Caitlin

--

Enjoy the show!

Joshua

Links:

Direct download: RPF0165-Friday_QA.mp3
Category:podcast -- posted at: 8:00am MDT

Years ago I heard of the concept of a hackerspace/makerspace. In essence, a hackerspace is a community-operated physical place where people can meet and work on their projects.

But, the work that can come out of those spaces is far more impressive than that description makes it sound like.

I've wanted to bring you the concept but since I'm not an expert, I needed to do it in the context of an interview. I was thrilled when a listener of the show recommended that I interview Jessica Fong, president of the South Side Hackerspace in Chicago.

In the show, Jessica shares details on:

  • What hackerspaces are and some of the great things that have emerged from them.
  • How their organization was started.
  • Advice for others interested in founding such a venture.

Enjoy the interview!

Joshua

Links:

Direct download: RPF0164-Hackerspaces_Interview.mp3
Category:podcast -- posted at: 2:42pm MDT

I spent years consuming personal finance literature and the idea of saving 10 to 20% of my income was hammered into my head. That is the standard percentage that is recommended to be saved by prudent, diligent people.

I took that number with me into my foray into the financial planning world without ever questioning it. But, somewhere around 2011 I had my world rocked by reading Early Retirement Extreme by Jacob Lund Fisker

The most useful concept I took from that book was the huge connection between savings rates and years to financial independence.

For some reason, I never really connected the percentage of my income I was saving to the actual amount of money I had and what I could do with it. Maybe for you it's intuitive, but it wasn't for me.

Consider this. Have you thought about the fact that:

  • If you save 5% if your income, you can take 1 year off every time you work 19 years.
  • If you save 10% of your income, you can take 1 year off every time you work 9 years.
  • If you save 20% of your income, you can take 1 year off every time you work 4 years.
  • If you save 30% of your income, you can take 1 year off every time you work 2 years and 4 months.
  • If you save 40% of your income, you can take 1 year off every time you work 1 years and 6 months.
  • If you save 50% of your income, you can take 1 year off every time you work 1 year.
  • If you save 60% of your income, you can take 1 year and 6 months off every time you work 1 year.
  • If you save 70% of your income, you can take 2 years and 4 months off every time you work 1 year.
  • If you save 80% of your income, you can take 4 years off every time you work 1 year.
  • If you save 90% of your income, you can take 9 years off every time you work 1 year. 

I never did until I read the Early Retirement Extreme (ERE) book. And it hit me like a lightning bolt.

In the ERE book, Jacob lays out a chart demonstrating the impact of savings rates on the years to retirement and it completely changed my perspective. 

A year or so later the popular finance blogger Mr. Money Mustached published a post called "The Shockingly Simple Math Behind Early Retirement" in which he laid out in chart form the connection between the percentage of income saved and the years to work until retirement.

That chart is powerful.

Since reading that chart I have shared it with dozens of people to empasize the value of controling the major thing they can control, which is their level of expenses.

In today's show I share with you the details of this approach.

Enjoy!

Joshua

Links:  

Direct download: RPF0163-Savings_Rates.mp3
Category:podcast -- posted at: 9:00pm MDT

Traditionally, the knowledge and skills of financial planning were learned by financial advisors on the job. Most financial advisors started as either stockbrokers or insurance salespeople and then moved into financial planning simply as an extension of their career. A common educational path was to simply take the state-required insurance licensing courses and the state-required securities licensing courses and then to take further courses (such as CLU, ChFC, CFP, etc.) only after getting started in the career.

That approach is changing. Today, there are dozens of colleges and universities around the country offering formal financial planning educational programs.

Of course, there are pros and cons to either approach. Today, we dig into some of those factors with an in-depth discussion of the academic side to financial planning with Dr. Nathan Harness.

Dr. Harness is an assistant professor of finance at Texas A&M University - Commerce. He received his Bachelor’s degree in finance from the University of Central Arkansas, Master’s degree in finance from Texas Tech University, and Ph.D. in personal financial planning from Texas Tech University.

His research interests include personal financial ratio analysis, household heuristics and wealth accumulation, and individual stock selection.

He has published in Applied Economic Letters, Financial Services Review, International Journal of Business and Finance Research, Journal of Financial Services Professionals, Financial Counseling and Planning, and the Journal of Personal Finance.

Dr. Harness has taught at the University of Georgia – Athens prior to joining TAMU-Commerce and currently teaches graduate and undergraduate courses in the areas of investments and financial management.

Enjoy the show!

Joshua

Links:

Direct download: RPF0162-Nathan_Harness_Interview.mp3
Category:podcast -- posted at: 8:00pm MDT

I was very saddened to hear on Sunday night that Dr. Tom Stanley, author of the famous book "The Millionaire Next Door" and many others, died in a car accident near his home in Atlanta on Sunday afternoon.

As I reflected on the impact that he and his work had on my life, I came to realize that he probably had a greater impact on my way of thinking than any other personal finance author I can think of.

Not only did he impact my way of thinking, he impacted me personally.

I reached out to him in July of 2009 when I was trying to find resources for how to market my services as a financial advisor to the affluent.

His response was gracious and professional:

--

07/19/09

Joshua,

Can't thank you enough for your kind comments on my blog.  Words like yours sustain me.  Two of the best rated speeches that I have ever given were to The Top of the Table and later at the Court of the Table (as you know part of the Million Dollar Roundtable Association).  Both of those speeches were recorded (audio) and, as I understand it, were distributed by The Million Dollar Roundtable.  I would also suggest that you read the chapter on Beverly Bishop in my book, Millionaire Women Next Door.  And also Selling to the Affluent should be very valuable to you in your work.  I'll know better about my speaking programs in September.  Please continue to check my website for updates.  Regards and much continued success.

Tom Stanley

--

More importantly, he saved me from a very expensive mistake by suggesting a specific car for me to purchase. (Details are in the show.)

--

08/19/10

Mr. Stanley,

One very brief question:  What do you think would be the best kind of car for a financial advisor to drive?

I don't believe in "status" cars.  But I live and work as a financial advisor in West Palm Beach/Palm Beach/surrounding area!  And here, everyone--even/especially the broke people--have status cars.

What should I do?  :)  

Joshua

--

08/26/10

Dear Mr. Sheats:

If I were in your position, I would buy a previously owned Chevrolet Tahoe or the GMC version in white, leather interior with tinted windows!  These cars fit in each and every category of the wealthy.  They are among the most popular cars within the "glittering" rich (very affluent) segments.

Regards,

Tom Stanley

--

His communication was professional, courteous, and emminently helpful. Now that I find myself in the position of a somewhat public figure, I'm striving to emulate him.

I was disappointed not to be able to get him on the show. I had reached out to him for an interview but his schedule didn't allow it at the time. I had hoped to bring him on in the future but alas, 'tis not to be.

In my tribute to him, I have prepared this episode with ten important lessons I learned from him.

  1. I learned who the actual millionaires are.
  2. I learned the difference between wealth and income.
  3. I learned that it's OK to simply be on the way to wealth and that age matters.
  4. I learned to be proud of being frugal.
  5. I learned to choose my spouse very carefully.
  6. I learned not to go with the crowd.
  7. I learned to choose my housing very carefully.
  8. I learned that you aren't necessarily what you drive. Millionaires drive Fords.
  9. I learned how to prepare my children to avoid Economic Outpatient Care.
  10. I learned principles, not rules.

Enjoy!

Joshua

Direct download: RPF0161-Tom_Stanley_Tribute.mp3
Category:podcast -- posted at: 9:00pm MDT

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

144-Friday Q&A: Can I Retire With $1.4M, What Do I Do With Too Much Cash, and Should I do a Roth 401(k) or Traditional 401(k)?

Today, I bring to you three very fun but straightforward questions. Here they are:

Question #1: @01:56

Dear Joshua, 

My wife and I are well read in the areas of index fund investing, frugal living, early retirement, and financial independence (including your podcasts).  We have been on the path to early retirement for many years and we think we are there.  We both have high stress jobs and want to quit to raise a child and do whatever interests us whether it brings additional income or not.  We want to have a significant financial cushion, but also don’t want to be so conservative that we work years longer than necessary.  We are worriers and are very conservative in our estimates.

Although we are fairly confident in our calculations for early retirement timing, we hired a fee only financial planner for an outside opinion, and the experience was positive, but we believe the timing recommended was extremely conservative (4 years from now without a child; 5-6 years from now with a child).  We have a very good handle on our spending as we have been tracking it closely for several years.

The financial planner did not seem to understand our frugal lifestyle and rather than reducing our current spending by the “cost of working” that we clearly communicated, he added $15,000 per year to our current spending, which significantly changes the projections for retirement.  The explanation given was to account for “unexpected expenses”, but that amounts to >$20,000 per year in excess of our retirement spending estimate below.  We would be very grateful for your opinion of our plan to retire NOW, given the following data, which we have abbreviated to the most important points.

Ages: Him-45, Her-37

Debts: None (own a house and 2 cars free and clear)

Assets ($1,300,646)
$714,200 – His/Her TSP (Federal 401k)
$347,554 – Taxable Account (Vanguard Index Funds)
$216,165 – Cash/I-Bonds
$22,727 – His/Her Roth IRA
$31,000 – His Pension (starting at age 60)
$6,000 – Her Pension (starting at age 62)
(Minimum of $100,000 net after moving and downsizing our house – not included in assets total above) 

Asset Allocation:
40% Total US Stock Market (Vanguard/TSP Index Funds)
12% Total International Stock Market (Vanguard/TSP Index Funds)
33% Bonds (TSP G Fund)
15% Cash (CDs)

Spending:

Current Spending: $45,000
Retirement spending estimate $37,000
*This is after removing the easily calculated “costs of working” ($10,000 in property tax!; $3,000 in gas!) and adding estimated cost of health insurance ($5000?)
Note: We will be moving from a very high cost area (suburban Chicago) to a very low cost area (rural Florida)

Question #2 @26:20

Joshua,

Came across your podcast and dig the advice/honesty.

I've read numerous articles encouraging the use of fee-based financial advisors but haven't had a lot of luck finding the right person.. discouragement set in after numerous canned responses/what seemed like aggressive sales tactics.

I made somewhat of a half ass attempt in my early 20s with regularly maxing out a roth/always contributing enough to various company 401k to get the contribution match.

I've not paid a lot of attention and recently realized I'm holding roughly 50% of my total assets in a standard savings account yielding only 1%.

Without pulling the actual figures that'd be ~90k in retirement accounts Roth/Traditional rollover and ~90k in straight up cash... terrible I know.

My question is how do i fix/prevent it? I currently have one investment property with a mortgage that's less than what it's leasing for.

I see a couple fix it options:

Buy another house 

Pay down existing mortgage

Invest outside of a retirement account

I believe adjusting my 401k contribution may be a start to preventing it but what about after I max it out?

I don't mind paying for advice but what I really want is someone that's hands on/up to date.. helping me get the most out of my money.

Question #3: @46:37

Joshua

My name is Joe and I’m 24 years old.  I’ve been listening to your show for a while now and really enjoy it, keep up the good work.

My question has to do with whether or not a Roth 401k is the right move for me.  Currently my gross income is $58,616.  This year, I’ve contributed 6% of my AGI into a regular 401k and my employer matches .80 cents on the dollar up to the first 5% of my pay. ($3,517+$2,344 = $5,861)  I also contribute to my Roth IRA and will max it out at $5,500.

My employer just recently began offering a Roth 401k option and my question is whether or not it is the best move for me to make to begin contributing to the Roth vs the regular 401k?  I understand the tax benefits on the front end at my young age and do believe taxes will rise in the future and also that I will hopefully be in a higher tax bracket in retirement than I am now.  In my mind, the advantage of the Roth is the higher contribution limit (18k vs 5,500) but the advantage of the Roth IRA is I have it at Schwab and have lower fees and more investment options than inside my 401k.  I would like to keep my net take home pay the same and am having trouble running the math to figure out which would be the better option.  In addition, I have the option to do a Roth 401k conversion on the $12k that’s in my Regular 401k.  Your advice would be much appreciated.  

About me:

Assets: $27k in Roth IRA, $12K in 401k, $3k in taxable investment acct, $6K in savings acct, $2k in checking acct

Debts: $41,200 Federal Parent PLUS @ 7.65% and $16,500 @ 5.25%. I currently am on the standard repayment plan (10 yrs) and make an extra $100 payment each month on top of that. No credit card debt or any other type of loan, own a 2005 Camry that is paid off.

***

Enjoy the show!

Joshua

Direct download: RPF0144-Friday_QandA.mp3
Category:podcast -- posted at: 6:26pm MDT

143-Intro to Self-Directed IRAs: How to Invest In Real Estate, Tax Liens, Physical Gold and Silver, Structured Settlements, Horses, Livestock, Farmland, Timberland, and More In Your IRA

I've been looking for an expert on self-directed IRAs to bring on the show and I was thrilled to meet Kirk Chisholm at FinCon last year.

Kirk is an expert in both the self-directed IRA niche and the alternative investments world. His firm, Innovative Advisory Group, helps serve clients in this space with advice.

Self-directed IRAs can be a powerful tool in your arsenal. Just think of the magic of Mitt Romney's $100,000,000 IRA!

When you combine an IRA with alternative investments, you might really be able to work some magic.

What is an Alternative Investment?

Well, right from Kirk's site: "The term “alternative investment” has become a trendy term in the financial services industry to describe new approaches to investing. It is frequently used to describe different asset classes or investment types such as: hedge funds, structured products, managed futures, or even Timber REITs. If you describe traditional assets as stocks, bonds and mutual funds, then by contrast everything else is an alternative investment.

"We look at the term “alternative investments” differently. We take a step beyond the current industry definition and use it to describe assets or investments such as physical real estate, tax liens, physical gold and silver, structured settlements, horses, livestock, farmland, timberland, and more. We would characterize alternative investments as an asset or investment which is: not publicly traded, has a low-correlate to most traditional investments, is too small for institutional investors, is illiquid, is not easily able to be securitized, or is not reliant on the publicly traded markets to be profitable.

"The characterization of what is a suitable asset for diversification purposes is a fluid concept. Some asset classes, which have traditionally provided a low or negative correlation to other assets, have become much more highly correlated since early 2000. Asset classes such as managed futures, timberland, farmland, and certain types of hedge funds in the past did provide a low correlation to the traditional markets, however, due to a higher level of institutional interest in these areas, as well as changing market conditions, they have become more highly correlated to traditional markets. This minimizes the effects of diversification as a risk management tool."

This interview is super fun and super deep.

Enjoy!

Joshua

Links:

Direct download: RPF0143-Kirk_Chisholm_Interview.mp3
Category:podcast -- posted at: 8:38pm MDT

142-One Possible Business Model For an Ethical Financial Planning Practice Serving Middle-Income Families

I designed a potential financial planning practice structure a year or so ago. It has been my backup plan if Radical Personal Finance were unable to be financially productive. (It's probably still a backup of a backup.)

In light of the Episode 139: "My Advice for People Interested In Getting Into Financial Planning," I decided to follow up with some specific ideas for a practice I considered creating.

Here are my ideas. 

The show includes a discussion of:

  • The problem of providing planning for middle-income households
  • The idea of a planning model for a monthly fee
  • How to align advisor and client incentives
  • The benefits of a virtual financial planning meeting
  • The importance of having a clear marketing plan for your practice
  • Ideas for building trust
  • The importance of demonstrating expertise
  • The importance of a niche market focus
  • Limitations on income with this model

Enjoy the show!

Links:

Direct download: RPF0142-Proposed_Financial_Practice.mp3
Category:podcast -- posted at: 8:13pm MDT

141-Establishing a Success Mindset In Preparation for Urban Farming: Interview with Curtis Stone

The most popular episode--by a long shot--of the Radical Personal Finance podcast is Episode 40: "Making $80k on 1/3 Acre With an Urban Farm Without Owning Land? Yes, Please! Interview With Curtis Stone."

Today, Curtis is back for another appearance.

We set out to record a show with a basic overview of how to get into urban farming with some practical steps lined out.

The first step is to get your mindset right. Although our interview got stuck on step one, it wound up being a fascinating discussion of business principles.

We discuss:

  • Setting intelligent goals for urban farming
  • Focusing on a triple bottom line: 1) economic 2) social 3) environmental
  • The value of education and especially specific, focused education

I hope you enjoy!

Joshua

NOTE: Curtis is on the road over the coming weeks with seminars in Florida, California, Washington, British Columbia and Mexico. Details are here: http://www.greencityacres.com/events/

Links:

Direct download: RPF0141-Curtis_Stone_2nd_Interview.mp3
Category:podcast -- posted at: 7:19am MDT

On Fridays, I answer your questions! And, even though this is going out on Monday, I still answer your questions! :)

Today, I handle these four questions:

  1. What practical steps can a couple take when planning for one spouse to stay at home?
  2. Is it wise to borrow money on a paid-off house to fund a real estate investment?
  3. How should I factor a defined-benefit pension plan into my asset allocation plan?
  4. How should I set my personal financial goals and pull my life back together after a divorce?

Enjoy!

Joshua

 

Direct download: RPF0140-Friday_QA_Marriage.mp3
Category:podcast -- posted at: 8:05pm MDT

At this point, I'm honored to get about an email a week from someone asking about how to get into the financial planning business. Sometimes, I get multiple emails in a day!

Here are four examples that I mention on the show today:

  • Hi Joshua, I consider personal finance and financial planning a hobby and I dole out my amateur advice to friends, colleagues and family. A little bit of background -- I'm 25 years old and currently working as an auditor in big 4 in my third year and I've just been early promoted to Senior Associate.  The thing is I don't see myself auditing forever and I really want to get into financial planning.  My plan is to start taking the courses for the CFP in May/June 2015 after my busy season is over.  I feel secure in my job but I just don't love it.  Do you have any advice for a 20 something wanting to transition to a career in financial planning with zero experience?
  • Hi Joshua, I’m writing because I’d love to get your insight in a career as a financial advisor.  A little background on myself, I’m a 28 year old CPA who has worked as an auditor at a large CPA firm for the past 4 years.  I’ve been thinking about making a career change, and given my interests I’ve begun looking into possibly starting a career as a financial advisor.  I really enjoy the technical side of financial planning, including the tax side of planning, but am also enjoying learning about the investing side as well. In talking with a few other people, I have heard that being a financial advisor is basically a sales job where you are asked utilize your own contacts to push financial products on.  What I have heard is basically the only way to make money is to have rich friends or family to get established.  I really like the fact that I could be helping people, but the cold calling/pushing financial products on people does not sound appealing.   Also, I don’t believe I have the wealthy contacts needed to get established. I would love to get your insight on this matter, and to hear if the stories I hear about careers as a financial advisor are correct.  Additionally, I would love to hear any recommendations you would have for somebody looking to get into a career as a financial advisor.
  • Hi Joshua, In 2013 I became completely obsessed with all things finance. I first picked up books about "stock picking" because I thought that was the way to go, but within a month or two I was recommended The Intelligent Investor, and I've been going with the "boglehead" strategy since then. I have been very lucky in getting a job straight out of college that pays quite well (software industry) and since I started in July 2013 I've saved 70-80% of my take-home income. I figure within 2015 I will become "FI" at age 25. I've been listening to your podcast daily since I discovered it last month, and needless to say it has quickly become my favorite podcast. Keep up the awesome work, I listen to every new episode! I am interested in becoming a fee-only financial planner. Every time I get the opportunity to talk with someone who is also interested in finance (believe me, this is super rare!) I get very excited. Nothing makes me happier, basically. I have a bachelor's degree in Computer Engineering right now. I am wondering, what is the shortest path that I could take to get to the place where I can "hang out a shingle" and start advising people for a small fee? I am not interested in charging for "assets under management"; I simply want to share knowledge with people so they can make their own investments and financial decisions. I want to do the opposite of most advisors basically! I'd be okay charging very little money for just a consultation, because I will be FI. You mentioned in one episode that you got a master's degree in financial planning, and I know you need the CFP certification. With just my bachelor's degree, could I get this CFP and start taking clients? Or would I need other certifications as well?
  • Hi, Joshua, I have realized over time that I am a poor candidate for the traditional early retirement, and instead, would like to focus my next 15-17 years (roughly age 52-67) on doing something that I like--be it an administrator in a medical business that I believe in, being a health coach for middle age guys trying to get back into shape, or opening a gelato shop in my neighborhood. Actually, my dream job would probably be selling tickets in a booth at a ski resort! Maybe later... I have also thought about becoming a personal finance coach or advisor for docs. I see them make stupid mistakes all the time. I could probably do a series of podcasts on stupid things my partners have done. 

It's a great question and there are a bunch of ways to answer it. I decided for today to focus on the big picture answer which is primarily about having a good fit between your skills, your firm, your firm's abilities, and your prospective clients.

I might do another show on the actual steps needed to set up a firm if you want to do it independently.

In this show I go through:

  • Historical practice models for financial planning
  • Current practice models
  • The importance of sales and sales skills
  • Why you need to know what you bring to the table as a planner
  • The importance of a great marketing plan
  • The importance of a solid transition plan
  • The importance of gaining clarity on what you want to do, who you want to work with, and how you want to work with them

Enjoy!

Joshua

 

Direct download: RPF0139-Advice_for_Getting_Into_Financial_Planning.mp3
Category:podcast -- posted at: 4:00pm MDT

We're continuing our college series with an in-depth discussion of 529 plans.

529 plans are incredibly popular in all their permutations. (Many people who are currently participating in a 529 plan don't actually realize it because they refer to it as a pre-paid tuition program.)

They're also under attack. President Obama's most recent budget proposal targeted them for change. (It also targeted Coverdell ESAs.)

Personally, I think 529 plans are often misused and mis-applied. The majority of the mass affluent who participate are simply not getting a huge benefit in exchange for giving up the freedom and flexibility of the money.

But, there are a number of things that can be done with these accounts that are really unique.

Enjoy part 1 of our class today and learn:

  • What the differences are between various types of 529 plans.
  • Who they're a great fit for.
  • How to use them to pay for travel and real estate tax-free.
  • The history of the legislation affecting these accounts.

Enjoy!

Joshua

Links:

Direct download: RPF0138-529_Plans_Pt_1.mp3
Category:podcast -- posted at: 1:02pm MDT

137-Ideas To Make More Money on the Side: Interview with Nick Loper from Side Hustle Nation

As we rattle around and around the iron triangle of wealth (income, expenses, and intelligent use of the difference), we come today to the topic of income. Specifically, how can you create some extra income?

The world is changing and there are more opportunities to earn some money from a side project than ever before. No longer are you limited to throwing papers early in the morning or delivering pizzas in the evening; now, you can work in all kinds of interesting ways with people from all over the world.

Listen to today's show and enjoy some of the ideas. But, if none of the ideas appeal to you, use them as a jumping off point and create your own idea.

Enjoy!

Joshua

Links:

Direct download: RPF0137-Side_Hustle_Nation_Interview.mp3
Category:podcast -- posted at: 3:54pm MDT

We need to get into some economics today and I'm going to do some prognosticating. This is a very rare event on the show, so here goes!

Prediction: there will be a global recession in the future. And gas will go up to $20/gallon.

Now that we have that out of the way, let's talk about what we can do to get ready for it! After all, that's the only thing that likely matters to you or me.

One of the keys to being financially successfully over the long term is to avoid the big mistakes. One big mistake (of many) might be getting laid flat by the coming recession and increase in gas prices.

Today I share with you some thoughts on some of the things you can do today to prepare for this eventuality.

I hope these ideas are useful to you!

Joshua

Links:

 

Direct download: RPF0136-Gas_Prices.mp3
Category:podcast -- posted at: 3:14pm MDT

135-Be Confident in Your Unique Offering and Then Stick To Your Knitting

Today's show is a bit of a pep talk--for you but also for me! 

We are taught by society to compare ourselves with other people. Even though we're all supposed to be "unique and different, we're really not. After all, we're measured on our weight as a baby (compared to all other babies), our grades as a student (compared with our class ranking), and the amount of money we make and have (thus defining us as successful)!

Well, let's challenge that a bit. Sometimes we need a reminder to forget about what everyone else is doing and focus on what we're doing and why we're doing it.

Join me today for a bit of a pep talk. I hope you find it encouraging. I was encouraged as I created the show.

Joshua

Here are the influences on today's show:

  1. Farnoosh Toorabi's new podcast.
  2. This chapter in Richard Feynman's book: "The Chief Research Chemist of the Metaplast Corporation.
  3. Gary North's publication today of his free new book "The Covenantal Structure of Christian Economics."

 

Direct download: RPF0135-Be_Confident.mp3
Category:podcast -- posted at: 2:39pm MDT

134-Q&A: Incorporating in California vs. Wyoming (or Nevada or Delaware) and How to Decide Asset Allocation for an Investor in Sri Lanka

Q&A continues with two very interesting questions today:

  • 2:30 "Should I incorporate my business in California or in Wyoming? Also, for my son, should I establish a corporation for my 16-year-old son?"
  • 33:26 "I live in Sri Lanka and have some money saved. How should I decide my asset allocation strategy?"

Enjoy the show!

Joshua

Direct download: RPF0134-QandA_on_WY_Corp_and_Sri_Lanka_Inv.mp3
Category:podcast -- posted at: 11:58am MDT

133-Q&A: Paying off Your Primary Mortgage With a HELOC (Mortgage Acceleration) and How Safe is My Deferred Comp Program?

We're continuing our Q&A series this week and today I handle these two questions:

  • 00:01 Melissa heard about an idea of using a HELOC to pay off your primary mortgage as a method of paying off the loan faster and saving interest costs. This was referenced in the book "Master Your Debt" and the website TruthInEquity.com.
  • 38:13 Robert asks about the safety of the deferred comp plan that he and his wife participate in at her Fortune 500 Public Utitlity company.

Enjoy the show!

Joshua

Direct download: RPF0133-QandA_on_HELOC_Strategy_and_Deferred_Comp.mp3
Category:podcast -- posted at: 3:02pm MDT

132-Q&A: Thinking Through Buying Life Insurance on Your Kids' Lives and Clarification on 72(t) Substantially Equal Periodic Payments for Retirees

When I started recording the show, I planned to answer six questions. But, after finishing the first question and realizing how in-depth the show would be if I covered all six in one show, I decided to break it out into multiple shows.

Today, I cover these two questions:

  • 8:41-I'm thinking about buying life insurance on my two kids' lives. What do I need to know?
  • 47:53-Will it work for me to use the 72(t) rules to retire at 50 and then change the payment terms at 59.5?

Notes-Life insurance for kids:

  • This is one of the most controversial areas in finanancial planning so I'll try to fairly represent the various points of view.
  • It's tough to have a low-key discussion here because it's such an emotionally intense subject.
  • There are three major philosophies that I've discovered:
    1. Buy lots of life insurance to protect your investment in your kids.
      • Few people in the US will go for this one; much of the world will understand it though.
      • The reality is more and more of us will in fact be depending on our kids as we age due to many factors including the amount of savings most retirees have and financial challenges facing social security and medicare.
    2. Buy just the minimum amount of insurance to cover burial costs.
      • The problem here is that the rich and middle class don't really need it and the poor often don't think of it and can hardly afford it.
      • It's also simply not very high as a priority due to the relatively low risk. Consider this model: http://radicalpersonalfinance.com/do-i-need-insurance-a-mental-model-to-analyze-methods-of-dealing-with-risk-rpf0091/
    3. Buy some insurance for now and as a hedge for the future.
      • Hedge for the future with an Additional Purchase Benefit.
  • How to actually buy the policy?
    • The advice is conflicting.
    • People say to buy term policies for kids. But I've never been able to find a company that will sell a stand alone term product on a minor's life. (Let me know if you know of one, please.)
    • If you're buying a big policy (#1 above) and your child is over 18, it's easy. Buy an Annual Renewable Term policy for them.
    • If you're buying a big policy (#1 above) and your child is under 18, it's harder. If you want to get closer to term coverage, consider a stripped-out universal life policy. If you have the cash flow, go with a traditional whole life insurance contract. Make sure it's a contract that your kid will be happy owning forever. Shop carefully.
    • If you're buying a simple burial policy (#2), do it as a term rider on another policy. You can get these at work, bundled with a banking or property and casualty insurance product, or as a rider on your own term policy.
    • If you're hedging now and later (#3), buy a small whole life policy with an Additional Purchase Benefit. That way as health, hobbies, and occupations change, your child will be able to buy more insurance if necessary. Shop carefully.

Notes-72(t) Calculations

  • Use this calculator to get an indication of the numbers: http://www.dinkytown.net/java/Retire72T.html
  • IRS info: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments
Direct download: RPF0132-Q_and_A_on_life_insurance_and_72t.mp3
Category:podcast -- posted at: 8:07pm MDT

131-Filter Your Financial Advice Through the Lens of Scale

I read a lot of financial advice from many different perspectices. I also frequently am asked about financial advice. "Is this a good idea?" "What do you think about this investment idea?"

Over the years, I have noticed that I have developed a filter that many people don't have: I view all financial advice through a filtering lens of scale.

When I hear advice, I don't immediately accept is a blanket statement; rather, I think, "what type of household profile would this be appropriate for?"

When I talk to someone who's asking for financial advice, I try to ascertain where they are in their financial journey so I can give them the most appropriate advice.

Having this filter helps me to give advice that matters. It also helps me to coach myself more effectively by identifying where I am in my own journey so that I can focus on the things that are most appropriate for me.

In today's show I share with you many examples, including:

  • Buying large commercial real estate can be a great investment. But is it right for you? Should you be buying low-dollar mobile homes instead?
  • Investing in low-dollar real estate can be great. But is it right for you? Should you be buying larger commercial projects instead?
  • Investing in stocks of publicly traded companies can be a great plan. But is it right for you? Should you be investing in the tools of your trade or business so that you can be more effective at work?
  • Investing in the tools of your trade or business can be a great idea. But is it right for you? Has it reached the point of diminishing returns and now you'd be better served by investing in the stocks of publicly traded companies to get you closer to your financial goals?
  • Etc.

Enjoy the show!

Joshua

 

Direct download: RPF0131-Lens_of_Scale.mp3
Category:podcast -- posted at: 9:30pm MDT

130-My Personal Development Plan for 2015

I like the change of the calendar year. It's a convenient time to sit down and take an inventory of where things are and assess the plans for where things are going.

2014 was an awesome year. It was certainly one of the more challenging times of my life and was filled with change of all types. But it was awesome.

2015 will be transformative. This year, I'll be heavily focused on stepping up my game and making everything I do to be world class.

I have plenty of goals. But for me, the end result of achieving a goal is less important than who I become on the way.

Also, since there's no way for me to achieve a lofty goal without developing as a person, I tend to focus less on the goal or outcome and more on the plan of what I need to learn and who I need to become.

In today's show I share with you some of my areas of focus for 2015 and some of the plans I have for my personal development.

Here are three of my areas of focus for the coming year coupled with some of my action plans for development as an example with resources:

  1. I am a world-class business owner.
    • In order to be a world-class business owner, I need to sharpen and hone my personal productivity skills.
    • In order to be a world-class business owner, I need to strenthen my habits in these areas:
      • Work from a list of prioritized importance.
      • Plan each day's work in advance.
      • Complete my weekly reviews, without exception.
      • Complete my comprehensive monthly reviews, without exception.
    • In order to be a world-class business owner, I need to establish new skills and a new comfort level with outsourcing and team building. I also need to focus on automation and systematization.
      • Chris Ducker
        • Read Virtual Freedom and implement/test ideas
        • Read his blog archives and implement/test ideas
        • Listen to his podcast archives and implement/test ideas
      • Sam Carpenter
        • Read Work the System again and implement/test ideas
        • Read his blog archives and implement/test ideas
      • Ari Meisel
        • Read Less Doing and implement/test ideas
        • Read his blog archives and implement/test ideas
        • Listen to his podcast archives and implement/test ideas
      • Tim Ferris
        • Read Four Hour Workweek, Four Hour Body, and Four Hour Chef again and implement/test ideas
        • Read his blog archives and implement/test ideas
        • Listen to his podcast archives and implement/test ideas
    • In order to be world-class business owner, I need to build new skills with Wordpress on my site and other aspects of internet business.
      • Wordpress
        • Look for Wordpress training and complete
      • Membership software
        • Look for membership software training and complete
      • Aweber
        • Look for Aweber training and complete
        • Look for email marketing training and complete
      • Screencasts and video production
        • Look for screencast solution and create presentations
  2. I am a world-class podcast host.
  3. Radical Personal Finance is a world-class financial education resource. 
  4. etc... (listen to the show!) 

Enjoy!

Joshua

Direct download: RPF0130-2015_Personal_Development_Plan.mp3
Category:podcast -- posted at: 11:14am MDT

Teaching Canadians to be Financially Independent By Age 45: Interview with Timothy Stobbs, Author of Canadian Dream-Free at 45! RPF0129

As we begin a new year, I think it's fitting to start with a discussion of financial independence!

My desire for all of you is that you may experience financial independence as you define it and that you may establish a workable plan this year toward its achievement.

Tim Stobbs is right in the middle of his financial independence plan. After stumbling across the idea of early retirement/financial independence, he was awakened to the possibility that an ordinary person could achieve it. 

He set out a plan and started following it. He's now ahead of schedule!

Along the way, he wrote a book to teach others how to accomplish the same goal.

Topics include:

  • Tim's personal plan
  • Details on how to use Canadian retirement accounts to maximum effect
  • Flexible work schedules and alternative working arrangements
  • How financial independence (even partial) can lead to the easier achievement of other goals
  • How having savings impacts the ability to get better jobs

Enjoy the interview!

Joshua

Links:

Direct download: RPF0129-Tim_Stobbs_Interview.mp3
Category:podcast -- posted at: 7:14am MDT

The Financial Advisor Who Can't Retire: Interview with Paul Merriman RPF0128

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:

 

Direct download: RPF0128-Paul_Merriman_Interview.mp3
Category:podcast -- posted at: 5:51am MDT

Money Advice For Teens: Interview with Eva From Teens Got Cents RPF0127

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:

Direct download: RPF0127-Eva_Teens_Got_Cents.mp3
Category:podcast -- posted at: 4:59am MDT

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:

 

 

Direct download: RPF0126-Jeff_Sustainable_Life_Interview.mp3
Category:podcast -- posted at: 5:59am MDT

Establishing Rites of Passage to Ease the Transition to Adulthood: Interview with Dr. Vern Poythress RPF0125

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:

Direct download: RPF0125-Vern_Poythress_Interview.mp3
Category:podcast -- posted at: 5:31am MDT

Designing Human Habitats for an Abundant Lifestyle: Interview With Ben Falk, Permaculture Designer and Founder of Whole Systems Design RPF0124

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:

Direct download: RPF0124-Ben_Falk_Interview.mp3
Category:podcast -- posted at: 4:54am MDT

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:

Direct download: RPF0123-Friday_QandA.mp3
Category:podcast -- posted at: 12:55pm MDT

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

Direct download: RPF0122-Rawles_on_GeoArbitrage.mp3
Category:podcast -- posted at: 1:57pm MDT

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.
Direct download: RPF0121-Last_Minute_Tax_Planning.mp3
Category:podcast -- posted at: 3:33pm MDT

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:

Direct download: RPF0120-Scott_Young_Interview.mp3
Category:podcast -- posted at: 6:44pm MDT

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:

Direct download: RPF0119-Schaub_Interview.mp3
Category:podcast -- posted at: 8:10pm MDT