2020-08-21_Friday

00:00:00.000 | The holidays start here at Ralph's with a variety of options to celebrate traditions old and new.

00:00:06.000 | You could do a classic herb roasted turkey or spice it up and make turkey tacos.

00:00:10.000 | Serve up a go-to shrimp cocktail or use Simple Truth wild-caught shrimp for your first Cajun risotto.

00:00:17.000 | Make creamy mac and cheese or a spinach artichoke fondue from our selection of Murray's cheese.

00:00:22.000 | No matter how you shop, Ralph's has all the freshest ingredients to embrace all your holiday traditions.

00:00:28.000 | Ralph's fresh for everyone.

00:00:30.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now,

00:00:37.000 | while building a plan for financial freedom in 10 years or less.

00:00:40.000 | Today is Friday, August 21, 2020.

00:00:42.000 | And today we have live Q&A.

00:00:46.000 | And just like last week, I still can't find my music.

00:00:49.000 | I've been in the middle of a computer shuffle and I misplaced one of the more important files.

00:00:53.000 | So we'll see if we can get that back by next week.

00:00:55.000 | But we'll get started every Friday that I can arrange the technology.

00:00:59.000 | I do a live call-in show, live Q&A show.

00:01:01.000 | It works just like call-in talk radio works where I've got a phone number with a bunch of calls and I open it up and we chat about anything that is on your mind.

00:01:08.000 | If you'd like to join me on next week's call, the way that you gain access to this is to support the show on Patreon.

00:01:12.000 | You can do that at patreon.com/radicalpersonalfinance.

00:01:15.000 | Just search for Radical Personal Finance on Patreon and you will find me, patreon.com/radicalpersonalfinance.

00:01:21.000 | We begin with Peter in New York.

00:01:23.000 | Peter, welcome to the show. How can I serve you today, sir?

00:01:25.000 | Hey, Joshua. I'd hum the intro song for you, but I only know how to do it on double speed.

00:01:31.000 | There we go.

00:01:32.000 | That might be a problem.

00:01:33.000 | I've got a copy of the file, but it's got dubbing over it.

00:01:37.000 | I've spoken over it and I cannot find the original one.

00:01:40.000 | I've been swapping computers around and it's amateur hour, I guess, today.

00:01:43.000 | Let's see if we can do better with the financial planning than we can with the music.

00:01:46.000 | How can I serve you, sir?

00:01:47.000 | Seriously.

00:01:48.000 | I am going to be a new homeowner coming up soon.

00:01:52.000 | I was just curious about some pointers you might have for some basic prep or preparation things.

00:02:02.000 | Nothing too crazy, but things like redundancy for power and stuff like that.

00:02:08.000 | Just some basic stuff that you thought would get the average person off the ground.

00:02:14.000 | Not the crazy tinfoil hat, not the hope it all works out, but just the median homeowner.

00:02:21.000 | Sure.

00:02:22.000 | That's a great topic.

00:02:24.000 | First, I want to always emphasize, as I always try to do whenever I discuss preparedness,

00:02:30.000 | that the best preparedness is usually financial.

00:02:35.000 | With your home purchase, the first thing to make sure is that you're not buying too much house,

00:02:41.000 | that you're not putting yourself in a situation where you're going to be strapped for cash,

00:02:46.000 | because that's where things become really, really difficult.

00:02:49.000 | Especially when you buy a house, there's so many expenses associated with it

00:02:53.000 | that a lot of times people go too far.

00:02:56.000 | They purchase too much house.

00:03:00.000 | When they do that, they find themselves house rich or house poor, I guess is how we say that.

00:03:07.000 | They don't have any money left.

00:03:09.000 | If you have money, you can solve the vast majority of problems.

00:03:13.000 | I always begin with finances, because finances really are the best tools.

00:03:18.000 | If you look at people who face difficult problems, if they had money,

00:03:23.000 | the vast majority of the times money can solve that.

00:03:26.000 | Even in an actual emergency, even if there's a bad snowstorm or a hurricane comes right through your town,

00:03:31.000 | if you have money, you can usually solve your problems.

00:03:34.000 | You want to have money.

00:03:36.000 | Then what I emphasize as part of having money, not only should you have money in the bank,

00:03:42.000 | but you should have access to multiple forms of money.

00:03:45.000 | When I teach preparedness, I labor on this.

00:03:48.000 | Simple things like having multiple credit cards with high credit limits available to you

00:03:53.000 | and stashing those credit cards in multiple places.

00:03:56.000 | If you buy a house, the first thing that you should do is put a spare credit card in the medicine cabinet

00:04:01.000 | or put a spare credit card and tape it under the drawer of your desk, something like that.

00:04:05.000 | You can always have access to a credit card, which gives you spending power.

00:04:09.000 | Then, of course, having physical currency is really, really valuable.

00:04:13.000 | I encourage people, as long as you live in a situation where you don't have roommates that might steal from you

00:04:20.000 | or if you can put in place the--protect your cash,

00:04:25.000 | you want to make sure that you stockpile some physical currency in a place that's accessible to you.

00:04:31.000 | It needs to be safe, but it needs to be accessible to you.

00:04:33.000 | For most of us, that would be our home, and so you can get creative with how you hide and how you secure that money.

00:04:41.000 | But if you do that, you've done the majority of the preparations that the vast majority of people would ever need.

00:04:48.000 | When you get into preparations, many people have this--they go very far overboard in their thinking

00:04:54.000 | because they just think, "Well, I've got to be 100% on me,"

00:04:57.000 | when in reality, people face emergencies day and all the time.

00:05:02.000 | Usually, if you've got money, then that solves it.

00:05:07.000 | The second most practical thing is related to money is insurance, making sure that you're properly insured.

00:05:13.000 | In order to do that, you go through the thinking process of buying a house that's going to be easily insured,

00:05:19.000 | not buying a house in a floodplain, for example, choosing a house that's well-built.

00:05:23.000 | All of that stuff is the cornerstone, the foundation of preparedness.

00:05:28.000 | It's the practical preparedness that really makes sense.

00:05:31.000 | Now, most people don't think of that as preparedness, but what I've always sought to do is bring that together

00:05:37.000 | and demonstrate that the stuff that you read about in Money magazine or the stuff that you hear on a personal finance podcast

00:05:44.000 | is preparedness at its core. It is preparedness.

00:05:47.000 | It's just preparedness in the financial realm.

00:05:50.000 | Now, let's say that you move on to physical preparedness, and you acknowledge the fact that sometimes money doesn't work.

00:05:57.000 | Most of the time, money does work, but sometimes money doesn't work.

00:06:01.000 | So what do you want to do to be prepared if money doesn't work?

00:06:05.000 | The first—and you can approach this in a number of different methods of analysis.

00:06:11.000 | You can approach this from a method of analysis of what's most likely to happen to what's least likely to happen.

00:06:19.000 | And so if, for example, we use that, what's the most likely problem that you would face in your house?

00:06:25.000 | Well, the most likely problem is that you would lose power.

00:06:28.000 | That would be the thing that most of us experience fairly routinely.

00:06:32.000 | Most of the time, if you lose power, it's because somebody drove into a power pole.

00:06:37.000 | You lose power because there was an ice storm or there was a hurricane.

00:06:41.000 | But you want to think about that, because very rarely do we ever go hungry, right?

00:06:47.000 | You already have some food in your house.

00:06:49.000 | Very rarely do you run out of water.

00:06:52.000 | Very rarely do you need to shoot somebody, but pretty frequently you're going to run out of power.

00:06:58.000 | And so I think that's a good method to do analysis on, and I'll come back to electrical preparedness in just a moment.

00:07:06.000 | Another method of analysis that you could use is what has the most severe consequences.

00:07:12.000 | In the preparedness world, people often talk about this and what they call the rule of threes.

00:07:16.000 | It's not a perfect rule, but it's a useful rule, and the basic idea is this.

00:07:21.000 | You can go about three seconds without – you can live for about three seconds in an unsafe environment.

00:07:29.000 | If, for example, you're facing somebody who's got a gun pointed at your chest, some kind of physical danger like that,

00:07:35.000 | or if you're engaging in some kind of physically dangerous thing.

00:07:40.000 | Maybe you buy a house and you decide you're going to clear some trees.

00:07:42.000 | Next thing you know, your chainsaw blade went through your femoral artery.

00:07:47.000 | Well, you got about three – a little bit more than three seconds, a little bit of hyperbole with three seconds,

00:07:51.000 | but you can't live very long in that kind of situation.

00:07:54.000 | So physical safety and security is usually the most acute need, but it's often the least likely need,

00:08:03.000 | the thing that is least likely to impact you.

00:08:06.000 | I've never been in a fight.

00:08:08.000 | I've never had somebody point a gun at me.

00:08:09.000 | I've never had a major serious accident.

00:08:12.000 | But, of course, it is very – the risk of that happening is very severe if it does happen.

00:08:19.000 | And so people will talk about, you know, you can go three seconds without security.

00:08:23.000 | They'll say you can go for about three minutes without air.

00:08:26.000 | That's pretty true.

00:08:27.000 | And so if there's some kind of risk that results in you're not having air supply,

00:08:31.000 | maybe there's a fire in your home and you don't have the ability to breathe, that's a serious, serious problem,

00:08:36.000 | and you've got to rectify that problem very, very quickly.

00:08:40.000 | Three minutes without – or 30 minutes of exposure.

00:08:44.000 | Sometimes if you're exposed to the elements, usually, especially if this is excessively cold,

00:08:49.000 | then that can be a major problem.

00:08:52.000 | So 30 minutes or three hours of exposure depending on which three you want to use.

00:08:56.000 | Then you move on to things like water.

00:08:58.000 | So you can live for three days without water is what the saying usually goes.

00:09:03.000 | It's actually longer depending on, you know, where you start and what you're doing and everything.

00:09:07.000 | But it's a good thing to think about, three days without water.

00:09:11.000 | 30 days without food.

00:09:13.000 | Again, you could go a little bit longer, but you want to have some food.

00:09:16.000 | And then you can go on from there to other things.

00:09:19.000 | And so we're always dealing with this continuum of things that are likely to happen

00:09:25.000 | versus things that are not likely to happen,

00:09:28.000 | but things that have very severe consequences versus things that have less severe consequences.

00:09:35.000 | So what I would start with are the things that are the most practical in the house.

00:09:40.000 | So, for example, day one, you make sure that you have smoke detectors throughout the house.

00:09:47.000 | Now, by current building code where most of us live, that's probably already done.

00:09:52.000 | But if not, you go through your house and you say, "Do I have good smoke detectors?"

00:09:56.000 | And so the first weekend you're in the house, you may need to run out and buy some smoke detectors

00:10:00.000 | and install some smoke detectors.

00:10:02.000 | A carbon monoxide detector is going to be important

00:10:06.000 | in making sure that you have a working carbon monoxide detector.

00:10:09.000 | You think about the things associated with the house that could be an acute risk to your physical safety.

00:10:16.000 | Security in case of a burglar or whatever, that is important, but it's unlikely.

00:10:21.000 | But things like a home fire are really, really important.

00:10:23.000 | And so does your home have a fire extinguisher?

00:10:26.000 | Do you have multiple fire extinguishers?

00:10:28.000 | Do you have something that you would like to use?

00:10:31.000 | So, for example, what I do is in my kitchen, I have a big fire extinguisher,

00:10:35.000 | but I keep in my kitchen those little itty-bitty fire extinguishers about the size of a can of bug spray.

00:10:41.000 | And my basic idea is I want the use of a fire extinguisher to be something that's easy

00:10:48.000 | and where I'm not worried about blowing some kind of massive discharge of foam all over the kitchen cabinet.

00:10:54.000 | So if there's a fire, I keep one of those little tiny little things that you buy,

00:10:59.000 | I keep one of those handy, ready to go.

00:11:01.000 | So I can just put out a little fire if I needed one.

00:11:03.000 | Or you might grab a fire blanket.

00:11:05.000 | If you think that the most likely form of fire is something like a grease fire,

00:11:08.000 | you don't generally want to be spewing stuff at a grease fire, especially not water.

00:11:14.000 | And so if you pick up a fire blanket and store that in your kitchen,

00:11:17.000 | and you just know that if I ever have a grease fire, this is my fire blanket that I have.

00:11:22.000 | I think it's a really good idea to get some smoke hoods and put those in your house.

00:11:27.000 | And so you should make sure that by your bed you have a little fire kit.

00:11:31.000 | If you wake up in the night and you recognize that the smoke detectors are going off

00:11:35.000 | and there's smoke in your house, do you have one of those little portable smoke hoods

00:11:39.000 | that you can just put over your head that will give you a few minutes of oxygen to breathe

00:11:44.000 | so you can avoid smoke inhalation.

00:11:47.000 | The most frequent cause of injury and death in a fire is not physically being burned,

00:11:53.000 | but is actually smoke inhalation.

00:11:56.000 | At least that's my understanding as a non-fireman.

00:11:59.000 | And so do you have that?

00:12:01.000 | Do you have an escape route out of the house?

00:12:03.000 | And so if it's a two-story house, making sure that there are some escape ladders in the house,

00:12:07.000 | I think that is well worth doing.

00:12:10.000 | Then you want to think about other risks that you might face.

00:12:13.000 | So if you live in a place where you're prone to tornadoes,

00:12:17.000 | do you have a shelter, a plan for a tornado?

00:12:21.000 | Generally, most people aren't going to on day one go and install a tornado shelter,

00:12:25.000 | so I don't think that's stupid.

00:12:27.000 | But have you chosen the closet that you would retreat to?

00:12:31.000 | Have you put in place the plan?

00:12:33.000 | And so you need to make sure you buy a weather radio.

00:12:35.000 | So you want to get a weather alert radio and make sure that you have one of them in your bedroom

00:12:39.000 | so that if there is a severe weather event that you're awakened in the night by your weather radio

00:12:46.000 | and that gives you time to prepare to move your family into your safe room.

00:12:50.000 | Have you gone ahead and stocked your safe room with some light, maybe some bottles of water,

00:12:58.000 | a couple of snacks just to -- if you have children, just to give them something to munch on,

00:13:03.000 | maybe an activity to do, some pillows.

00:13:07.000 | If you're going to be in the basement, do you have a place -- a way to sleep?

00:13:09.000 | If it's a long, stormy night and you live in Oklahoma, do you have an ability to just say,

00:13:14.000 | "We're going to set up some beds down here and it's a stormy night

00:13:17.000 | and the weather alerts are going off and let's just go down here and sleep for a couple hours,"

00:13:21.000 | or a place to put the children there or the dogs.

00:13:24.000 | Do you have something for the dog to keep the dog occupied, et cetera?

00:13:28.000 | And so those kinds of events, those kinds of dangers are all the stuff that you already know about

00:13:36.000 | and they're the most likely things to happen.

00:13:38.000 | And so you think about, again, the two that -- well, the three, I guess,

00:13:43.000 | that are really concerning because they can happen so fast is a house fire, also a tornado,

00:13:49.000 | and then another thing would be an earthquake.

00:13:51.000 | And so do you have some kind of earthquake plan?

00:13:54.000 | Now, most of the United States is not prone to earthquakes,

00:13:57.000 | but it is an important thing to think about.

00:14:00.000 | Earthquake planning is a little bit bigger.

00:14:03.000 | It requires more work than those others, so I hesitate to put that on someone right away,

00:14:07.000 | but you can think about that.

00:14:09.000 | And so if you live in an area and you're concerned about earthquake preparedness,

00:14:12.000 | think about your wall fasteners and purchase wall fasteners that are rated for earthquakes

00:14:17.000 | so that you don't have glass mirrors coming off the wall.

00:14:21.000 | It's a simple thing to do, but you can do it especially when you're first moving into the house.

00:14:27.000 | Those are the things that are the most likely to happen,

00:14:30.000 | and those are the things that happen quickly.

00:14:32.000 | There are other risks.

00:14:33.000 | For example, if you live where there's hurricane danger,

00:14:36.000 | well, then you might want to just go ahead and put in some shutters.

00:14:39.000 | It's really nice to have that stuff done when you're not trying to get it last minute,

00:14:44.000 | you're not rushing down to Home Depot to buy plywood.

00:14:47.000 | It's nice to go ahead and just have that put in in the first place.

00:14:51.000 | But those are the most acute needs that can affect you in the home,

00:14:57.000 | and so you want to think about preparing your structure for those needs.

00:15:02.000 | If you do live in a place where you're prone to tornadoes,

00:15:08.000 | I think a tornado shelter is a very wise investment.

00:15:11.000 | There are many options available.

00:15:14.000 | You can purchase an in-the-ground option, which is certainly nice,

00:15:18.000 | or you can purchase an above-ground option, which is certainly nice.

00:15:21.000 | There are benefits and disadvantages to each, of course.

00:15:25.000 | There is this idea that the only kind of successful tornado shelter is an in-ground tornado shelter.

00:15:31.000 | From my research and the college laboratories who have tested that,

00:15:35.000 | I do not believe that is true.

00:15:37.000 | If you have a properly rated tornado shelter, an above-ground tornado shelter,

00:15:40.000 | that's properly rated, that's properly secured to the foundation,

00:15:43.000 | I would be happy to go into that every bit as one that's under the ground.

00:15:47.000 | In fact, there are some families for whom the in-the-ground tornado shelter would be a liability.

00:15:52.000 | Maybe you have an elderly parent in the home,

00:15:54.000 | somebody who's not able to easily navigate down a set of steep stairs into an in-the-ground tornado shelter.

00:16:00.000 | In that case, you need to think about that and go ahead and install an above-the-ground tornado shelter.

00:16:05.000 | There are some very nice units that are small that can be tucked into the corner of a garage,

00:16:10.000 | and they don't cost very much.

00:16:12.000 | But if you're in a place where that kind of risk is, you're prone to that,

00:16:16.000 | a few thousand dollars invested in the installation of a tornado shelter would be a very wise investment.

00:16:22.000 | Doing it right at the beginning, right when you're moving in, will help you to protect your home.

00:16:29.000 | Now, you can also build a safe room in the house.

00:16:32.000 | You can do a DIY safe room if you want to build it yourself.

00:16:35.000 | There are various materials available for there.

00:16:38.000 | I'd recommend the best resource on that if you're interested in building some kind of safe room in your home

00:16:43.000 | that is useful in case of tornado, et cetera, would be Joel Skousen's book called High Security Shelter.

00:16:50.000 | In that book, he lays out how an ordinary family can build their own personal safe room in their home,

00:16:56.000 | and he advocates the construction of a safe room that is useful for weather hazards,

00:17:02.000 | also for nuclear fallout, also for – he makes them bulletproof – he teaches you how to make them bulletproof,

00:17:08.000 | so you can turn a large closet into your house into a bulletproof safe room.

00:17:12.000 | So the question is just how much – I don't know where in that range the tinfoil hat comes in.

00:17:17.000 | So you have to decide at what point in time is that too much for you, but there are plenty of options out there.

00:17:23.000 | Now, that deals with most of the acute risks, those things that happen fast,

00:17:30.000 | and I think that that's where you should start because if you've got time,

00:17:36.000 | then most of the other options you can figure it out.

00:17:39.000 | Let's say that you ran out of water today.

00:17:43.000 | Power went down, the water failed, and you had to figure that out.

00:17:47.000 | Well, if you've got time, you've got a few days to find water, you'll be able to come up with water.

00:17:51.000 | You can get water from your neighbors, you can drain your water heater.

00:17:54.000 | There are options.

00:17:56.000 | But I do still think additional levels of preparedness with things like water and food, et cetera, are very wise.

00:18:04.000 | Let's start with electrical preparedness where oftentimes the results of electrical preparedness are not catastrophic,

00:18:10.000 | but since that's the most likely thing that you're going to be facing, I think it's worth considering.

00:18:16.000 | So I see electrical preparedness as having multiple layers.

00:18:19.000 | The first thing is just making sure that you have a flashlight.

00:18:21.000 | If you wake up in the middle of the night, the thing that gets us, we know there's a power failure,

00:18:26.000 | is we put a white noise machine on in the children's room, and when the white noise goes off, then I wake up.

00:18:32.000 | Okay, white noise is off.

00:18:33.000 | That means the power is off.

00:18:35.000 | So you wake up in the middle of the night.

00:18:36.000 | The house is pitch dark.

00:18:37.000 | It's pitch dark outside.

00:18:38.000 | Do you have a source of light close to hand?

00:18:41.000 | And so putting a flashlight, making sure that you have a flashlight with charged batteries is going to be ready to go.

00:18:47.000 | In your nightstand or around your house is very, very simple.

00:18:51.000 | What I advocate when I teach preparedness, I've come to the point where I wear a flashlight all the time.

00:18:57.000 | I didn't used to.

00:18:58.000 | I used to use my cell phone like most of us did.

00:19:00.000 | Then I got a little flashlight, and I just wear it 24 hours a day because I know I always have a flashlight on me.

00:19:07.000 | And so that may be -- that's a very simple thing, but it's insanely useful.

00:19:12.000 | Making sure that -- okay, if the power does go out, do we have the ability to get some other lights?

00:19:18.000 | So what I do is I have some inexpensive lanterns.

00:19:21.000 | I keep some inexpensive lanterns throughout the house in places that I know where they are, put a little bit of glow in the dark or bright tape on them so that if the power goes out, and I want to go and find --

00:19:31.000 | and I'm just talking about battery-operated LED lanterns -- if the power goes out and I need to find that lantern, can I find it?

00:19:39.000 | And so you can just put a little bit of reflective tape on it, put it on a shelf, put it in a closet, somewhere that you'll know to go and look for it.

00:19:45.000 | Some people create a little blackout kit.

00:19:47.000 | They put a little box, a little Tupperware box or a little bag or something, and they put some lanterns in that, some flashlights, et cetera.

00:19:55.000 | I think that's fine.

00:19:56.000 | And so you might want to create a little blackout kit.

00:19:58.000 | If the power goes out, what do we need in that situation?

00:20:01.000 | Now, if you're in a cold climate, as you would be from New York, your first concern is going to be if the power goes out, what's my plan for heating?

00:20:09.000 | And so think through what would be my plan.

00:20:12.000 | Most of the time, right, you just snuggle down and put another blanket on the bed, something like that.

00:20:16.000 | But in a severe situation, what if you're facing a multi-day ice storm and it's very, very cold?

00:20:23.000 | What's your plan for that?

00:20:24.000 | And so you might have a backup source of heating, which, of course, would be strongly recommended.

00:20:29.000 | But depending on what the house has or the house doesn't have, you can do different things.

00:20:33.000 | A backup kerosene heater is never stupid.

00:20:37.000 | Maybe you might install a wood stove or have a fireplace insert or just have a supply of firewood for the fireplace that you already have.

00:20:45.000 | So think through how would I stay warm.

00:20:47.000 | Perhaps in a worst-case scenario, you would stay warm by either putting up a tent in your living room or creating a tent, sealing off the exterior rooms, and then making a little warm room in the middle of the house.

00:20:58.000 | But think through if the power went out, how would I keep my family warm?

00:21:02.000 | In hot climates, the risk is the opposite.

00:21:04.000 | And so how do I keep myself cool if the power goes out?

00:21:08.000 | And the best option there, of course, is going to be a fan of some kind.

00:21:12.000 | So maybe having a battery-operated fan, having a battery backup system from which you can run a fan.

00:21:17.000 | It makes all the difference in the world if you can lie down in your bed and have a fan pointed at you versus no fan pointed at you.

00:21:23.000 | And most of us live in houses where if the power goes out, they're designed to function with an HVAC system.

00:21:30.000 | So if the power goes out, they quickly become very, very uncomfortable.

00:21:34.000 | So considering what would we do in that situation if the power went out, stay warm and to stay cool as appropriate.

00:21:42.000 | Beyond that, you can think about what would we do to live our life.

00:21:46.000 | So how would we get water?

00:21:48.000 | If you have a well, you are going to need some kind of power source to be able to get water from your well.

00:21:52.000 | So there's where a generator comes in.

00:21:54.000 | I think a generator is a very wise investment that most homeowners should have a generator.

00:22:01.000 | You can range, of course, from the simple and easy to the complex and expensive.

00:22:06.000 | So simple and easy would just be -- I recommend people start with an inverter for their car.

00:22:13.000 | So you go and pick up a 1,000-watt inverter or a 1,500-watt inverter.

00:22:17.000 | And then that gives you the ability to park your car in the driveway.

00:22:19.000 | You pop the hood, turn the car on, plop the inverter cables onto your battery,

00:22:24.000 | and now you should be able to run your refrigerator so your food doesn't spoil.

00:22:29.000 | With the car on, you can run your refrigerator.

00:22:31.000 | With the car off, you can run an extension cord inside, plug in some lamps and a lamp in the room,

00:22:36.000 | or plug in a fan, and you can run a fan on you overnight.

00:22:40.000 | So an inverter is a really good solution.

00:22:42.000 | A generator is awesome.

00:22:44.000 | You can go from cheap backup all the way to hardcore installed,

00:22:49.000 | whole house generator running off of a giant propane tank.

00:22:53.000 | What I recommend is just look to see what you have and then see what would be convenient for you.

00:22:59.000 | So if I'm consulting with somebody and you look out in the backyard and they've got a 1,000-gallon propane tank there

00:23:04.000 | that runs their heater, well, it makes all the sense in the world to go ahead and install a propane generator

00:23:09.000 | that even if it's a portable propane generator, totally fine.

00:23:12.000 | And so get yourself a generator to run on propane.

00:23:14.000 | Now you've got a giant tank there and you can provide electricity for yourself.

00:23:19.000 | And so think through what you would do and try to figure out what makes sense.

00:23:23.000 | I think for most people the sweet spot is going to be one of the suitcase inverter generators

00:23:29.000 | just because they're so convenient.

00:23:31.000 | They're not obnoxious.

00:23:32.000 | They're expensive.

00:23:33.000 | They're going to be $1,000.

00:23:35.000 | They're more than double the cost of a non-inverter generator,

00:23:38.000 | but they're so quiet and they're so efficient and they're just nice that it's not a big deal to grab one of them out.

00:23:45.000 | I have a Honda 2000, one of the EU 2000is, which is great.

00:23:49.000 | And so if the power goes out and I find sometimes like, okay, the power went out and I got up

00:23:54.000 | and I wanted to start the electric kettle to make my coffee but the power is out,

00:23:57.000 | so I just grabbed a little suitcase generator, stick it in the carport, plug my coffee pot into it.

00:24:01.000 | The generator needed to be exercised anyway.

00:24:03.000 | So a few minutes later I've got my hot pot of hot water to pour my French press for my morning coffee and I'm done.

00:24:12.000 | And so something like that, it's so convenient to have a little 2000 watt generator tucked in your closet

00:24:18.000 | that I think for many people that would be an ideal solution.

00:24:21.000 | You'll be able to run your refrigerator or your freezer on that,

00:24:24.000 | which is probably the most important thing for most of us.

00:24:27.000 | If you've got $1,000 worth of meat in your freezer, you really would hate to have that go bad on you

00:24:33.000 | because you didn't take care of it.

00:24:35.000 | So with a little generator like that, you just plug it in, run it for an hour in the morning,

00:24:39.000 | cool the freezer down, run it for an hour at night, cool the freezer down.

00:24:42.000 | And as long as you keep the lid shut, all the meat will be fine. It won't thaw out.

00:24:45.000 | And so that little generator will be really useful.

00:24:47.000 | If you're running a well pump, you need to size more appropriately.

00:24:51.000 | And then of course, if you're willing to invest the money and you live in a place where,

00:24:55.000 | let's say you live in a snow climate where power outages are frequent during the wintertime,

00:25:00.000 | well, you cannot beat just having an installed whole house generator

00:25:03.000 | that will just kick on automatically.

00:25:05.000 | That's the ultimate in lifestyle planning.

00:25:08.000 | Your big constraint there is of course fuel storage.

00:25:11.000 | I think most people who have invested in a large whole house generator

00:25:15.000 | have often underestimated how useful that is because you'll quickly run out of fuel.

00:25:21.000 | And so I encourage people to think about how that could be extended.

00:25:26.000 | What if you did face an extended power outage?

00:25:28.000 | It's unlikely, but it's possible.

00:25:30.000 | And so if you're interested in preparing for a more extended power outage,

00:25:34.000 | you need to either stockpile more food or create a more efficient plan for using it.

00:25:39.000 | I keep a battery backup system in my house, and I find that that works really well.

00:25:43.000 | I just have a couple of deep cycle batteries.

00:25:45.000 | I keep a battery charger, plug them in, and then if the power goes out,

00:25:49.000 | I can grab one of my deep cycle batteries, clamp an inverter on it.

00:25:52.000 | I can run lights. I can run – I can charge phones.

00:25:55.000 | I can run a TV or radio or whatever you've got, and that will square things away.

00:26:00.000 | Moving quickly, I won't cover everything.

00:26:03.000 | After all, I have a 10-hour class on this.

00:26:06.000 | But water and food I think are useful.

00:26:09.000 | And so you want to make sure you have some water.

00:26:12.000 | Most importantly, obviously to drink,

00:26:14.000 | and especially if your water is connected to the power outage, that can be a real problem.

00:26:21.000 | Some people say, "Okay, I've got a pump, but what if the power goes out

00:26:24.000 | and you don't have the ability to run that pump?"

00:26:26.000 | This is the biggest thing in Florida where I'm from where you're basically stuck.

00:26:31.000 | And so you need water to drink, but you need water for sanitation, to keep clean, et cetera.

00:26:36.000 | And so I think stockpiling some water is a good idea, kind of low end to higher end.

00:26:41.000 | The low end is just stockpile some trays of bottled water.

00:26:44.000 | That's my step one.

00:26:46.000 | You can grab a corner of a closet, corner of a basement, under the bed.

00:26:51.000 | You can put a dozen or two trays of the 24 packs of half-liter water bottles.

00:26:57.000 | A 24-pack of half-liter water bottles is I think five and a half gallons, which is quite a lot.

00:27:02.000 | And what I really like about the water being in that form is it's really easy to use.

00:27:07.000 | If you're thirsty, you grab a bottle, you drain the bottle, throw it away.

00:27:10.000 | And then it's also easy to use in time where you don't feel like you're wasting a bunch of money

00:27:14.000 | because if you want to go for a picnic, now you just grab one of your trays of water bottles.

00:27:20.000 | You've always got bottles of water.

00:27:22.000 | In addition, then, you can purchase some larger water containers.

00:27:25.000 | If you're trying to do this on the cheap, you can do this with saved soda bottle containers.

00:27:29.000 | Just grab a soda bottle from whoever drinks soda, wash it out, put some tap water in there.

00:27:34.000 | If you've got chlorine, tap water will be totally fine.

00:27:36.000 | You don't have to chlorinate it. There's all these arguments about it.

00:27:40.000 | Whatever. You can dig into that on your own.

00:27:42.000 | I keep some containers, some 15-gallon barrels of water.

00:27:47.000 | And then if I were moving into a house where I knew I was going to be there for a long time,

00:27:51.000 | then I would install some mega barrels of water in the garage.

00:27:57.000 | There is a company, for example, called Sure Water Tanks, surewatertanks.com,

00:28:05.000 | and they sell these giant 500,000-gallon barrels.

00:28:12.000 | And so if I knew I was going to be in a house for a long time, I would go ahead and install that

00:28:16.000 | because knowing how important water is, it sure feels nice to have a couple thousand gallons ready for you at all times

00:28:24.000 | in case you face some kind of long-term water outage.

00:28:29.000 | Food, I think, is the simplest thing, and it's very, very simple.

00:28:33.000 | Most of us have food in our house already, and so basically where I encourage people to start

00:28:38.000 | is just take whatever you usually eat and then take the stuff that doesn't spoil and buy some more of that,

00:28:46.000 | whatever you usually eat, and then you can stock up to the higher extreme.

00:28:51.000 | And so what you can do is figure out how much do I want. Do I want a month of food?

00:28:55.000 | You can do a month of food just right out of your pantry with normal food that you eat.

00:29:00.000 | And then if you want to supplement with some inexpensive emergency food, you can do that.

00:29:05.000 | There's lots of options there. Do I want three months of food? Do I want six months of food?

00:29:09.000 | Do I want two years of food? There are just a couple different layers that you would add on.

00:29:15.000 | And I think the final thing that you wanted to think about is the hygiene, sanitation, and cooking.

00:29:21.000 | So if you have your house and your house provides shelter, and if you've thought about those acute situations

00:29:28.000 | in which your shelter could be damaged in some way, then you'll have a plan there.

00:29:32.000 | But what's your plan if you're going to live in your shelter but the utilities are cut off?

00:29:37.000 | That's where things are difficult. So how do you maintain hygiene?

00:29:40.000 | How do you – how does your family – how do you keep clean? How do you deal with human waste?

00:29:46.000 | How do you cook, making sure that you have a backup form of cooking?

00:29:50.000 | Simplest thing, the simple stuff works.

00:29:53.000 | So if you've got a new house, go ahead and put – get yourself a nice grill for the back patio

00:29:58.000 | or a nice griddle for the back patio.

00:30:00.000 | But then go ahead and stock up half a dozen propane tanks instead of one

00:30:04.000 | or put a dozen propane tanks instead of one.

00:30:07.000 | Well, if you have a nice grill that you're going to use for your dinner – steak dinner parties

00:30:12.000 | and that grill has got a little propane burner off the side,

00:30:16.000 | you've got a perfect, just super awesome emergency backup system if you're fancy,

00:30:22.000 | induction cooktop inside goes down because the power grid goes down.

00:30:26.000 | And so all you need to do is take that normal equipment that you buy that you already have

00:30:31.000 | and then just think about how you could keep it running for an extended period

00:30:34.000 | by storing some propane bottles in the back shed.

00:30:38.000 | And then the final thing I would say is always remember that although your house is going to be

00:30:43.000 | in the vast majority of places, the best place for you to be,

00:30:47.000 | always remember that you might need to leave your house.

00:30:50.000 | And so if you had to leave your house, then you're going to probably do that in your car.

00:30:55.000 | In theory, right, maybe cars can't work.

00:30:57.000 | In theory, maybe the roads are blocked and you've got to bicycle out or hike your way out, I guess.

00:31:01.000 | But, man, I don't ever want to be there.

00:31:03.000 | So what I recommend to people is that you keep at least two fuel tanks worth of gasoline stored

00:31:13.000 | for your car or diesel, whatever your vehicle runs on at your house.

00:31:17.000 | And so you need to be careful about where you live.

00:31:20.000 | There are municipal codes that apply to some of this stuff,

00:31:23.000 | so you've got to think about what you can do and make sure that you store it safely.

00:31:27.000 | But my theory is this.

00:31:29.000 | If my minivan has a 20-gallon fuel tank and let's say that all of a sudden there's a problem,

00:31:36.000 | there's a hurricane heading for us, and we've got to get out of town

00:31:40.000 | or something bad happened, we've got to get out of town.

00:31:43.000 | And I just unfortunately was stuck with a totally empty fuel tank.

00:31:48.000 | Well, I want to have enough fuel that I can fill up my car's fuel tank.

00:31:52.000 | That'll give me on almost any car about 400 miles of range.

00:31:56.000 | So I want to have enough fuel to fill up my car's fuel tank,

00:31:59.000 | and then I'd like to have one extra tank worth of fuel that I could take with me.

00:32:04.000 | So then if I can take one extra tank worth of fuel with me,

00:32:09.000 | then I can get now 800 miles away from wherever I have to be

00:32:12.000 | without having to depend on gas stations being open, et cetera.

00:32:16.000 | And so I think that that is a really worthwhile thing to look for,

00:32:22.000 | and then all this stuff starts to overlap.

00:32:24.000 | So if you store 40 or 50 gallons of fuel for your car,

00:32:28.000 | it gives you the ability to fill up the tank and then strap the fuel cans on the back end

00:32:33.000 | or however you're going to transport them with you if you had to leave.

00:32:36.000 | That also gives you 50 gallons of fuel for your generator.

00:32:39.000 | And 50 gallons of fuel for your Honda 2000 generator,

00:32:43.000 | that's months of fuel that I can run on 50 gallons.

00:32:47.000 | And so you start to see how everything interacts,

00:32:50.000 | and then you create this web of preparedness and resiliency where you have multiple options.

00:32:57.000 | And so that's the 30-minute overview off the top of my head of non-tinfoil hattery preparedness.

00:33:07.000 | So there you go, Peter. Was that helpful?

00:33:10.000 | I think extremely.

00:33:12.000 | All right. Well, if you want the full version, then you can get my 12-hour class,

00:33:15.000 | but that was my 30-minute version off the top of my head.

00:33:18.000 | All right. We go to Jeremy in Ohio.

00:33:20.000 | Jeremy, welcome to the show. How can I serve you today, sir?

00:33:23.000 | Hi, Joshua.

00:33:24.000 | I have what may be a controversial question about how Medicaid can possibly benefit early retirees.

00:33:31.000 | So my wife and I are American citizens.

00:33:33.000 | We live in Ohio and will likely achieve financial independence right around the age of 40.

00:33:38.000 | And so to be eligible for Medicaid in Ohio,

00:33:41.000 | a household of two can earn up to currently 133 percent of the federal poverty line,

00:33:47.000 | which is about $22,000.

00:33:50.000 | And it's my understanding that in Ohio assets have no impact on Medicaid eligibility if you're under 65.

00:33:58.000 | It's only modified adjusted gross income that's considered.

00:34:02.000 | So if we retired, did not earn income, and used check-in counts, Roths, a 457, to cover our living expenses,

00:34:12.000 | at that point we'd have minimal reportable income and I believe be eligible for Medicaid.

00:34:18.000 | We could also withdraw 22,000 or up to 22,000 from pre-tax accounts,

00:34:23.000 | report the income and cover the remaining expenses from the accounts I just mentioned.

00:34:29.000 | So I guess my questions are, am I correct in assuming that we and many early retirees would be eligible for Medicaid?

00:34:38.000 | Do you have any idea what the quality of care or costs look like for Medicaid participants?

00:34:44.000 | And then you can get into this if you'd like.

00:34:47.000 | If we're eligible, do you think it's ethical for us to participate in this?

00:34:52.000 | So to answer those questions, number one, yes.

00:34:56.000 | It's my understanding that in most states the system functions like you say,

00:35:02.000 | that Medicaid in most states, and of course I don't know all, but the states that I have looked at,

00:35:06.000 | Medicaid in most states is done based upon income qualification, not based upon asset qualification.

00:35:15.000 | So you can have $10 million in your checking account, and if you are not working and you have no income,

00:35:21.000 | you can qualify for Medicaid coverage.

00:35:25.000 | So the answer is yes.

00:35:27.000 | And in addition, so you've got the 133% of federal poverty limits, that's good.

00:35:34.000 | Then that same thing applies to things like the Obamacare subsidies.

00:35:38.000 | So if you go on a nationalized, you know, the Obamacare exchanges and purchase a website through the exchange,

00:35:45.000 | you qualify also for those subsidies.

00:35:48.000 | So what I'd encourage you, in addition to Medicaid, research the subsidy amounts

00:35:53.000 | and research what your projected income would be and research what qualifies as income there,

00:35:58.000 | and that also can give you the same coverage.

00:36:00.000 | So yes, that plan does work, and I think it's a very useful tool in the toolbox of anybody to have that as a plan,

00:36:11.000 | because without that, the costs of medical health insurance become really, really significant, as you well know.

00:36:19.000 | If you're 40 or 50 years old and you're trying to cover yourself with an independent plan,

00:36:23.000 | all of a sudden it becomes much more significant.

00:36:26.000 | I don't have any insight on the quality of care of the Medicaid system and the overall quality of care.

00:36:35.000 | I don't have any insight on that.

00:36:37.000 | What I would say is the people for whom this kind of plan works the very best are people like me,

00:36:45.000 | who we're blessed not to have any – we don't have any conditions, we don't have any ongoing health issues.

00:36:51.000 | I try to consult medical professionals as part of how can I optimize things,

00:36:57.000 | but in general I try to stay away from doctors and hospitals.

00:37:01.000 | In general, my experience is that people die in hospitals, and I don't want to die that way,

00:37:06.000 | so I try to stay away from them unless something is really, really acute.

00:37:10.000 | And so I don't know about the quality of care in one place versus another.

00:37:16.000 | What I would say from general knowledge is that your quality of care will not change dramatically

00:37:25.000 | based upon how the care provider is being paid.

00:37:30.000 | When you're working with a care provider who is being paid by Medicaid or by Medicare,

00:37:35.000 | they're getting paid regardless.

00:37:37.000 | And so it's not like there's a second-class system where, okay, there's the Medicaid people over there

00:37:43.000 | and then there's the private pay people over here.

00:37:45.000 | That system just doesn't exist at this point in time.

00:37:49.000 | And so my experience and my observation from speaking to people who have received Medicaid benefits

00:37:54.000 | is that the quality of care is going to come down to the quality of care providers.

00:37:59.000 | Now where this plan goes bad is if there's a specific care provider or a specific type of care that you really need,

00:38:06.000 | because you're dealing with something where this is an ongoing situation and I've got to have this doctor

00:38:12.000 | because this doctor is the one doctor who understands my situation, who understands my medical profile,

00:38:17.000 | and this is the doctor that allows me to feel good, well, that doctor may or may not be covered.

00:38:24.000 | And so that's a much more difficult situation that requires a lot of research.

00:38:29.000 | And that's what I was wondering, yeah.

00:38:32.000 | Yeah, so I think in your situation where your plan works the best is if you're just viewing this as,

00:38:38.000 | you know, I want to have health insurance because I don't want to have my million dollars in my checking account

00:38:43.000 | disappear for medical bills.

00:38:45.000 | And so will Medicaid cover me if I have it?

00:38:47.000 | The answer is yes.

00:38:48.000 | Final question, is it ethical?

00:38:51.000 | My answer to that comes down to this.

00:38:53.000 | Did you choose to support the Medicaid system?

00:38:59.000 | No.

00:39:00.000 | And as much as I don't like redistributionist programs, ethically,

00:39:06.000 | I've never come to the position where I could say that there was anything wrong with participating in them.

00:39:11.000 | Now, there is a bit of personal pride involved for me here.

00:39:17.000 | I have always seen myself as the kind of person who is not a leech on the system.

00:39:22.000 | I've always seen myself as the kind of person that took care of myself.

00:39:26.000 | I take care of myself.

00:39:27.000 | I take care of my family.

00:39:29.000 | I've always seen myself as the kind of person who worked hard to be independent and self-reliant.

00:39:36.000 | And I've never seen that there was anything wrong with somebody accepting help if they needed it.

00:39:43.000 | But I have always believed, and I still do believe, that our primary responsibility is to take care of ourselves.

00:39:48.000 | So there is this traditionalist perspective in the United States especially,

00:39:55.000 | where in days past there was a culture of self-reliance.

00:39:59.000 | To this day still you can find micro pockets of communities in the United States where this still exists,

00:40:04.000 | where it's like, you know, don't take from the system, that's for other people, support yourself, etc.

00:40:09.000 | And there was this proud culture of individualists who took responsibility for themselves

00:40:14.000 | and recognized that, you know, there was charity available and they wanted to contribute to charity,

00:40:19.000 | but they didn't want to be a taker.

00:40:20.000 | They wanted to be a giver and not a taker.

00:40:23.000 | And that personal philosophy resonates with me very, very deeply.

00:40:30.000 | However, the problem is that that's dead and gone.

00:40:33.000 | That whole world is dead and gone.

00:40:36.000 | And at this point in time nobody gave me a choice about complying for Medicaid.

00:40:41.000 | Nobody gave me a choice about contributing to Medicare or Social Security or any of that stuff.

00:40:46.000 | That money was taken from me by force.

00:40:49.000 | So what ethical imperative is there for me to reject the money?

00:40:53.000 | What ethical imperative is there for me to reject it?

00:40:56.000 | And this is why in the United States the health care debate is so difficult

00:41:01.000 | because the United States is caught very firmly between two cultures.

00:41:06.000 | The United States is caught between a traditional culture that many older people identify with,

00:41:12.000 | you know, take care of yourself, take care of your family, don't rely on government money,

00:41:16.000 | be the kind of person who stands up and provides for yourself,

00:41:20.000 | versus modern culture which is very much the government is here not to secure my freedom

00:41:25.000 | or to secure my rights but to provide for me.

00:41:27.000 | And if there's a problem, it's the government's fault.

00:41:29.000 | And so systems like Medicaid are in the middle.

00:41:34.000 | Systems like Medicaid are kind of half and half.

00:41:36.000 | They're havesies.

00:41:37.000 | They were put in place by progressive political administrations

00:41:41.000 | who admired the system of the government taking care of everything,

00:41:45.000 | but they were put into place in the constraints of a U.S. American culture that said,

00:41:50.000 | "We don't want that for everybody.

00:41:52.000 | We just want to take care of the poor, and we just want to make sure we understand,

00:41:56.000 | okay, we don't mind if you take a little bit of tax money and you take care of the poor,

00:41:59.000 | and so we're going to allow that to be the case."

00:42:03.000 | Now, many other nations have gone on.

00:42:05.000 | So, for example, if you were living in the United Kingdom, if you were living in London, England,

00:42:09.000 | and you knew that you were part of the National Institutes of Health,

00:42:12.000 | you wouldn't think twice from an ethical perspective about being an early retiree

00:42:17.000 | and having the National Institutes of Health because that's baked into the culture.

00:42:20.000 | It's baked into the European culture and many cultures around the world

00:42:23.000 | as the government should take care of health insurance.

00:42:26.000 | Many people believe health insurance is a human right,

00:42:29.000 | health care is a fundamental human right,

00:42:31.000 | and it's the government's job to maintain fundamental human rights,

00:42:34.000 | just like right to education, just like right to food, just like right to water,

00:42:38.000 | just like right to a place to live, et cetera.

00:42:40.000 | And so what's difficult is the United States is caught between these two things,

00:42:44.000 | caught between a system that no longer exists of a culture of self-reliance and independence

00:42:49.000 | and take care of yourself, but not all the way forward to government-subsidized,

00:42:55.000 | government-run health insurance.

00:42:57.000 | And so that's why everything is so difficult right now.

00:43:01.000 | So I don't think – my personal guess, you know my position.

00:43:05.000 | If I could choose, I would go back to the system of everybody taking care of themselves

00:43:12.000 | because I believe that it's fundamentally immoral and fundamentally dangerous for us

00:43:18.000 | to have these programs where I'm just going to take care of it.

00:43:21.000 | It weakens people.

00:43:22.000 | If you look at the devastation that has been wrought in many communities in the United States

00:43:26.000 | by things like welfare programs, it's just – it's devastating to people,

00:43:30.000 | it's devastating to households, it's devastating to culture.

00:43:32.000 | It's bad for human beings.

00:43:34.000 | But I'm on the tiny, tiny minority ideologically of people who believe that.

00:43:39.000 | And so I think that in the United States, I don't know exactly how long,

00:43:44.000 | but I would say within a decade or so, it's inevitable that the United States will move

00:43:49.000 | from this very difficult, awkward system of health insurance and private and government option

00:43:54.000 | and Medicaid and Medicare, et cetera, to a fully government-run health insurance program

00:44:01.000 | like many other countries around the world maintain.

00:44:04.000 | So I think this is a short-term thing.

00:44:06.000 | I don't like that necessarily.

00:44:07.000 | I'm not in favor of it, but I think it's a reality.

00:44:10.000 | And my proof for that, my argument for that is very, very simple.

00:44:15.000 | Medicare is a government-run system, and I'm not aware of any person, any major politician –

00:44:25.000 | I shouldn't say person. That was the wrong word.

00:44:27.000 | I'm not aware of any politician, at least not any elected politician,

00:44:30.000 | any major figure who, from a moral perspective, is making the argument that Medicare should be disbanded.

00:44:39.000 | Rather, everybody says, "Well, we've got to keep Medicare."

00:44:42.000 | And there's an obvious political reality to it.

00:44:44.000 | Well, what magically changes for you at age 65, where now at age 65 you have the right to Medicare,

00:44:54.000 | but now at age 63 you didn't, or at 53 or whatever your early retirement age?

00:44:58.000 | What morally changes?

00:45:00.000 | There's no moral change there. Nobody's making the moral argument.

00:45:03.000 | My exact same thing with regard to government education.

00:45:07.000 | People, everybody, the United States accept as an article of faith that the government should be involved in schooling from K through 12.

00:45:14.000 | But then the country arbitrarily believes that somehow something magically changes in grade 13 to grade 16,

00:45:22.000 | that now all of a sudden it shouldn't be that.

00:45:25.000 | And so I don't see any philosophical reason, any reason how those arguments can hold.

00:45:31.000 | And I'm not trying to just be consistent for the sake of mere consistency.

00:45:34.000 | I'm trying to say that arguments have consequences.

00:45:37.000 | Once you go down a certain path of thinking and once you're convinced that this is the foundation upon which we build,

00:45:44.000 | then that foundation has inevitable consequences.

00:45:48.000 | And so on education, I think inevitably college education will be paid out of government taxpayer funds

00:45:56.000 | because it's the natural continuation of the current system where government funds pay for K through 12.

00:46:02.000 | What's the difference between K through 12 and K through 16?

00:46:04.000 | There's no fundamental difference.

00:46:06.000 | So as I see it, either you believe that the government should not be involved in education, as I personally do,

00:46:11.000 | but again I'm part of like 0.08 percent of people who believe that,

00:46:15.000 | but either you personally believe that, in which case government's not paying for college is as natural and as normal

00:46:21.000 | as government's not paying for K through 12 education,

00:46:24.000 | or you see it, you're inevitably going to come to see that there's nothing meaningfully different between K through 12 and K through 16.

00:46:31.000 | So on health insurance, same thing.

00:46:33.000 | Either you believe that the government should pay for health insurance because it's the best way or it's the only way

00:46:38.000 | or it's the most just way or the most righteous way, in which case why does it start at 65?

00:46:43.000 | Why not have it start at 0 or at 18 or whatever age you want to pick?

00:46:47.000 | Or you believe that it's not the business of the government, that's not the purview of the government,

00:46:52.000 | in which case you would need to oppose it at age 45 but also oppose it at 65.

00:46:58.000 | And so what's happening is there's this generational tension between older generations

00:47:04.000 | who were raised in a world in which government programs were non-existent

00:47:09.000 | and then government programs were just for the poor, but that generation is now retiring,

00:47:16.000 | that generation is now dying off, and the younger generation was not raised with any of those basic moral arguments

00:47:23.000 | that, yeah, okay, we should take care of the poor but not.

00:47:25.000 | And so from an ethical perspective, if you didn't have any choice in having the money taken from you,

00:47:31.000 | then why should you feel the responsibility of not taking from it?

00:47:36.000 | So let's use another example, okay?

00:47:38.000 | The roads could be privately funded but they're not.

00:47:44.000 | So why should you feel--let's say that you drive a lot and you drive 30,000 miles a year

00:47:51.000 | and I drive 3,000 miles a year.

00:47:53.000 | Should you feel guilty about the fact that you drive 30,000 miles a year

00:47:57.000 | and you're putting more wear and tear on the roads

00:48:00.000 | or should you just simply comply with the law and go on about your life?

00:48:05.000 | So although I don't like the answer and I long and wish for a culture of people who said,

00:48:12.000 | "I'm going to take care of myself and my family because that's where it starts

00:48:16.000 | and then I'm going to reach out and I'm going to take care of my neighbor

00:48:19.000 | because my neighbor needs help and I'm not going to look to the left when they're on the right,

00:48:23.000 | but I'm going to genuinely get involved and help that,"

00:48:25.000 | I would dearly love to live in that culture.

00:48:27.000 | We don't.

00:48:28.000 | So my answer is, from an ethical perspective,

00:48:31.000 | you have no ethical responsibility to consider that at this point in time.

00:48:35.000 | You simply have an ethical responsibility to follow the law.

00:48:38.000 | And so if the law has been written in such a way that you qualify, take it.

00:48:45.000 | Yeah, the political and economic implications of the question are so fascinating,

00:48:50.000 | so I do really appreciate your insights.

00:48:53.000 | Yeah, my pleasure.

00:48:55.000 | Well, congratulations on your pending early retirement.

00:48:58.000 | How did you acquire wealth to be even thinking about early retirement?

00:49:02.000 | What was your path?

00:49:05.000 | Very minimal expenses.

00:49:07.000 | I mean, pretty standard fire path, cutting expenses very low,

00:49:11.000 | saving and investing the difference in low-cost index funds.

00:49:14.000 | Congratulations.

00:49:15.000 | Was this something that you recently started thinking about

00:49:17.000 | or is this something that for years and decades you've been working on?

00:49:21.000 | I was very fortunate to grow up with a father who it was his goal his entire life

00:49:27.000 | to be able to retire at 40, and he did.

00:49:30.000 | And I recently told him about the FIRE movement,

00:49:33.000 | and his response was, "Oh, they have a name for what I did."

00:49:38.000 | So I had that model, so I was very lucky.

00:49:41.000 | That is great.

00:49:42.000 | And I think that that's the power of the FIRE movement currently,

00:49:45.000 | that what I see happening is the path of FIRE,

00:49:53.000 | of early retirement financial independence,

00:49:56.000 | has been there for a very long time.

00:49:58.000 | I have a hobby of reading old books, written in the '70s and the '80s and the '90s,

00:50:03.000 | where you could find people were doing this.

00:50:05.000 | But it's the communication revolution where now many more people can share their stories.

00:50:11.000 | And previously there were lots of people like your father who did it,

00:50:14.000 | but they didn't have contact with a lot of other people

00:50:17.000 | because communities were less based on interest and more based on geography.

00:50:24.000 | Communities were not possible virtually,

00:50:28.000 | and so your dad probably shared with a couple of friends,

00:50:31.000 | but not many, what he actually was doing.

00:50:33.000 | But now that communities can be created and sustained based on interest,

00:50:38.000 | not based on mere geography, it allows access for normal people who previously,

00:50:43.000 | if they wanted to get their ideas out there,

00:50:45.000 | they would have had to go through the whole process of creating a pitch,

00:50:48.000 | of taking it to a publisher, of getting a book published.

00:50:51.000 | That was the way to disseminate information.

00:50:53.000 | But now those same people can post it on their Instagram, can post it on a blog, etc.

00:50:59.000 | And that's what's creating this tremendous excitement.

00:51:02.000 | So congratulations, and what a cool story that your father did it.

00:51:06.000 | Do you have children?

00:51:08.000 | We do not.

00:51:09.000 | Okay, so you're not going to be passing it on to the third generation.

00:51:11.000 | Well, get along your nieces and your nephews and the children in your neighborhood

00:51:14.000 | and teach it to them so that they get the idea from an early age as well.

00:51:19.000 | Yes. And to be honest, you've been a part of that too.

00:51:22.000 | Good, good, my pleasure.

00:51:24.000 | All right, thank you, Jeremy.

00:51:25.000 | We move now to Austin in Louisiana.

00:51:27.000 | Austin, welcome to the show. How can I serve you today, sir?

00:51:30.000 | Hey, Josh. I had something that I hope will be a fun topic today.

00:51:34.000 | I know in the past you've talked to, but you've never done a show on tow rigs,

00:51:41.000 | but you have mentioned it several times kind of in preparation for your family's cross-country travels.

00:51:48.000 | And I'm looking at purchasing a used tow rig type vehicle sometime in the next six months to a year.

00:51:57.000 | And I was just wondering if you had any insights kind of based on your research as to maybe good years,

00:52:03.000 | good models to look for that kind of fill that niche.

00:52:06.000 | How big of a trailer do you anticipate towing?

00:52:10.000 | I'm planning on--we're planning on maybe a large in-bed camper,

00:52:15.000 | but we'd also be using it day to day for moving equipment around, so things like tractors and things like that.

00:52:22.000 | So probably something three-quarter ton would do the job.

00:52:26.000 | Okay. Well, in general, my first thing is I don't think that pickup trucks are a particularly good tow rig if they can be avoided.

00:52:36.000 | So the problem with a pickup truck is you have this big bed that is exposed to the weather.

00:52:44.000 | And although there can be benefits if you're going to put a topper on it, that can be okay.

00:52:49.000 | Even a topper itself can be a problem.

00:52:52.000 | So, for example, if you get a pickup truck and let's say that you're towing a travel trailer in it,

00:52:58.000 | and you put a topper on it, that's a difficult thing to back up often because you minimize your visibility at the back.

00:53:06.000 | And so pickup trucks are not perfect tow rigs in my opinion.

00:53:11.000 | The first thing that I tried to do was I bought a van, and my theory was if I buy a 15-passenger van that can tow my trailer,

00:53:18.000 | then that'll be the best of both worlds because I'll have abundant interior space for passengers.

00:53:26.000 | I'll have abundant secured storage that's accessible from the vehicle, unlike a pickup truck, and then I can tow my trailer on behind.

00:53:36.000 | And so that was the first thing that I did because I think that a big heavy-duty van is a better solution than a pickup truck.

00:53:43.000 | Now, unfortunately, I got a lemon of a van.

00:53:46.000 | I thought I was getting a great deal.

00:53:47.000 | I somehow got a lemon, and my van just couldn't pull it.

00:53:50.000 | I had a 10,000-pound trailer.

00:53:51.000 | My van was rated for 10,000 pounds.

00:53:53.000 | I couldn't get the thing over 51 miles an hour on the flatland.

00:53:56.000 | And so even though I spent significant money at the mechanic getting the van in top shape,

00:54:02.000 | we never did quite figure out what was wrong with the van, but I just could not tow it.

00:54:06.000 | It was a Chevy van with the Chevy V8 in it.

00:54:09.000 | In hindsight, if I'd gotten another kind of van, if I'd gotten, for example, the Chevy van with the diesel, the Duramax diesel,

00:54:17.000 | they have in the Chevy van for a number of years, if I'd possibly, if I'd gotten a Ford van with the power stroke in it,

00:54:23.000 | although those are detuned a little bit and not as strong as a Ford pickup with the power stroke is,

00:54:29.000 | possibly if I'd gotten a van, you know, Chevy had a big, what is it, 8.1-liter big block.

00:54:34.000 | If I'd gotten that instead of the 350, the 5.7, like it would have been a superior -- maybe it would have worked,

00:54:42.000 | and my whole plan would have worked.

00:54:44.000 | But after my bad experience with the van, I threw out my principles on pickup trucks, and I said, "Okay, fine.

00:54:49.000 | I'll just buy a pickup truck."

00:54:51.000 | And so I bought a diesel pickup truck.

00:54:52.000 | So in the world of pickup trucks -- and by the way, obviously the van only really works with a bumper pool trailer.

00:55:01.000 | Now, there is a gadget that a guy I think in Texas makes.

00:55:05.000 | I can't remember the name of it, but he makes this gadget, which is pretty cool.

00:55:08.000 | Actually, it's called a safety hitch, I think, which is pretty cool, which attaches to the back of the vehicle

00:55:13.000 | and would technically allow a van or possibly an excursion to tow a fifth-wheel trailer and to do it safely.

00:55:22.000 | And so I thought about that, but there he sells that gadget for like 12 grand.

00:55:26.000 | And when you go through it, you think, "Okay, I want to buy an excursion, so I'm going to buy a big diesel excursion.

00:55:32.000 | I've got lots of interior space. It's a big SUV. It's going to be rated for the towing.

00:55:36.000 | But I'm going to go ahead and spend another $10,000 on this gadget so I can pull a fifth wheel."

00:55:41.000 | And there's no sense in it.

00:55:43.000 | Unless you have more children than can fit in the pickup truck, it doesn't work.

00:55:47.000 | And so you basically wind up to the back of the pickup truck as a default.

00:55:52.000 | So assuming that you're having a pickup truck, then now what do you choose?

00:55:57.000 | Well, I love truck bed campers.

00:55:59.000 | I think that if you're not too many people, my issue is I have four children.

00:56:03.000 | We don't fit in one.

00:56:05.000 | But if you have up to two children, sometimes three, there are a couple of models where they actually have a bunk

00:56:10.000 | that folds down, so if you're willing to convert the dinette, have the bunk fold down, et cetera, you can do it.

00:56:15.000 | But I think that's one of the best options.

00:56:17.000 | Some of the modern in-bed pickup campers are so comfortable.

00:56:20.000 | They're so luxurious.

00:56:22.000 | And yet you gain so much benefit because you have the versatility of the vehicle.

00:56:25.000 | You don't have to pull a trailer.

00:56:26.000 | Or you can pull a boat.

00:56:27.000 | You can pull your rock-carling Jeep or whatever you've got.

00:56:31.000 | It's just an awesome deal.

00:56:33.000 | And so I've toured a number of them traveling around the country, everything from the small end.

00:56:38.000 | I met a couple that was full-timing in a small pop-up camper in their bed of their pickup truck.

00:56:45.000 | They were using a three-quarter ton Chevy, but they had a -- I think it was from a brand in Colorado.

00:56:50.000 | And they were living full-time in this pop-up camper, and they loved it because they were able to get so far off the beaten path

00:56:57.000 | because of their pickup truck camper that allowed them to go anywhere they wanted, including off-road.

00:57:02.000 | They didn't have to bother with a trailer, and so they were really happy with it.

00:57:05.000 | I also met people who were traveling in the big luxury rigs.

00:57:08.000 | They had a big one-ton pickup truck with a dually and had a big, giant truck camper on the back.

00:57:15.000 | And you go into some of those luxury rigs, and they're awesome.

00:57:18.000 | They're really, really cool.

00:57:21.000 | And so if you're thinking about a pickup bed camper, the first thing that you have to look at is the payload numbers.

00:57:29.000 | The payload numbers are more important than the engine numbers.

00:57:32.000 | And if you're going to get a large camper, you've got to get -- if you're going to get a big one, you've got to get a one-ton truck with a dually

00:57:41.000 | because the dually makes a massive difference in the payload numbers and a massive difference in your experience with the payload numbers.

00:57:48.000 | And so that's going to be your biggest thing.

00:57:50.000 | In addition, if you're going to go with a fifth wheel, fifth wheels -- the majority of fifth wheels that you see being pulled by a three-quarter ton

00:57:58.000 | or even a one-ton pickup with single rear wheels, they're over the specifications.

00:58:02.000 | And so if you're going to tow a fifth wheel, you need payload capacity, and payload capacity comes with having a dually with dual rear wheels.

00:58:09.000 | So definitely would recommend that you get clear on what you're doing because that's going to naturally drive you in the direction of a dually,

00:58:17.000 | or you'll naturally see, you know what, I don't need a dually, and so I can get by with a three-quarter ton or one-ton truck with single rear wheels.

00:58:25.000 | With regard to engine considerations, obviously here you need to think about your application again.

00:58:31.000 | So obviously most of us enjoy the power of a diesel pickup truck.

00:58:37.000 | And if you're going to be towing a big trailer, there's no question that a diesel pickup truck is going to be a superior option for you.

00:58:46.000 | And there are many good options that you can choose to -- many good arguments that you can advance as to why you should buy a diesel pickup truck.

00:58:54.000 | Just the resale argument alone I think is very, very well worth considering.

00:58:59.000 | Diesel pickup trucks are insanely expensive.

00:59:02.000 | They're expensive new, and they're insanely expensive used.

00:59:05.000 | And so when you buy one, you can be pretty well assured in the current market tastes of having a very strong marketplace for it.

00:59:15.000 | And so when you run the numbers about buying a new one versus buying a new diesel and paying an extra $6,000, $8,000 for the engine that you want

00:59:26.000 | versus buying a brand new truck with a gas engine, even a big gas engine, the new diesel has such a demand in the marketplace that you could probably get your money out on the resale.

00:59:40.000 | That said, modern diesel engines are awesomely built.

00:59:46.000 | They're also so stinkin' complex that just caring for them is going to cost a lot of money.

00:59:55.000 | There is nothing simple about a modern diesel engine.

00:59:58.000 | And after all of the emissions controls that are on them now, you've got this multi-thousand dollar def system.

01:00:05.000 | You've got this multi-thousand, just the exhaust system on the thing alone to swap it out is a few thousand dollars.

01:00:11.000 | Now, obviously, you can take a modern diesel engine, you can delete all the emissions off of it, but then that kills your resale value.

01:00:18.000 | I wouldn't choose to buy a truck that's been deleted, even though I acknowledge that if all of the emission stuff has been deleted off the truck, it's probably a better truck.

01:00:29.000 | But you just don't know what's been done, and you don't know if it was done right.

01:00:32.000 | So I'm generally opposed to deleting the emissions off the vehicle because it will harm your resale value.

01:00:40.000 | And so as I see it, your first question is, do I need the diesel?

01:00:44.000 | So if you're towing a big camper, you need the diesel.

01:00:48.000 | If you're towing a big trailer, if you're going to be towing equipment, you need the diesel.

01:00:51.000 | But the argument on that is less clear than it once was.

01:00:55.000 | So let's say that you do this interesting analysis.

01:00:58.000 | Let's go back and you say, what was a truck in 2000?

01:01:04.000 | Let's go back and you pick a one-ton dually from 2000, a 2000 F-350 with the power stroke.

01:01:10.000 | And you look at the horsepower and the torque ratings on that engine versus looking at a modern big block gas engine.

01:01:18.000 | I haven't done this with all the brands, but your modern big block gas engine is probably going to have higher power output than that big old diesel did back then.

01:01:27.000 | And so if you look and say, what do I actually need?

01:01:31.000 | Chances are most of us don't need the diesel.

01:01:35.000 | It's just harder to find a big gas engine.

01:01:38.000 | And so where another benefit of a gas engine, especially if you're doing something like a truck camper, is you get more payload.

01:01:46.000 | So if you get a dually pickup truck, and I don't know if you need four doors or not, but let's say you're setting up a rig for a truck camper.

01:01:55.000 | An ideal rig for a truck camper is a dually pickup truck with an extended cab, but not a crew cab, but an extended cab.

01:02:03.000 | So you have a little bit of space and then a big gas engine in it.

01:02:06.000 | And that will give you more payload for your camper.

01:02:08.000 | And the engine is far superior to anything that you need.

01:02:11.000 | And when you run the numbers on the cost of gasoline versus the cost of diesel, I'm convinced that the vast majority of any efficiency savings for anybody except a professional hauler will often disappear.

01:02:25.000 | I mean, it's stunning when you see how expensive diesel is at this point in time, because it's got to be so highly processed to meet the emission standards.

01:02:32.000 | Gasoline, even if you give up some fuel mileage, is just going to be a superior option.

01:02:37.000 | And so I would have no fear of just buying a big gas engine and doing that for most of my applications.

01:02:45.000 | Even pulling trailers, it's only when you get into 20,000 pound trailers and whatnot, where there's no question you have to have the diesel engine because you have to have the power.

01:02:56.000 | So think really carefully about your application.

01:02:58.000 | If I could avoid it, I would avoid personally a diesel engine and in favor of a gas for those reasons.

01:03:06.000 | But that's less common.

01:03:08.000 | Now, are you thinking about buying a new truck or a used truck?

01:03:11.000 | No, I'm definitely looking at a – I call it the grandpa truck.

01:03:16.000 | So what I have been looking at is an early to mid-2000s diesel pickup truck that has somewhere in the range of like 100,000 to 150,000 miles.

01:03:26.000 | In that way, it still has a lot of life in it, but it meets all of our needs.

01:03:32.000 | Okay. So in that range, what your obvious solution, in my opinion – I did the exact same analysis.

01:03:37.000 | The obvious solution is you want to get somewhere between a '99 to a 2003 Ford F-250 or F-350 with a 7.3 power stroke.

01:03:47.000 | Now, I'll give you a couple of wrinkles on that.

01:03:50.000 | But in that vintage, in that era, here's like of the big three, you can – first, let's all acknowledge that there's plenty of good trucks and they can all work.

01:04:00.000 | But you have two real clear winners in that era.

01:04:04.000 | Before Chevy introduced the Duramax, your two real obvious clear winners were, number one, the Ford power stroke, and number two, the Cummins that was in the Dodge.

01:04:14.000 | And so the Cummins, without question, is an awesome engine, but the complaint from many Dodge owners and mechanics is that the Dodge truck wasn't as awesome as its engine was.

01:04:25.000 | And so if you go back and you drive – as I have a number of times – you go back and you drive a truck from that era, a Ram from that era, it's very hard to make it – it's very hard to enjoy it.

01:04:38.000 | You're wandering all over. The steering is sloppy. The dashboard is rotten.

01:04:42.000 | It's just – even though the engine will run forever, it's not a great engine.

01:04:47.000 | And so the best all-around mixture of fit and finish of the truck and a great engine was the 7.3-liter Ford power stroke.

01:04:58.000 | And so just for historical context, the 7.3-liter power stroke was advertised by Ford as the million-mile motor.

01:05:10.000 | It was a proven old-fashioned design advertised by Ford as the million-mile motor.

01:05:15.000 | They tuned it up massively when Ford introduced the Super Duty series in '99.

01:05:20.000 | Prior to '99, they had the 7.3-liter engine, but it was not nearly as strong as they tuned it up in '99.

01:05:30.000 | And so I would avoid a pre-'99 Ford because the other thing is that parts and whatnot are getting pretty hard to find for those trucks.

01:05:38.000 | So the power output stinks and the parts are harder to find, even though they look cool.

01:05:42.000 | You got that old classic square body design.

01:05:45.000 | And if you gave me the best deal on one, obviously, it's always worth thinking about the deal that you can get, but the parts are hard to find.

01:05:50.000 | So from '99 to '03, Ford ran the 7.3-liter diesel.

01:05:54.000 | And the 7.3-liter diesel is a bulletproof engine.

01:05:59.000 | It's a proven design. It's bulletproof. It doesn't have any of the emission stuff on it.

01:06:05.000 | The tailpipe stinks like anything, but it's powerful enough for the vast majority of applications, and it really, really works well.

01:06:14.000 | And you can still find enough good trucks in that vintage from '99 to '03 that you have a good selection.

01:06:21.000 | All the parts are available.

01:06:22.000 | You can swap in many of the modern Super Duty parts into them.

01:06:26.000 | So if you don't like the dash, put in a dash from a 2013, right?

01:06:29.000 | If you don't like the seats, swap in some King Ranch seats from a wrecked 2016.

01:06:37.000 | It's all interchangeable.

01:06:39.000 | But you have the engine, and you have the engine in them, which is your key thing.

01:06:44.000 | What's the weak point in them?

01:06:45.000 | The weak point in them is your automatic transmission and the fact that they're getting old.

01:06:49.000 | And people know that the 7.3 is valuable, and so they command a bit of a premium.

01:06:54.000 | Now, the other thing that I think is worth thinking about is in 2004, Ford swapped out the 7.3 for the 6-liter.

01:07:03.000 | And the 6-liter is actually a really well-designed engine, but Ford rushed it to market.

01:07:09.000 | And so because they rushed it to market, it came with -- they ran it to market with a bunch of problems in it because --

01:07:18.000 | so they redesigned the motor because they had to meet the emission standards.

01:07:22.000 | So that's when they designed the 6-liter.

01:07:23.000 | But when they came to market, it had a whole bunch of things which made it really, really unreliable.

01:07:28.000 | And so in the beginning years, it acquired a massive reputational problem because it was an extremely unreliable engine because everyone was comparing it to the 7.3.

01:07:38.000 | Now, at this point in time, every single thing that can go wrong with the 6-liter is known.

01:07:44.000 | And so you can take a 6-liter and you can fix every one of those problems, and you can have a better engine arguably than the 7.3 if you fix it.

01:07:53.000 | The problem is if you buy a 6-liter, you don't know if everything has been done properly or not.

01:07:58.000 | 70% of the ads for a 6-liter will say the engine has been bulletproofed.

01:08:03.000 | But was it done well? Was it not done well?

01:08:05.000 | And so there's a guy in Georgia, the guy who runs the website, I think it's Powerstroke Help, that his resource -- he's got everything on YouTube, everything there.

01:08:13.000 | That's where I would encourage you to look at.

01:08:15.000 | But if you find a low-mileage 6-liter and you send it to him and you give him another 15 grand, he'll make that thing awesome.

01:08:24.000 | He'll make it perfect.

01:08:25.000 | And one of the big upgrades that you get when you move to a 2004 and newer is you get modern suspension instead of the old-fashioned suspension of the previous generation.

01:08:34.000 | You get a lot of modern amenities that are nice to have.

01:08:38.000 | And so you got to decide what's more important and what's not.

01:08:41.000 | If you got a little bit more money, I think it's a great deal because you can get a 6-liter, you can bulletproof it, and you got a really good truck.

01:08:47.000 | And yet it's still -- it was before all of the stuff that's on the 6-7, et cetera.

01:08:53.000 | Don't buy a 6-4. It's a catastrophe.

01:08:56.000 | The 6-7s that Ford then moved to after the 6-4 are pretty good.

01:09:00.000 | And, I mean, we go all day on this stuff.

01:09:02.000 | But if I were doing it -- so what I did was I bought a 2000 and -- what year was it? -- 2002 F-250 with a 7.3.

01:09:10.000 | That was the truck that got stolen from me.

01:09:13.000 | And then I replaced it with another one.

01:09:15.000 | I bought a 2003 F-250.

01:09:17.000 | And that truck was great to me.

01:09:20.000 | I still actually own -- if you want to buy my 2002 F-250, I'll sell it to you.

01:09:24.000 | It's in Florida.

01:09:25.000 | But I actually still own the other truck that it's my USA truck that when I go to the USA, then I have that to drive.

01:09:31.000 | But it's a really, really good option.

01:09:34.000 | And so if you're looking, you can do it for under $10,000 without question.

01:09:38.000 | You can probably do it from anywhere from $6,000 to $8,000 to find a good truck that's going to be in good shape.

01:09:43.000 | Your weak point is always going to be your transmission.

01:09:45.000 | So if you start pulling big trailers and whatnot and with an automatic transmission, be nice to it.

01:09:50.000 | At some point, it may fail.

01:09:52.000 | But if it does fail, I don't think it's the worst thing in the world.

01:09:54.000 | But that's what I did.

01:09:56.000 | And then doing it over again, I would do exactly the same thing over again.

01:10:01.000 | >> Okay, awesome.

01:10:02.000 | Thank you.

01:10:03.000 | And I might have to reach out to you on the Patreon page about that truck if you're looking to unload it.

01:10:07.000 | >> Yeah, send it to me.

01:10:08.000 | And I'll -- it's sitting -- I'll give you all the details privately.

01:10:11.000 | But it's -- I don't -- I'm not real interested in selling it because it's got a -- excuse me.

01:10:17.000 | It's got a rebuilt title.

01:10:18.000 | I rebuilt it after it was stolen from me.

01:10:20.000 | And so if I put it on the market, then I'll get beat up by a buyer on the market who wants to do that.

01:10:27.000 | So I'm just like, "I'll keep the truck.

01:10:28.000 | It's a good truck.

01:10:29.000 | And that way, if I buy another camper in the U.S., I've got a truck ready to go."

01:10:32.000 | But on the other hand, I don't really like having a truck just sitting there.

01:10:35.000 | And it's sitting in my mechanic's shop, and he takes care of it for me.

01:10:38.000 | But, yeah, send me a message, and we'll chat.

01:10:40.000 | I'll give you the details and see if it will work for you.

01:10:42.000 | All right.

01:10:43.000 | >> Gotcha.

01:10:44.000 | We move on to -- looks like Andy.

01:10:48.000 | Andy in Indiana.

01:10:49.000 | Andy, welcome to the show.

01:10:50.000 | How can I serve you today, sir?

01:10:52.000 | >> Joshua, how's it going?

01:10:54.000 | I will -- can you hear me?

01:10:57.000 | >> Yeah, I can hear you.

01:10:58.000 | I just was feeling a little embarrassed about the fact that I turned radical personal finance into truck talk.

01:11:01.000 | And, like, if I had a producer, the producer would say, "What is wrong with you, Joshua?

01:11:07.000 | Nobody cares.

01:11:08.000 | Get on with it."

01:11:09.000 | So go ahead.

01:11:10.000 | Let's talk about something different than trucks.

01:11:11.000 | >> I was actually just going to say I work in the diesel engine development industry, and I would agree with everything you said.

01:11:18.000 | Except certain markets and certain trucks, it probably doesn't matter if you delete emissions.

01:11:25.000 | Where I live, everybody deletes emissions.

01:11:28.000 | And so that's very normal.

01:11:30.000 | I wouldn't buy one like that because people who do it tend to rag their trucks pretty hard.

01:11:35.000 | But I would have no problem selling one that I had deleted.

01:11:39.000 | So, otherwise, yeah, I would agree with your analysis.

01:11:42.000 | >> Good.

01:11:43.000 | Do you have any additional advice, anything I missed in that kind of discussion?

01:11:47.000 | >> No, generally.

01:11:49.000 | So 2007 was the year that the emissions really got a lot tighter.

01:11:53.000 | If you look at a Dodge truck, pre-2007, they're going to be a lot cheaper to maintain as far as the emissions stuff.

01:12:01.000 | I'm not as familiar with Ford's engines, but I'd say that's probably similar in that that lines up with the timeline.

01:12:08.000 | And then the only other thing, I don't know if Ford offered different transmissions.

01:12:13.000 | Currently, Dodge, where I am now, sells a couple different transmissions.

01:12:20.000 | And so if you read the van and you see which transmission you got, it makes a huge difference in the durability and towing ability of that truck.

01:12:31.000 | So I don't know.

01:12:32.000 | You might check into that looking at those older trucks.

01:12:34.000 | If there were a couple different transmissions offered, there might be a big difference between those.

01:12:39.000 | But I don't know the answer to that question.

01:12:41.000 | >> I meant to say, and I forgot to say on that subject, I was going to say to the caller, you could do what my cousin does.

01:12:47.000 | My cousin is a rancher.

01:12:49.000 | And so they've got half a dozen pickups all over his ranch.

01:12:52.000 | What he does is he buys a Ford pickup and he puts a Cummins into it.

01:12:58.000 | So he takes the Cummins out of a Dodge, sticks it in the Ford pickup.

01:13:02.000 | And he has two of them.

01:13:04.000 | And that's what he drives every day.

01:13:05.000 | And that's what he loves because then he gets the best of both worlds in his opinion.

01:13:08.000 | So that's all.

01:13:09.000 | If you get into it, obviously those are some interesting solutions as well if you can trust the person who did it.

01:13:16.000 | >> Yeah, they call that a "Fummins."

01:13:18.000 | >> Yep, exactly.

01:13:19.000 | All right, Andy, go with your question, sir.

01:13:22.000 | >> Okay, so my question was -- I actually had a quick question and a longer question, if you don't mind.

01:13:28.000 | My quick question, from what I have heard you say about mortgages and stuff, I don't -- so I put my mortgage into forbearance.

01:13:40.000 | When COVID hit, I hadn't had any income problems, but I thought, well, I might, and this requires clicking two buttons and helping me stockpile cash.

01:13:48.000 | So I have been in forbearance since April.

01:13:50.000 | I have all that money sitting in an account ready to be paid.

01:13:54.000 | Mortgage interest rates are lower now, so I asked them to look at a loan modification, see if I could get the interest knocked down a little bit.

01:14:04.000 | I bought the house a year ago, so they're not way lower than when I bought.

01:14:09.000 | I'm thinking I could get three-quarters to one point.

01:14:13.000 | But I wanted to look into that because I was reading through their paperwork.

01:14:21.000 | Some of the paperwork says up to, and some of it says will be 40 years if they modify your loan.

01:14:27.000 | So I go from a 29-year mortgage at three and three-quarter percent to hopefully at three or two and three-quarter percent, and then a loan that could be 30 to 40 years long.

01:14:43.000 | I kind of like that because it lowers my payment, and I can always pay extra to pay that off.

01:14:50.000 | I don't think there's a big risk there other than me being irresponsible with my money.

01:14:56.000 | I'd like to pay my house off early anyway.

01:14:58.000 | Do you see any problems with that analysis?

01:15:00.000 | No.

01:15:01.000 | No, you're hitting all the right buttons.

01:15:04.000 | So if they'll give you a better deal, there's never a reason not to try for a better deal.

01:15:08.000 | Just calculate the expenses.

01:15:10.000 | So if when they give you an offer and they say, "Here's what the new set of closing costs would be.

01:15:15.000 | Here's what we'll give you," et cetera, then calculate them side by side and see how long it will take you to recoup those new closing costs and other expenses.

01:15:23.000 | But as long as you're doing that calculation, no, I see no downside to that plan.

01:15:28.000 | Okay, great.

01:15:29.000 | I thought so.

01:15:30.000 | I just thought I'd run that by you.

01:15:34.000 | Do you have time for another, probably longer question?

01:15:37.000 | Yep, go ahead.

01:15:38.000 | How do I get more conflict and unpleasantness in my life?

01:15:45.000 | I am pretty conflict-averse.

01:15:48.000 | I don't like arguing with people.

01:15:50.000 | I don't like tense situations, et cetera.

01:15:53.000 | I physiologically get very stressed by that.

01:15:56.000 | I've been fortunate to have a pretty calm, peaceful life with my family of origin, my current family, and at work where I've never been in any sort of regularly conflict or abusive situation.

01:16:08.000 | I don't have a lot of experience with that.

01:16:11.000 | I have experienced it a few times, and I think I handle it okay.

01:16:16.000 | I mean, I know what to do, and I pretty well stick to my guns on things, but it is extremely stressful for me and hard to know what to do if it's not something -- you know, I get stressed out and don't know what the right decision is to make in the moment if I haven't thought about that previously.

01:16:33.000 | So I would be interested in doing some things to expose myself to that stress more often and sort of strengthen that muscle that aren't actually risky.

01:16:47.000 | So, you know, if I go to -- you've talked a lot about Toastmasters, which I've been in Toastmasters.

01:16:52.000 | I've done a lot of public speaking training, and that's great, but it's not -- there's no conflict there, right?

01:16:58.000 | Everybody is your friend.

01:16:59.000 | They want to support you, et cetera.

01:17:01.000 | It's not an angry person cursing in your face sort of situation.

01:17:06.000 | And then, you know, on the other side of that, I have a couple rental houses, and a couple times I've got into disagreements with a tenant that -- not terrible, but stressful.

01:17:17.000 | You know, in that situation, that's a fairly high-stakes negotiation.

01:17:22.000 | Do you have any ideas of ways to expose myself to that conflict in a fairly low-stakes situation?

01:17:31.000 | Have you ever done any kind of fight training?

01:17:34.000 | Fight training, meaning like physical boxing, MMA type stuff?

01:17:38.000 | Boxing, MMA, yeah.

01:17:39.000 | I have not.

01:17:40.000 | So that's the first thing that occurs to me, and I say that because it's actually something that I'm personally interested in pursuing myself.

01:17:49.000 | It was just right before COVID and shut down all the gyms.

01:17:52.000 | I had just decided to join a boxing gym.

01:17:54.000 | And as I've thought about it over the years -- so you know me fairly well -- as I've thought about it over the years, I've realized -- I think I believe that at this point that -- I've thought about this a lot with regard to my sons.

01:18:13.000 | And I've thought, "What can I do for my sons?"

01:18:16.000 | I've always had kind of this interesting experience.

01:18:19.000 | Number one, being physically large my entire life, I've never been picked on by bullies in the way that many smaller people are.

01:18:28.000 | And so I never had to prove my strength.

01:18:30.000 | I never had to prove anything.

01:18:31.000 | And I've always been a peace-oriented guy.

01:18:34.000 | I've always been -- I don't like conflict either.

01:18:37.000 | I'm generally the guy who's trying to bring conflict resolution, generally trying to say, "Guys, let's just sit down.

01:18:42.000 | Let's talk about it," you know, blah, blah, blah, blah, blah.

01:18:44.000 | I've studied conflict resolution.

01:18:45.000 | I've studied the subjects.

01:18:47.000 | I'm pretty good at it.

01:18:48.000 | I'm pretty good at finding middle ground, et cetera.

01:18:51.000 | And my father always discouraged any kind of physical contact.

01:18:55.000 | So, for example, even when we were boys, he discouraged us to wrestle.

01:19:00.000 | He discouraged that.

01:19:01.000 | My dad wrestled in high school, but he came to a point when he was older, he discouraged us from doing that.

01:19:06.000 | But as I've gotten older, I've come to think that there's actually something really valuable about knowing that you can fight.

01:19:14.000 | And for all of my skills, I'm not a physical fighter.

01:19:20.000 | I've never thrown a punch.

01:19:22.000 | I've never been punched in the face.

01:19:24.000 | And I don't think that, you know, necessarily being able to throw a punch is, you know, step one.

01:19:30.000 | I've always been of the opinion that you either run away from a fight or you shoot the guy that's going to kill you, right?

01:19:36.000 | And maybe there's a place for an in-between, but those have always been my two things.

01:19:40.000 | Like I always wear good shoes so I can run away and wear a gun so if I have to shoot, I can.

01:19:45.000 | And then take training with a gun.

01:19:47.000 | But I've realized that I think I'm missing something in my masculinity that I should have because of limited exposure to violence.

01:19:57.000 | And I've realized that there's something about people who fight that it does something for them.

01:20:05.000 | It changes them in some way.

01:20:07.000 | And I've realized that – and ask me in time when I can actually – when the gyms open up and I can join a boxing gym.

01:20:15.000 | But I think there's something that I'm missing in my personality similar to what you're describing because of that lack of physical contact sport.

01:20:28.000 | And so for me, for my own personal development, what I decided I'm going to do, I'm going to join a boxing gym.

01:20:34.000 | I've decided to do boxing instead of anything else because I think personally my analysis of it is probably the most useful martial sport compared to the other ones that are not quite as useful in the street.

01:20:47.000 | Not that I – I don't want everyone to get into a fist fight on the street, but you figure why you're going to do something.

01:20:52.000 | I'm not interested in a purple sash and that's for some people.

01:20:58.000 | But anyway, I'm going to join a boxing gym, an old-fashioned boxing gym and learn how to box and use it for exercise.

01:21:04.000 | That's been another thing.

01:21:05.000 | It's like, okay, what kind of exercise would I enjoy?

01:21:07.000 | I think I would enjoy a lot of the components of exercise of boxing.

01:21:10.000 | We'll see when I try it.

01:21:11.000 | And then I also just want to learn how to get hit in the face and I want to learn how to hit someone in the face.

01:21:15.000 | And I think that there's going to be some benefit that I'll get in my confidence from it, from having read the stories of other people, talked to people about it, et cetera.

01:21:24.000 | I think that that's going to be a change in me.

01:21:27.000 | And I'm cautious, but at this point I think I'm probably going to take my eldest son with me and give him a chance to learn to box as well.

01:21:34.000 | Because while I appreciate my father's emphasis on peacefulness and I desire to always be an extremely peaceful guy, I think the lack of exposure to that can harm your self-confidence.

01:21:50.000 | And so what I would say is specifically with regard to confidence and conflict and whatnot, there's a place for the witty – it was going to sound good before I started it.

01:22:01.000 | There's a place for the witty repartee of a good philosophical debate.

01:22:06.000 | At the end of the day, I think probably just cut to the chase and consider joining a boxing gym for a couple of months and see if it helps.

01:22:13.000 | That's what I would say as a first step.

01:22:15.000 | Just join a gym for a few months and see what your experience is, see what you learn, and see if it gives you anything of what you're looking for.

01:22:21.000 | And then if when I can join a gym myself, then I'll report back on the results of my self-improvement efforts as well.

01:22:29.000 | That seems like a good idea. I had not thought about that.

01:22:35.000 | Do you – I guess for a personal question as to what you're trying to feel – do you – I see there sort of a middle ground of I've been in situations where punching someone in the nose was not the answer, but it basically was just to they're mad and I just have to say, "Look, this isn't my problem.

01:22:53.000 | You're wrong. I'm right and I'm not going to help you. I'm not going to solve this. Go figure it out yourself."

01:22:59.000 | And they're mad, yelling, "I'm going to blah, blah, blah," and you just have to walk away.

01:23:05.000 | And that's the sort of thing that just really is excruciatingly difficult for me to do.

01:23:13.000 | Yeah, I don't know.

01:23:17.000 | I feel that stuff pretty intensely too.

01:23:20.000 | I marvel a lot of times at people who are able to go through experiences and go through things where they just – they don't care.

01:23:28.000 | They generally don't seem to care what other people think, what other people think about them, what other people think.

01:23:33.000 | And I'm probably like you. It's probably why you like listening to my show.

01:23:36.000 | I'm pretty emotional and pretty empathetic.

01:23:41.000 | So, I don't know. I do know that while I still think of myself as fairly empathetic, I have stopped caring nearly as much as I used to.

01:23:54.000 | And part of it I think would be due to some of the conflict and exposure that I've experienced doing radical personal finance.

01:24:00.000 | It's thickened my skin.

01:24:02.000 | And I think at the end of the day, what you're going to find is the only way to get comfortable with conflict is to go through it.

01:24:09.000 | And so, if you choose what kind of conflict you want and choose what kind of conflict you don't want and then start to do it, in time it'll get better.

01:24:18.000 | But I think it's probably just a muscle like anything else.

01:24:21.000 | And those of us who had the personality that we sought to avoid conflict, we didn't get the same kind of exposure that other people did in an early age to those results.

01:24:33.000 | Whereas other people at an early age, they experienced so much conflict, they just stopped caring.

01:24:38.000 | They stopped caring how the other guy felt.

01:24:39.000 | They just walked away.

01:24:40.000 | And so, I don't think it's healthy to not care about how you leave other people.

01:24:45.000 | But I guess – but I don't know of any tactic that would do it.

01:24:52.000 | I mean, I was tempted to make a crack about go buy yourself a MAGA hat and go and wear it to some place that MAGA hats are not encouraged.

01:25:03.000 | But at the end of the day, like most of that stuff is counterproductive as well.

01:25:07.000 | So, the best I got for you is maybe a fight gym or maybe start a blog and just start putting your ideas out there.

01:25:13.000 | But I guess what I would emphasize is I don't think that everybody has to have the same kind of personality.

01:25:20.000 | And so, while I admire people who seem to not care, like I admire President Trump for his seeming like lack of – that's not true because he obviously cares tremendously what other people think.

01:25:35.000 | I admire people like – I admire people who are in those like massive public situations where everybody's – half the world hates them and yet they just keep pressing forward.

01:25:46.000 | But I don't particularly want to become them.

01:25:49.000 | So, short answer, try boxing maybe.

01:25:53.000 | Longer answer, I don't know.

01:25:54.000 | But I'll think about it.

01:25:55.000 | And if I come up with something, then I'll let you know.

01:25:58.000 | It's an interesting question.

01:25:59.000 | I don't think – what I was trying to get out is I don't think you have to intentionally try to change your personality.

01:26:05.000 | I think that the best solutions are not to try to become somebody who we're not but to rather to say where are my strengths and how are those strengths best understood and then how can I control for the weaknesses.

01:26:18.000 | So, the fact that you feel dispute very personally when that happens, I don't think is a negative thing.

01:26:27.000 | I think it's just something that is.

01:26:29.000 | And so, I feel the same way, right?

01:26:31.000 | If I have a relationship that is out of whack, if somebody just decides they don't like me, they're going to leave or whatever, it causes me – I get sick to my stomach because I'm like but I care about you and I want the best for you and don't you understand that?

01:26:46.000 | Whereas other people just – they're oblivious to it.

01:26:49.000 | And so, I don't know.

01:26:51.000 | I don't feel like I need to change.

01:26:52.000 | I feel like I want to keep my empathy.

01:26:54.000 | I want to keep my care for other people but I need to know in my head that I can't allow this emotion to control my life.

01:27:03.000 | And so, that's emotion.

01:27:05.000 | Lock it up.

01:27:06.000 | Give it a few days.

01:27:07.000 | Everything will look better in a few days and then move on with life.

01:27:10.000 | I don't think you should try to change yourself into somebody that you're not in that way.

01:27:16.000 | Yeah.

01:27:17.000 | I mean I think you're saying what I'm hoping.

01:27:20.000 | I feel like I do rental houses and so I have already had and if I continue to do that, I assume we'll have in the future some intense discussions with tenants and I want to make sure I don't give off this vibe of oh, this is a guy you can walk all over because he just wants you to be happy and then I agree to things that I should not agree to in the heat of the moment that hurts my family or myself financially or even worse, potentially,

01:27:49.000 | more.

01:27:50.000 | I haven't had any sort of situation like that but I know that could happen or even just hiring and firing contractors like the idea of having to go up to a contractor and say, "Hey man, you didn't do your work.

01:28:01.000 | Here's what our contract says that I wrote carefully so that I could not pay you near as much as you're supposed to.

01:28:08.000 | If you screwed it up, you screwed it up.

01:28:10.000 | You're not getting paid.

01:28:11.000 | So, you're gone.

01:28:12.000 | Goodbye.

01:28:13.000 | Here's your 25% of the payment or whatever."

01:28:15.000 | Something like that would be excruciating to contemplate and I'm not sure I could actually follow through on it.

01:28:22.000 | So, I just want to be developed enough to not do that every day.

01:28:27.000 | I don't want to look like that but have the strength to do it if and when I need to.

01:28:30.000 | Well, the way that I account for things like that is just simply to focus on leading up front with the information and so I do think you need to pay attention.

01:28:42.000 | If you're going to be in real estate and you're going to be dealing with contractors, you've got to plan for that.

01:28:47.000 | That's going to happen.

01:28:48.000 | And so, the way that I would plan for that is I would say, "I don't love confrontation.

01:28:52.000 | So, what I need in order to feel comfortable with confrontation is I need to be confident that I have communicated very clearly and I need to lay out in advance what the expectations are."

01:29:04.000 | And so, the time to solve for that conflict is in advance.

01:29:08.000 | At the first meeting with the contractor, here's what I expect.

01:29:11.000 | If you do this, here's what I will do.

01:29:13.000 | If you don't do this, here's what I will do.

01:29:15.000 | And then, as you say, lay it out on paper.

01:29:17.000 | Make it clearly.

01:29:18.000 | Listen, I want you to know I'm expecting this.

01:29:20.000 | And then, when somebody doesn't – when they break the contract or they don't meet your expectations, then you say, "This is what I'm doing," and you just discipline yourself not to feel bad.

01:29:33.000 | You communicated in advance.

01:29:35.000 | You warned everyone that needed to be warned.

01:29:37.000 | So, I think you just discipline yourself in that way.

01:29:40.000 | But that's how I handle that whenever I have discomfort is I know I'm going to be in a difficult situation, so let me plan ahead for it.

01:29:48.000 | All right, final call of the day.

01:29:49.000 | We go to Mark.

01:29:50.000 | Mark, welcome to the show.

01:29:51.000 | How can I serve you today, sir?

01:29:52.000 | Thank you, Joshua, for taking my call.

01:29:55.000 | We have a question on a real estate purchase that essentially the disclosure shows that the reserves are at 25%, which I guess are not considered adequate for the HOA that we're looking to purchase in.

01:30:14.000 | And just wanted to get your input on that.

01:30:18.000 | We currently live in a condo, and we're looking to move to a bigger unit.

01:30:22.000 | So, if I understand the question, you're looking to move to a bigger unit, you're looking to buy a condo, and as part of that condo purchase, you will have to be involved in the homeowners association.

01:30:35.000 | But the disclosure documents of the homeowners association indicate that the homeowners association does not have the amount of money that they should have in their financial reserves.

01:30:46.000 | Is that correct?

01:30:47.000 | That's correct.

01:30:49.000 | Do you know why they don't have enough money in reserves?

01:30:53.000 | You know, I don't really know.

01:30:56.000 | It sounds like maybe the board was just not planning ahead over the years, because, you know, in our current HOA, we have sufficient reserves, even at 50% level, and they're down at 25%.

01:31:10.000 | Well, so it is a major risk.

01:31:17.000 | So let's start from the big picture.

01:31:18.000 | I think it would be silly for me to say something like, "Oh, just never buy an HOA," although that's how I feel.

01:31:24.000 | So what state or where is this HOA going to be located?

01:31:29.000 | California.

01:31:30.000 | Okay.

01:31:31.000 | So I don't know California law, but I do know Florida law with homeowners associations.

01:31:36.000 | And if California law is anything like Florida law, the homeowners association has vast power, and you have very little power.

01:31:48.000 | And so you can understand why that is.

01:31:51.000 | It's not that it doesn't make sense, but let's talk about the powers that a homeowners association has, at least in Florida, while you recognize this is state-dependent.

01:31:59.000 | And so I don't know California.

01:32:01.000 | You need to consult somebody who knows California law.

01:32:03.000 | But, for example, in Florida, if the homeowners association says that you have to pay something, you have to pay it.

01:32:10.000 | If they squander the money or they use it poorly, you have almost no recourse other than to get involved in the board and go through the formal process of being part of the board.

01:32:20.000 | And even to the point where if you don't pay your homeowners association dues or you don't pay your homeowners association assessments, the homeowners association has the legal power to foreclose on you to sell your property at auction in order to recoup their dues.

01:32:37.000 | And they do.

01:32:38.000 | They are very aggressive, at least in Florida, in my experience.

01:32:42.000 | And so the quality of the homeowners association board is of utmost importance.

01:32:47.000 | But when you deal with the homeowners association board, you're often dealing with a very unwieldy entity, a very unwieldy political entity that's subject to major political pressures, that's subject often to major infighting, to major conflict, et cetera.

01:33:04.000 | It's very, very troubling.

01:33:06.000 | And if the homeowners association doesn't run its affairs well, which one of your indications is that it's underfunded, so something is going on, there's no promise that that's going to get better.

01:33:18.000 | Now, it could, right?

01:33:19.000 | I've had family members that their HOA was total failure.

01:33:23.000 | The community was totally mismanaged.

01:33:26.000 | But basically, they came in.

01:33:28.000 | They got a new board elected.

01:33:29.000 | They did some shareholder, some unit holder activism to get some certain people elected.

01:33:35.000 | Those certain people fired the management company, hired a new management company, and over a period of years, they were able to turn the HOA around.

01:33:42.000 | But that's a very significant effort and required a tremendous amount of time, and there was no surety of success.

01:33:52.000 | And the problem is that your investment in the home is going to be largely very driven by how well that HOA does.

01:34:01.000 | If the HOA is broke and the building starts to fall apart, then that's going to dramatically impact the value of your unit.

01:34:09.000 | If the building starts falling apart and repairs aren't done, that's going to dramatically affect the -- well, I've repeated myself -- the value of the unit.

01:34:18.000 | If repairs are done and now there's excess assessments, well, that's going to dramatically assess the -- address -- change the profitability of your investment.

01:34:27.000 | And what's more is now that's part of the record, that these assessments have been done.

01:34:32.000 | And so it's a very, very significant risk.

01:34:37.000 | It may be an unavoidable risk, and it may be a small part of your life.

01:34:42.000 | So the way that I would look at it would be what are the total benefits I'm going to get?

01:34:46.000 | How -- okay, am I going to get a bigger unit?

01:34:48.000 | Are there other options?

01:34:49.000 | Sometimes there's not, right?

01:34:50.000 | Sometimes your back is against the wall and you've got to go into a questionable situation and hope for the best.

01:34:57.000 | But I think you should be very, very, very cautious.

01:35:02.000 | In a situation like that, I would think that if you could find a decent rental deal, it might be worth renting for a time until you see how things are going to shake out.

01:35:12.000 | That has pros and cons.

01:35:14.000 | But you should definitely be concerned because if you see signs of mismanagement and if you see signs of financial mismanagement, there's no guarantee that things are going to get better.

01:35:26.000 | If things don't get better, it can make a big, big impact on your life.

01:35:31.000 | And where there is one form of mismanagement, there may be other forms of mismanagement as well.

01:35:36.000 | So you should be very, very careful.

01:35:42.000 | Can I ask a follow-up question?

01:35:45.000 | Yes.

01:35:47.000 | So if we stay in our current unit, it is paid off, would you recommend borrowing money out of it, meaning do a cash refi so that maybe if things go down later in the next year, it might give us more buying power?

01:36:10.000 | If you don't borrow money on it, first of all, if you move, do you plan to keep this unit as a rental or do you plan to sell it?

01:36:18.000 | Keep it as a rental.

01:36:20.000 | Okay. If you keep this unit as a rental, do you have the money that you can pay the necessary expenses to buy the next place?

01:36:27.000 | Yes.

01:36:30.000 | At least at the condo level.

01:36:33.000 | The single-family homes are more.

01:36:37.000 | Do you have the money that would allow you to, do you have other money that's not all in these, that wouldn't be all in these two pieces of real estate?

01:36:46.000 | Do you have other savings, other investments?

01:36:49.000 | Retirement mainly.

01:36:50.000 | Right.

01:36:51.000 | And savings, yeah.

01:36:54.000 | It's hard. I think you borrow money where you can get the best terms, but I wouldn't just put a mortgage on the house that you're living in just because you can, unless you had some clear use of the money and you said, I want to have three doors instead of just two and so I'm going to use that to make down payments.

01:37:14.000 | But no, I would probably keep the first unit mortgage free and move into the second unit myself unless you can present some compelling alternative use of the money.

01:37:24.000 | Okay. Okay. Appreciate your input on both of those.

01:37:29.000 | My pleasure.

01:37:30.000 | Yeah, my pleasure. Thank you for calling in and congratulations on paying off your house. May you continue to experience success in all of those things.

01:37:38.000 | I do think that before any of us get involved with a homeowner's association, again, I don't want to be dogmatic.

01:37:45.000 | It may be unavoidable given where you live and what's available, but it's not hard to find a lot of horror stories associated with homeowner's associations.

01:37:56.000 | And while I actually now at my current age appreciate some of the things of a homeowner's association more than I did five or ten years ago, it's just very difficult to conceive of giving one more unit of – one more political unit control over your life.

01:38:17.000 | We have so many rules under which we live, so many things that can be so difficult that when you add one more layer onto it, it can be very difficult.

01:38:26.000 | And when you're dealing with that political unit at such a local level, you're very building, it can just lead to real problems.

01:38:38.000 | And so my commitment is to avoid them entirely while recognizing that that is not necessarily always feasible.

01:38:46.000 | Thank you all so much for listening to today's Q&A show. I hope you've enjoyed it.

01:38:50.000 | Quite the variety of shows – or quite the variety of questions.

01:38:55.000 | I hope that you'll call in next week. I'd love to have you do that.

01:38:57.000 | And you can call and talk about anything that you want, ask any question that you want, discuss any subject that you want.

01:39:02.000 | As you can see from the content of the calls, it's open. The door is open to talk about anything you want. I'll do my best with it.

01:39:07.000 | So if you'd like to join me next week, go to patreon.com/radicalpersonalfinance, patreon.com/radicalpersonalfinance,

01:39:14.000 | and sign up to support the show there. And I'd love to talk with you next week.

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2020-08-21_Friday_QA